What Is Geothermal?

What is Geothermal?

When properly developed and managed, geothermal systems are a clean, abundant, and reliable source of renewable energy, and by using geothermal for electricity generation or direct use we conserve the use of non-renewable and more polluting resources.

The capacity of installed geothermal electricity generation worldwide is equivalent to the combustion of nearly 30 million tonnes of coal or the output of about 10 nuclear plants.

Geothermal energy is effectively a renewable resource, which does not consume any fuel or produce significant emissions. Although some geothermal fields have been degraded, none have been exhausted and sustainable development is possible. Geothermal energy also has the advantage, over other renewables, that it is independent of climatic variation.

Geothermal energy is a relatively low-cost and indigenous generation option that can contribute to New Zealand’s growing demand for electricity. It is uniquely reliable, with geothermal power stations typically achieving load factors of 95%, compared to typical load factors of 30 – 50% for hydro and wind power stations. Wairakei Power Station has operated at a load factor of more than 90% for over 40 years with low operating costs. This inherent reliability makes geothermal generation a valuable component in a diverse electricity supply system such as New Zealand’s.

There are geothermal generation opportunities on either side of Auckland (i.e. Northland and the Taupo Volcanic Zone), the principal demand centre for electricity in the North Island. The proximity of geothermal resources to Auckland, assuming sufficient transmission capacity, provides an efficient, low-cost electricity supply option. Geothermal fields are also commonly found near major forests and their energy-intensive processing industries, allowing symbiotic development of each resource.

An important aspect of recent investment in geothermal projects is the development of partnerships between power generators and Māori trusts. Māori commonly have the land access rights to geothermal fields and geothermal projects are increasingly delivering economic benefits to local Iwi.

Geothermal Systems

The word geothermal comes from the Greek words geo (earth) and therme (heat), – ‘the heat of the earth’.

Geothermal energy is derived from the heat in the earth’s core and from radioactive decay within its mantle. At high temperatures and pressures within the mantle, mantle rocks melt forming magma, which rises towards the surface carrying the heat from below.

In some regions where the earth’s crust is thin or fractured, or where magma bodies are close to the surface, there are high temperature gradients. Deep faults, rock fractures and pores allow groundwater to percolate towards the heat source and become heated to high temperatures. Some of this hot geothermal water travels back to the surface through buoyancy effects to appear as hot springs, mud pools, geysers, or fumaroles.

If the rising hot water meets an extensively fractured or permeable rock zone, the heated water will fill pores and fractures and form a geothermal reservoir. These reservoirs are much hotter than surface hot springs, reaching more than 350°C, and are potentially an accessible source of energy.

High temperatures can be achieved in liquid-dominated reservoirs because increasing hydrostatic pressure with depth allows elevated temperatures without boiling. Many undisturbed geothermal reservoirs in New Zealand have temperature and pressure profiles where fluid is close to boiling point to depths of more than 1 km.

Geothermal areas are commonly close to the edges of continental plates. New Zealand’s location on an active plate boundary (between the Indo-Australian and Pacific Plates) has resulted in numerous geothermal systems and a world-class geothermal energy resource.

The characteristics of geothermal systems vary widely.

Electricity Generation

New Zealand has a long history in geothermal electricity generation and today geothermal energy produces almost 20% of New Zealand’s electricity supply. Most of New Zealand’s installed geothermal generating capacity, is situated in the Taupo Volcanic Zone, with about 25 MWe installed at Ngawha (link to section on Ngawha) in Northland.

Power companies in New Zealand generate roughly 7,500 GWh per year from 19 power plants located over 8 high-temperature fields. The temperature and conditions of a particular geothermal reservoir determine generation technology (hyperlink). Generation units span the spectrum of power technologies from a simple binary, to 2-phase binary, to condensing steam turbines (single, double and triple flash) and back-pressure turbines. Individual unit sizes range from 3.3 MWe (binary Kawerau) to 133 MWe (NAP, Rotowaka). Among the original equipment manufacturers, Ormat is the market leader with 300 MWe commissioned, followed by Fuji (285), Toshiba (160), British Thompson and Houston (128), Mitsubishi (42), and other (8).

Five entities operate geothermal power stations: Mercury Energy (489 MWe), Contact Energy (420), Top Energy (25 MW), Ngati Tuwharotoa Geothermal Ventures (20.5), Eastland Energy (9.5), and Nova (3.3). Three fields (Mokai, Ngatamariki, and Rotokawa) have operations that are co-owned with local iwi.

Geothermal power forms an increasingly key role in decarbonising the NZ Electricity Market and there are a number of potential new developments.

Decarbonising the NZ Electricity Market

In 2014, geothermal generation overtook natural gas as the second largest source of electricity (17%), after hydro (60%). Geothermal’s base load role also helps stabilise system dispatch during periods of weather variability (affecting hydro, solar and wind).

History of Electricity Generation

When the first generator was commissioned at Wairakei in 1958, it was only the second geothermal plant in the world to begin large-scale, commercial operation and the first to exploit a wet (rather than dry steam) geothermal resource. The impetus for the development of Wairakei came in 1947 from severe electricity shortages following two dry years which restricted hydro generation, and a desire by the New Zealand Government for the electricity supply to be independent of imported fuel. New Zealand has recently faced similar situations

There are currently six fields used for geothermal electricity generation, which is dominated by Contact Energy Ltd (a listed company) and Mercury (a state-owned enterprise). A significant factor in recent geothermal projects has been the high level of commercial participation by Maori-owned enterprises.

Historical Changes in NZ Geothermal Electricity Generation Capacity

Plant Name Current Owner Commissioning Date Installed Capacity (MWe) Cumulative Capacity (MWe)
Wairakei Contact Energy 1958-63 193 193
Kawerau NST & NTGAL 1966 8 201
Wairakei Contact Energy 1982 -36 165
Kawerau Binary (TG1) Nova Energy & NTGAL 1989 2 167
Ohaaki Contact Energy 1989 114 281
Kawerau Binary (TG2) Nova Energy & NTGAL 1993 4 285
Ohaaki Rerating Contact Energy 1996 -10 275
Wairakei BP Contact Energy 1996 5 280
Poihipi Road Contact Energy 1996 50 330
Rotokawa Mercury 1997 29 359
Ngawha Top Energy 1998 10 369
Mokai 1 TPC 1999 55 424
Ohaaki Derating Contact Energy 2001 -38 386
Rotokawa Extension Mercury 2003 6 392
Kawerau BP Decom NST & NTGAL 2004 -8 384
Kawerau BP2 NST & NTGAL 2004 8 392
Wairakei Binary Contact Energy 2005 14 406
Mokai 2 TPC 2005 39 445
Ohaaki Derating Contact Energy 2005 -16 429
Mokai 3 TPC 2007 18 447
Ohaaki Rerating Contact Energy 2007 7 454
Kawerau (KGL) Mercury 2008 100 554
KA24 Eastland Group 2008 8 563
Ngawha 2 Top Energy 2008 15 578
Nga Awa Purua Mercury & TNT2 2010 140 718
Tauhara Te Huka Contact Energy 2010 24 742
TOPP1 NTGAL 2013 21 763
Ngatamariki Mercury 2013 82 845
Te Mihi Contact Energy 2014 166 1011
Wairakei Reduction Contact Energy 2014 -30 981
TG1 Retirement Nova Energy 2014 -2 978
Kawerau (KGL) Rerating Mercury 2017 7 985

NTGAL – Ngati Tuwharetoa Geothermal Assets Limited
NST – Norske Skog Tasman
TPC – Tuaropaki Power Company
TN2T – Tauhara North No. 2 Trust

Potential New Developments

The information on this page is now out of date. The NZGA will be updating this page with the latest potential for geothermal development estimate.

There are a number of potential developments, with two new generation projects currently (2018) under construction. TAOM (Eastland Energy and A8D Trust) is a 26 MWe Ormat, 2-phase binary plant currently commissioning. Ngawha C (Top Energy) is a 27 MWe Ormat 2-phase binary plant due to commission in 2020.

With the price of carbon forecast to increase under a strengthened Emission Trading Scheme, as well as a new Zero Carbon Bill, new geothermal developments will be required to support the phase out of thermal generation and transition to electric powered transportation.

Potential Upcoming Geothermal Developments

Station Capacity (MW) Operation Developer Comments
Te Ahi O Maui (Kawerau) 20 2018 Eastland Group and Kawerau A8D Ahuwhenua Trust Four wells drilled, construction on schedule.
Ngawha 3 25 2020 Top Energy Design stage, well drilling commenced 2018.
Tauhara II 240 >2020 Contact Consents in place through Board of Inquiry. Production drilling to follow; possibly 2020.
Tikitere <45 >2020 Tikitere Geothermal Power Limited and Ngati Rangiteaorere Both currently in consenting and investigation stage.
Rotoma 35 >2020 Rotoma No 1 Inc Consents under appeal.
Taheke ? ? Contact & Taheke 8C and the Adjoining Blocks Inc Three exploration wells drilled.
Te ai o Tutea (Taheke) ? ? MRP, Okere Inc and Ruahine Kuharua Inc Agreement for expansion and cooperative development
Misc 400 By 2025 Various Balance of unspecified projects including further stages of existing developments

Geothermal Uses & Values

New Zealand’s geothermal resources have been used for many years. Geothermal areas are important to Māori, who use the heated waters for cooking, washing, bathing, warmth, preserving, ceremonial use and healing. Māori also use geothermal minerals as paints, wood preservatives and dyes. In recent years, Māori have become significant players in the geothermal space with several of the major operators owned by iwi. Through many Treaty of Waitangi settlements, many iwi have had land returned to them and their traditional relationships with the geothermal resource formally recognised by the Crown.

Geothermal fields also have significant landscape, ecological, amenity, scientific and conservation value.

Other key uses include tourism, mineral extraction, direct heat use and electricity generation.

For more information on uses of geothermal energy, including New Zealand case studies – visit GNS Science’s Earth Energy webpages.

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