What Are Some Advantages of Geothermal Energy?

Electricity prices in New Zealand have soared in recent years, and this was attributed to two things: forward marketing in the electricity market and lack of reserves in renewable sources which the country outsources 80% of its electricity supply from. 

As the demand for electricity in NZ grows, the potential of geothermal projects to support the power industry also heightens. 20% of New Zealand’s electricity supply comes from geothermal energy because it’s a highly reliable and renewable source - it doesn’t require fuel or produce harmful emissions. 

If geothermal energy is used to address the growing electricity demand, what advantages can we expect? Let’s take a look at five major advantages of using geothermal energy in NZ.

Geothermal energy

Before learning about the advantages, here’s a refresher on geothermal energy - what it is and how it’s used in New Zealand.

Geothermal energy is heat extracted from the Earth’s core. NZ is placed in a favorable position to harvest geothermal energy since it comes mainly from tectonic continental plate boundaries, and the country happens to sit in two major plates; namely, the Indo-Australian and Pacific Plates. 

How is geothermal energy used in NZ?

Most of NZ’s geothermal energy is situated in Taupo and Kawerau regions which are found within the Taupo Volcanic Zone. Around 7,500 GWh per year is generated from geothermal energy by 19 power companies in NZ which includes Mercury Energy, Contact Energy, and Nova, among others. Aside from electricity supply, geothermal energy in NZ is also used for horticulture, timber drying, milk drying, aquaculture, and other applications which are usually industrial and agricultural in nature.

What are some of the major advantages of geothermal energy?

• Partnerships between Maoris and power generators: Maoris have land access rights to areas abundant in geothermal energy, and the development of partnerships with power generators drive investments and economic benefits. It’s a sustainable indigenous generation option to address the growing demand for electricity in NZ.

• Low-cost electricity supply: Using geothermal energy cuts down generation costs because its capacity is equivalent to outputs from nuclear and coal plants. On a global scale, geothermal energy production is similar to the output of 30 million tonnes of coal or 10 nuclear plants. 

If you’re living in Auckland, using geothermal energy for electricity can help cut down the bills because geothermal fields are in close proximity to Auckland. This proximity reduces the transmission costs and increases efficiency. 

• Direct geothermal heat: Geothermal energy can be used without a heat pump or power plant. In NZ, it’s used mainly for industrial applications such as paper mills that are found in Kawerau. It’s also used for commercial purposes and moderately used for residential and agricultural purposes.

• Mineral extraction: Some of the minerals found in geothermal systems are industrially and technologically valuable. Weathered volcanic rocks with high concentration of valuable industrial mineral and geothermal fluids with minerals that are used for batteries and semiconductors can be extracted from geothermal systems. 

• Tourism: Geothermal fluid has natural healing abilities that can attract tourists to visit New Zealand especially in Ngawha Springs and other similar spots. It’s also an opportunity to learn about Maori culture and the indigenous significance of geothermal energy.This empowers self-determined development and leadership in Maori communities and benefits the local and national economy.

What power companies use geothermal energy?

Mercury Energy, Contact Energy, Nova, and other power companies use geothermal energy; NZ’s cheapest sources of electricity. There are different ways to extract geothermal energy, such as binary cycle, dry steam, and flash steam, depending on the reservoir. In 2018, power companies have generated 350MW of geothermal energy from the reservoirs. 

The main purpose of geothermal energy in NZ, above all others, is to generate electricity for residential and commercial purposes. It’s sustainable and effective, holding great potential to meet our growing demand for electricity. How do power companies that utilize geothermal energy  for electricity such as Mercury and Contact Energy compare with one another? Find out by using our comparison tool.