Distributed Small-Scale Wind in New Zealand:

Advantages, Barriers and Policy Support Instruments

Martin Barry

17th July, 2007

OverviewDefinition

Aim & Method

Key Issues Facing the Industry

SSW Internationally & New Zealand– Advantages

Key Findings

Definition

Distributed Small-Scale Wind (SSW):

A wind project with 3 or less utility-scale turbines connected to the local lines network

Typical project size between 0.5 – 5 MW

Aim

To establish whether distributed, SSW in NZ is worthy of public policy support and if so, determine the most effective policy instruments to promote its uptake.

Method

• International review: Journal articles, international wind energy associations, govt. publications, Wind Power Monthly magazine, GWEC

• New Zealand– Interviews with 22 energy industry stakeholders– Rural mail survey

 Masterton New Plymouth Both Regions

No. residences 861 759 1620

No. responses 230 108 338

Response rate (%) 26.7% 14.2% 20.9%

Method

Rural Survey Questions

1. Do you support/oppose wind power as a means of generating electricity in New Zealand?

1 2 3 4 5Strongly support Support Indifferent Oppose Strongly

oppose

Method

2. Please imagine a new small-scale (2 turbine) wind farm placed in your district.

How would you view the impact of such a wind farm?

1 2 3 4 5Very positive Positive Neutral Fairly negative Negative

Rural Survey Questions

Method

3. Please imagine a new small-scale (14 turbine) wind farm placed in your district.

How would you view the impact of such a wind farm?

1 2 3 4 5Very positive Positive Neutral Fairly negative Negative

Rural Survey Questions

Method

4. Is the idea of installing a wind turbine on your land appealing to you?

1 2 3 4 5Very interested Possibly interested Not sure Prob not interested Definitely

not interested

Rural Survey Questions

Method

5. Is the idea of installing a wind turbine on your land appealing to you?

If government support was offered (to ensure the ROI is comparable with other investments.

1 2 3 4 5Very interested Possibly interested Not sure Prob not interested Definitely

not interested

Rural Survey Questions

A survey of this type has not yet been done in New Zealand

Key Issues

NZ wind industry is failing to capitalise on the world- class wind resource it has available

Growth Rate

• Behind OECD average

0

500

1000

1500

2000

2500

3000

3500

1999 2000 2001 2002 2003 2004 2005 2006

NZ

Ireland

Norw ay

Denmark

Scotland

MW

• Intermittent

0

20

40

60

80

100

120

1401

99

3

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

Nu

mb

er o

f tu

rbin

es

Growth Rate

Key Issues

Trend toward large-scale (local opposition)

Limited flow of investment

Limited manufacturing capacity High geographic concentration

NZ wind industry has adopted 4 characteristics that are limiting its future potential growth:

There is arguably a need to reassess the way the industry is developing

Key Issues

Trend toward large-scale (local opposition)

Limited flow of investment

Limited manufacturing capacity High geographic concentration

NZ wind industry has adopted 4 characteristics that are limiting its future potential growth:

There is arguably a need to reassess the way the industry is developing

Trend toward large-scale

NZ wind developers favour the ‘big is better’ approach

• 98% of installed capacity comes from farms with 15 or more turbines

Leading to increased local opposition & lengthening consent processes

– E.g. Project West Wind delayed more than 15 months

– Also Project Hayes, Awhitu, Tararua 3, Te Waka Ranges

Social acceptance is a key limiting factor of wind’s potential growth, e.g. UK

• 98% of total generating capacity being owned by only three developers

– Meridian & Trustpower also investing in Australia

c.f.– Ireland: More than 40 investors– Denmark: More than 150,000 households

Limited flow of investment

Advantages of SSW

Increased local public acceptance

Facilitates community ownership

Supports local manufacturing

Potential for distributed generation benefits

Utilises small high-wind sites

Advantages of SSW1. Increased local public acceptance

- 80% positive about SSW in local area

0

5

10

15

20

25

30

35

40

45

50

Very positive Positive Neutral Fairly negative Very negative

Attitudes/Views

Per

cen

tag

e R

esp

on

ses

Large

Small

Wind Farm Size

- 50% positive about a large wind farm (14+ turbines)

Advantages of SSW1. Increased local public acceptance

Significantly reduced NIMBY effect

Method

Rural Survey Questions

1. Do you support/oppose wind power as a means of generating electricity in New Zealand?

1 2 3 4 5Strongly support Support Indifferent Oppose Strongly

oppose

Advantages of SSW1. Increased local public acceptance

Significantly reduced NIMBY effect

Attitude toward large wind farm in local area

23%

Attitude toward small wind farm in local area

Positive

Negative

Attitude

3.3%

Attitude toward

large-scale wind farmAttitude toward SSW

n = 302

23% 3.3%

Advantages of SSW

1. Increased local public acceptance

‘Big is better’ is possibly creating an anti-wind sentiment

A spread of turbine clusters throughout NZ will give people a chance to familiarise themselves with wind on a scale that they find more acceptable and less intrusive

2. Facilitates community ownership

Widespread throughout Germany, Denmark, the Netherlands & Sweden

Advantages of SSW

0

1000

2000

3000

4000

5000

6000

7000

Nu

mb

er

of T

urb

ine

s

Privately Owned

Power Company Owned

Advantages of SSW

2. Facilitates community ownership

Proven to increase local public acceptance:

•Greater tolerance of effects

•Removes hostility toward large, commercial developers

•Alleviates tensions between local and national interest

A new source of capital:

•Greater investment pool

•Increases competition in generation

•Increases geographic diversity of wind capacity

NZ Context

Advantages of SSW

2. Facilitates community ownership

Involves farmers in wind:

•Utilise NZ’s vast rural potential for electricity generation

•Opportunity for farming sector to partially offset emissions

•Reduce the need for intensifying land use

Has demonstration value for the public:

•Improve understanding of the link between energy and climate

•Increase awareness of energy conservation

NZ Context

0

10

20

30

40

50

60

VeryPositive

Positive Neutral Oppose StronglyOpposeAttitude/View

Per

cen

tag

e R

esp

on

ses

Level of interest

Level of interestw ith governmentsupport

Advantages of SSW

66% interested in owning a turbine on their land

74.7% interested if government support is offered

Survey found that rural landowners have a high degree of interestNZ Context

Not Covered Today

Disadvantages

Barriers

Policy Instruments

Key Findings

Source: (BMU, 2006) Source: (BMU, 2006)

• SSW has the potential to alleviate issues in the wind industry & the wider energy sector

• Developing SSW would likely provide faster industry growth

Faster consent processes

More investors

Greater number of suitable sites (cf. large wind farms)

Key Findings

Source: (BMU, 2006) Source: (BMU, 2006)

• People are significantly more positive about SSW being developed in their local area

• The NIMBY effect is significantly reduced with SSW

SSW should not be developed instead of large-scale wind farms, but rather alongside them

• Rural landowners in NZ are interested in community ownership

Thank you

Thesis can be downloaded from http://hdl.handle.net/10063/87