Our energy use has a range of impacts, from the financial to the environmental.
We, and the country as a whole, can reduce these impacts by using less energy in our homes and changing the energy sources that supply them. This could ultimately free us from having to rely on non-renewable resources for energy production, and give households more control over their energy costs.
Financial impact
On average, Auckland households spend $2,000 a year on electricity1, and that energy is costing us more and more. Since 2000, inflation-adjusted electricity prices have risen by 3% per annum2. And it’s not only the cost of energy that is rising. Over the next 25 years, Auckland’s energy demand is projected to increase by 65% as the population increases by an extra million people. There is a risk that future increases in household energy consumption and volatile energy prices will see more Aucklanders experiencing fuel poverty (being unable to keep adequately warm in winter) and finding it difficult to afford a quality lifestyle. 3
The most energy-demanding systems in a home are heating (34% of annual energy use) and hot water (29%).4 Improvements and efficiencies achieved in these two areas can result in great savings on your annual energy consumption and associated cost – but must not come at the expense of poor health outcomes.
Environmental impact
The scope of the impact of our energy use transcends the boundaries of our homes. Our efforts to reduce energy demand, especially during peak times, will also reduce pressure on the infrastructure that supplies our energy and the need to expand it.
New Zealand’s energy supply is primarily generated using hydroelectricity, and increasing demand for energy could lead to the need for more hydroelectric dams. While the electricity generated by hydro is renewable, building new dams can have significant environmental impacts. Animal and plant species can be displaced from their habitats and ecosystems, native forests flooded and destroyed, and rivers and streams affected, increasing erosion and lowering riverbeds.
While most of the energy in New Zealand comes from renewable sources, 25% is generated by non-renewable resources such as coal and gas5, which results in CO2 emissions. Reducing our dependency on these resources can lower those emissions and help decrease the rate at which climate change is happening.
Becoming more energy independent
There are opportunities to become less dependent on the national electricity grid by generating your own energy at home, which can help keep your energy costs stable as power prices rise. Self-generation technologies are becoming both more affordable and available, and as a result self-generation of energy has increased in New Zealand in the past few years.
In other developed countries like the United Kingdom, self-generation now accounts for a significant percentage of the residential electricity supply, with an estimated half a million domestic installations. In Germany, there are 1.4 million such systems installed and during the summer they provide half of the country’s residential demand.
There are many forms of energy self-generation, however the most widely adopted one in New Zealand has been photovoltaic (PV) solar panels, usually referred to solar energy.
While self-generation using technology like PV panels can make a household more independent, it can also be used across multiple buildings. Local community schemes and co-generation are becoming increasingly popular in other cities where it is impractical or impossible to generate energy independently. These schemes have the potential to empower communities and strengthen bonds among people who are striving towards a common goal.
1This amount is based on annual use of 7,970 kWh at 25.5c per kWh (2010 rate). Sources: BRANZ, Energy Use in New Zealand Households, p. 18; and Ministry of Economic Development, New Zealand Energy Data File: 2010 Calendar Year Edition, pp. 130–131.
2Based on calculations from data in Ministry of Economic Development, New Zealand Energy Data File: 2010.
3Auckland Council, Low Carbon Auckland, p. 34.
4BRANZ, Energy Use in New Zealand Households, p. ii.
5Ministry of Business, Innovation & Employment, Energy in New Zealand, p. 56.