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BMI View: New Zealand's non-hydroelectric renewables market remains far behind its potential. Lacking
demand pressures and a central government feed-in-tariff system, capacity additions are highly limited with
growth of 0.1% expected for 2016 and 2017. While new impetus may come from the planned retirement of
fossil fuel plants, its postponement until 2022 in combination with the absence of meaningful electricity
demand growth has put new projects on the backburner.
Latest Updates And Structural Trends
? For 2016 and 2017, we expect the non-hydro renewable capacity market to stagnate at growth levels of
about 0.1%. In our 10-year forecast until 2025, non-hydro capacity is expected to only grow by an
average of 2.3% and non-hydro generation by a similar 2.6%.
? In July 2016, New Zealand's Electricity Authority ruled that the residential 'solar tax' (an additional fee
for connecting solar installations to the grid) was lawful, with potentially negative implications for the
pace and scope of future residential solar installations.
? In April 2016, New Zealand's largest electricity company Genesis announced the extension of operation
at the Huntly power plant until 2022 to prevent a potential undersupply. The plant was previously
planned to retire by end-2018, with the arising costs of continued operation being borne jointly by
Genesis and other electricity generators. The decision is the result of only sluggish growth in renewable
projects and might undermine hoped-for incentives for the non-hydro renewable market to pick up pace.