Cheap High-Density Energy is the Key to Prosperity
It’s Election 2026 policy silly season. No surprise that some party policies on New Zealand’s energy future are detached from reality, particularly those of the Green Party and Labour. At least NZ First’s bold oil and gas exploration policy is sound in principle.
This article revisits what makes a realistic electricity system, adding to recent commentary by Bryan Leyland [1] and earlier by Raine and Leyland [2]. A later article will look at whether we should be rushing to electrify our transport system.
Low-cost, high-density energy is the key to building a prosperous industrialised society. The industrial revolution dramatically multiplied up the work rate of a single human or horse, and inventions such as the separate-condenser coal-burning James Watt steam engine of 1776 were transformational.
Fuels such as coal, gas and oil have driven much of the massive technological development and prosperity in our society since the 19th century and still make up over 80% of the world’s energy consumption. As fossil fuels are replaced only on geological timescales, scarcity over time will dictate changes in our energy system.
The future will see widespread nuclear power for electricity generation, and fossil fuels reserved for heavy transport, ocean-going ships, and aircraft. However, the necessary technological changes to the energy system must be implemented at a rate that still allows economic growth and environmental goals to be met – a complex challenge. The focus here is on the electricity system.
The past 15 years have seen a big drop in cost for solar PV systems (~90%), and for onshore wind turbines (~70%), but their EROI is still generally poor, and they commonly do not meet the whole-life-cycle minimum economically viable EROI of ~8. They are in the end very costly options.
Limit Solar and Wind Power
New Zealand will no doubt add more solar and wind power, but this should remain a minority proportion of the system capacity because, further to EROI arguments above:
The most promising new-horizon technology for large mass storage are sodium-ion batteries, but these have lower energy density than lithium-ion batteries, which themselves have an energy density of less than 2% of petrol and diesel, or the natural gas used for fast-start OCGT back-up generation. The limited life of storage batteries (10 - 15 years), and the massive land area needed for battery farms delivering only several hours of back-up, makes these impractical economically and their environmental impact is dreadful.
The grid cannot run with a high percentage of wind and solar generation capacity without ~40% back-up from coal- or gas-fired plant, assuming hydro and geothermal are at capacity. The higher the proportion of wind and solar power, and without fast-start back-up such as OCGT systems, the greater is the risk of grid instability and power outages such as occurred in Spain in April 2025.
The key take-away from all of this is that the EROI for hydro, geothermal and nuclear plant is 6 to 10 times higher than for solar PV and wind power, which are also not helped by their short operating life of 15 - 25 years. In reality, solar and wind are non-renewable energy systems, and in material resource and thermodynamic terms, no electricity generation system is renewable. The only renewable part is energy input from the wind, sun, geothermal bore, or hydro lake.
Economically Damaging Energy Policy
Western world governments and electricity industries have failed to recognise that solar and wind energy systems are not in fact renewable. They have been fixated on carbon dioxide (CO2) emissions reductions and continue to pursue low-EROI wind and solar for new generation capacity at the expense of coal, gas or nuclear systems. This has only led to extremely high electricity prices [1], consumer hardship, and economically disastrous de-industrialisation. Australia, Germany and the U.K. are clear examples.
Close to home, it is bizarre that Australia is still going flat-out on wind and solar, decommissioning coal-fired plant, and de-industrialising, while exporting coal to China (2.93 million tonnes in June 2026), which is then used for electricity generation and the manufacture of electric vehicles that are exported back to Australia. This is just green politics hypocrisy from the Albanese government. There are many available international perspectives online on the need for more realistic energy and climate change policies – e.g. see the Scott Tinker interview in Reference 5.
The demonisation of carbon dioxide, and the exaggeration of the role of anthropogenic CO2 in global warming have been discussed previously [2, 6] in relation to climate and energy policy. At home, the madness of continuing with the damaging cost to New Zealand industry of the Emissions Trading Scheme (ETS) is well summarised by Pee Kay [7]. Government is understandably concerned about international trade sanctions if we are not obedient. However, other developed countries are now stepping back from emissions reduction commitments as they take on board that, while there has been some anthropogenic warming, we are not facing a climate crisis. New Zealand does not want to be left in a virtual-signalling economic wilderness.
Election 2026 Policies and Where to from Here?
Given all of the foregoing, the NZ Green Party still has its head in the sand on “renewable” energy, particularly with their call for mass subsidised domestic rooftop solar and battery systems. The Labour Party also supports large-scale domestic rooftop solar power and battery systems.
National wants to end Labour’s oil and gas exploration ban (as do ACT and NZ First) and ensure we have strategic fuel supply reserves. And we can give a technical thumbs-up for the NZ First $1Bn oil and gas exploration policy. But National also wants to electrify the country with a doubling of “renewable” energy. ACT supports permitting offshore wind power (very expensive) but will not subsidise solar power and has a generally realistic position on energy.
The failure of Labour, the Greens, and even National, to understand the practical limitations and real economics of solar power is shown by their policies around subsidised domestic rooftop solar PV and battery systems.
Leyland [1] points out that electricity from these costs about three times that from large-scale solar farms, so subsidies for rooftop solar systems mask their true cost. Sure, these systems add some resilience for domestic users, but their life is short and the economics are poor. And boosting domestic rooftop solar, for those who can afford it, does not ensure that the main electricity grid is resilient and able to keep industry alive during a prolonged windless and sunless period.
New Zealand is, for now, well placed with ~65% combined hydro and geothermal generation, and an average EROI of more than 20, perhaps above 30. To protect this, over the next 30 years (incentivised by a different market model? [1]) we should, as previously noted [2], build only limited new solar and wind generation capacity, and add:
New Zealand is a small country with a vulnerable trading economy. Unless we focus relentlessly on lifting our industrial productivity we will continue to drift downwards. Policy realism demands low-cost, high-density energy resilience in electricity generation, which makes the policies of Labour and the Greens costly fantasy. We must reject slavish virtue-signalling policies on energy and climate change that will continue to damage the economy and do nothing to reduce global warming.
********************************************
John Raine is an Emeritus Professor of Mechanical Engineering and a former researcher in alternative and renewable energy systems. He formerly worked in the UK engine and vehicle test plant industry.
References
Energy Return on Energy Invested
Critical factors for a robust electricity grid are:
- An abundant high-density energy supply, resilient to geopolitical events.
- An energy conversion system that delivers electricity continuously at a favourable whole lifecycle cost with a high Energy Return on Investment (EROI) [3]. EROI is the ratio of the lifetime energy delivered by the generation plant to the energy used to extract and process the materials to build the plant, operate it, decommission it at the end of its life, and process waste materials.
Nuclear power plant 40 - 75
Hydro-electric plant 30 - 80
Geothermal steam turbine plant 15 - 40
Coal-fired steam turbine plant 10 - 30
Combined cycle gas-fired steam turbine plant (CCGT) 15 - 30
(Reduces to ~ 3.5 for Biogas-fired CCGT)
Open cycle gas turbine plant OCGT (for peak grid loads) 5 - 15
Wind turbine farms: 5 - 15
Solar photovoltaic (PV) farms: 3 - 10
The rigorous but dated analysis of Weissbach et al. [3] gives still-valid EROI upper range figures for hydro, coal and nuclear power. Lower end EROI values reflect the inclusion of necessary capacity back-up, e.g. for solar and wind. EROI values should allow for raw materials costs and environmental remediation, but do not measure negative societal or environmental impacts from huge areas of land being used for solar and wind farms.The past 15 years have seen a big drop in cost for solar PV systems (~90%), and for onshore wind turbines (~70%), but their EROI is still generally poor, and they commonly do not meet the whole-life-cycle minimum economically viable EROI of ~8. They are in the end very costly options.
Limit Solar and Wind Power
New Zealand will no doubt add more solar and wind power, but this should remain a minority proportion of the system capacity because, further to EROI arguments above:
- To avoid brownouts or blackouts, continuous power input to the grid is not-negotiable, but windless days and nights combine with sunless hours to ensure that wind and solar power always fail on continuity of input. This cannot be economically countered by building over-capacity.
- There is effectively no storage to bridge low or zero solar/wind periods because mass battery storage is simply not economic, and nor is pumped hydro, as discussed previously [4].
The most promising new-horizon technology for large mass storage are sodium-ion batteries, but these have lower energy density than lithium-ion batteries, which themselves have an energy density of less than 2% of petrol and diesel, or the natural gas used for fast-start OCGT back-up generation. The limited life of storage batteries (10 - 15 years), and the massive land area needed for battery farms delivering only several hours of back-up, makes these impractical economically and their environmental impact is dreadful.
The grid cannot run with a high percentage of wind and solar generation capacity without ~40% back-up from coal- or gas-fired plant, assuming hydro and geothermal are at capacity. The higher the proportion of wind and solar power, and without fast-start back-up such as OCGT systems, the greater is the risk of grid instability and power outages such as occurred in Spain in April 2025.
The key take-away from all of this is that the EROI for hydro, geothermal and nuclear plant is 6 to 10 times higher than for solar PV and wind power, which are also not helped by their short operating life of 15 - 25 years. In reality, solar and wind are non-renewable energy systems, and in material resource and thermodynamic terms, no electricity generation system is renewable. The only renewable part is energy input from the wind, sun, geothermal bore, or hydro lake.
Economically Damaging Energy Policy
Western world governments and electricity industries have failed to recognise that solar and wind energy systems are not in fact renewable. They have been fixated on carbon dioxide (CO2) emissions reductions and continue to pursue low-EROI wind and solar for new generation capacity at the expense of coal, gas or nuclear systems. This has only led to extremely high electricity prices [1], consumer hardship, and economically disastrous de-industrialisation. Australia, Germany and the U.K. are clear examples.
Close to home, it is bizarre that Australia is still going flat-out on wind and solar, decommissioning coal-fired plant, and de-industrialising, while exporting coal to China (2.93 million tonnes in June 2026), which is then used for electricity generation and the manufacture of electric vehicles that are exported back to Australia. This is just green politics hypocrisy from the Albanese government. There are many available international perspectives online on the need for more realistic energy and climate change policies – e.g. see the Scott Tinker interview in Reference 5.
The demonisation of carbon dioxide, and the exaggeration of the role of anthropogenic CO2 in global warming have been discussed previously [2, 6] in relation to climate and energy policy. At home, the madness of continuing with the damaging cost to New Zealand industry of the Emissions Trading Scheme (ETS) is well summarised by Pee Kay [7]. Government is understandably concerned about international trade sanctions if we are not obedient. However, other developed countries are now stepping back from emissions reduction commitments as they take on board that, while there has been some anthropogenic warming, we are not facing a climate crisis. New Zealand does not want to be left in a virtual-signalling economic wilderness.
Election 2026 Policies and Where to from Here?
Given all of the foregoing, the NZ Green Party still has its head in the sand on “renewable” energy, particularly with their call for mass subsidised domestic rooftop solar and battery systems. The Labour Party also supports large-scale domestic rooftop solar power and battery systems.
National wants to end Labour’s oil and gas exploration ban (as do ACT and NZ First) and ensure we have strategic fuel supply reserves. And we can give a technical thumbs-up for the NZ First $1Bn oil and gas exploration policy. But National also wants to electrify the country with a doubling of “renewable” energy. ACT supports permitting offshore wind power (very expensive) but will not subsidise solar power and has a generally realistic position on energy.
The failure of Labour, the Greens, and even National, to understand the practical limitations and real economics of solar power is shown by their policies around subsidised domestic rooftop solar PV and battery systems.
Leyland [1] points out that electricity from these costs about three times that from large-scale solar farms, so subsidies for rooftop solar systems mask their true cost. Sure, these systems add some resilience for domestic users, but their life is short and the economics are poor. And boosting domestic rooftop solar, for those who can afford it, does not ensure that the main electricity grid is resilient and able to keep industry alive during a prolonged windless and sunless period.
New Zealand is, for now, well placed with ~65% combined hydro and geothermal generation, and an average EROI of more than 20, perhaps above 30. To protect this, over the next 30 years (incentivised by a different market model? [1]) we should, as previously noted [2], build only limited new solar and wind generation capacity, and add:
- More hydroelectricity plant and raise hydro lake levels where feasible.
- More geothermal plant.
- Nuclear power plant (medium-long term), noting its very high EROI, and that nuclear fission fuel has an energy density 1.8 million times higher than petrol, diesel or natural gas. Modern nuclear power is safe, and the public must not confuse this energy option with nuclear weapons.
New Zealand is a small country with a vulnerable trading economy. Unless we focus relentlessly on lifting our industrial productivity we will continue to drift downwards. Policy realism demands low-cost, high-density energy resilience in electricity generation, which makes the policies of Labour and the Greens costly fantasy. We must reject slavish virtue-signalling policies on energy and climate change that will continue to damage the economy and do nothing to reduce global warming.
********************************************
John Raine is an Emeritus Professor of Mechanical Engineering and a former researcher in alternative and renewable energy systems. He formerly worked in the UK engine and vehicle test plant industry.
References
1. Bryan Leyland, “A Solution to our Electricity Problems”, Brash and Mitchell, 16th July 2026. https://www.brashandmitchell.com/post/bryan-leyland-a-solution-to-our-electricity-problems
2. John Raine and Bryan Leyland, “A Realistic Energy Future”, Bassett Brash and Hide, 24th August 2025 https://www.bassettbrashandhide.com/post/john-raine-and-bryan-leyland-a-realistic-energy-future
3. D. Weissbach, G. Ruprecht, A. Huke, K. Czerski, S. Gottlieb, A. Hussein, “Energy intensities, EROIs (energy returned on invested), and energy payback times of electricity generating power plants” Science Direct, Energy, Volume 52, 1st April 2013, Pages 210-221.
4. Bryan Leyland and John Raine, “The Energy Storage Elephant”, Breaking Views NZ, 11th April 2026. https://breakingviewsnz.blogspot.com/2026/04/bryan-leyland-john-raine-energy-storage.html
5. Konstantin Kisin – Scott Tinker Interview, “ Climate Change – What the Data Actually Shows”. Triggernometry, YouTube 29th July 2026. https://www.youtube.com/watch?v=p7gyAkrLg64
6. John Raine, “Canary in a Climate World – When Political and Media Narratives Depart from Scientific Evidence” Brash and Mitchell, 23rd June 2026 https://www.brashandmitchell.com/post/john-raine-canary-in-a-climate-world-when-political-and-media-narratives-depart-from-scientific-ev
7. Pee Kay, “Killing Prosperity with Good Intentions” No Minister, 3rd August 2026. https://nominister.wordpress.com/2026/08/03/killing-prosperity-with-good-intentions/
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