New Zealand cranks fossil power output as hydro squeeze drags on

illuminem summarizes for you the essential news of the day. Read the full piece on Reuters or enjoy below:

🗞️ Driving the news: New Zealand has increased its use of fossil fuels for power generation to the highest levels in three years, following a significant decline in hydroelectric power output due to ongoing drought conditions
• From January to July 2024, fossil fuel-fired electricity generation reached 4.36 terawatt hours (TWh), a 67% increase from the same period in 2023
• Hydro's contribution to the electricity supply dropped to 48.6% in July, the lowest in a decade

🔭 The context: Hydropower is traditionally New Zealand’s main source of electricity, accounting for around 58% of its annual generation
• However, a sustained drought, exacerbated by an El Nino weather pattern, has reduced hydroelectric output, prompting reliance on fossil fuels
• The surge in fossil fuel use has caused wholesale power prices to hit record highs, with New Zealand's electricity costs now more than double those of neighboring Australia

🌍 Why it matters for the planet: The increased use of fossil fuels contradicts New Zealand’s goals to reduce carbon emissions and transition to renewable energy sources
• This reliance on fossil fuels, driven by climate-induced drought, highlights the vulnerability of hydro-dependent nations to climate variability and emphasizes the need for diverse and resilient renewable energy strategies

⏭️ What's next: New Zealand's government has reversed a ban on offshore oil and gas exploration and is expediting approvals for LNG imports to address the power shortfall
• There is a 60%-70% chance of a La Nina weather pattern forming later this year, which could bring increased rainfall and potentially restore hydroelectric generation
• Additionally, New Zealand is expanding its solar energy capacity, which grew by over 50% year-on-year as of July 2024

💬 One quote: “Tight power supplies have also triggered a surge in wholesale power prices, which scaled all-time highs earlier this month,” noted Reuters columnist Gavin Maguire

📈 One stat: Fossil fuel-fired electricity generation in New Zealand from January to July 2024 was 4.36 TWh, a 67% increase compared to the same period in 2023

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