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.
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
Hydrogen: 1 - 5
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.
We hear optimistic stories about green hydrogen for
transport or electricity generation. At the bottom of the ranking above,
hydrogen has a very low EROI for both electricity generation and road transport
- typically below 1 for many pathways, and rarely above 3 - 5
even in best‑case scenarios. This means hydrogen returns less
energy than it takes to produce, once you include the full chain
(electrolysis → compression/liquefaction → transport → storage → conversion
back to electricity or motion).
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.
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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. This article is an updated and edited version of a post on John Raine’s Substack: https://johnraine31350.substack.com/p/the-electricity-system-energy-realism
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/
8 comments:
What a terrible dilemma we voters face in this upcoming election. Our economy is influenced by political fools who should be ashamed of themselves for pursuing this ideological nonsense. Let’s close down parliament by firing the entire rabble and replace them with visionaries that are capable of deploying logic.
Can anyone name the only MP with a degree in Electrical Engineering ?
Who talks slowly, carefully, rationally, and knows the science behind energy, that it is neither created or destroyed, but is captured and released ?
David Seymour - heading up ACT.
Who are the fwits running the the Opportunities Party and gaining in the polls to rival ACT?
It shows you how the media influences the voters.
I despair.
How refreshing to see some genuinely expert commentary on a technical subject. I knew nuclear was efficient but not that efficient. I blame the Labour Party obsession with nuclear free policies for public ignorance of this matter. Who would have thought that the way we heat water to run the generators would cause so much distress. But as usual, populist politics trump rational decision-making every time, and the country is the loser.
I think Rob Beechey has a damn’ good idea here. We will never get the legislators we need under the present ridiculous system.
Indeed, Earth’s atmosphere is becoming steadily warmer and our oceans rising, but it is critically important to understand the distinct contributions from human activity and natural causes. We must consider what we can do about ongoing change without damaging economies unnecessarily.
Newsroom articles from excellent people such as Dr Kevin Trenberth fully deserve exposure in the mainstream media, but even established climate change scientists disagree on various technical points; for example, the causes of the “Maunder Minimum”.
Our media should embrace a wider diversity of opinion on climate than at present, and the recent works of William Happer, Richard Lindzen, David Coe et al., Dieter Schildknecht and others deserve to be taken further and either verified or falsified.
For the moment, the mainstream view remains largely that human activity is the dominant cause of climate change and that we are nearing a tipping point at about 1.5°C, after which steadily worsening and irreversible increases in temperature will occur.
Surely those individuals, media and political parties who articulate their views on the need to protect our environment and reduce our use of fossil fuels serve a genuine purpose in reminding us of the longer term.
However, if after further research it appears true that carbon dioxide is not as pernicious a greenhouse gas as had been thought, and if it also appears true that anthropogenic activity is not such a dominant cause, then we have the opportunity to pause and consider our next steps. In those circumstances, we should consider Professor Raine’s view - that the way forward requires prudence, but not rigid belief in an impending crisis.
Anon 1.12
"Implausible" said UN IPCC with regard to RCP8.5.
After watching the fires at oil refineries in our current war zones, I don't give a rats if I drive for the pleasure of it.
We need to be practical, I agree nuclear has the biggest return but introducing it into our power production in the next 20 years seems unlikely. We’ve invested so much political capital into ‘nuclear =death” that opinion won’t change.
Batteries are the next ‘Green’ solution and fortunately NZ has an abundance of hydro lakes that are basically batteries. Forget pumped storage, we don’t need it.
Rooftop solar is inefficient, doesn’t work at night and the wind doesn’t blow in winter calm periods like now. But why not subsidise domestic solar and maybe farmers installing small wind turbines?
These generators, subsidised by individuals reducing their personal power costs, could help maintain higher lake (battery) levels.
Inefficient certainly, but government subsidies plus individual capital investment will help to get us through to a more rational nuclear future.
Australia has pushed rooftop solar and now has problems with frequency control at midday but we have hydro generators as the stabiliser.
Indeed David Seymour has a degree in electrical engineering and, yes, ACT probably has the most rational energy policy.
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