'Exciting' energy hub announced

The Government plan for a renewable heat hub in Southland is an exciting, albeit challenging prospect, Steve Canny of Venture Southland says.

Minister of Energy and Resources Simon Bridges announced the hub initiative yesterday, saying it was designed to increase the uptake of renewable energy.

Bridges promised a Government investment of $1.5 million over three years to encourage the uptake. Private investment was expected to match or better this funding, he said.

The initiative was expected to save 8000 tonnes of CO 2 a year, equivalent to taking 2500 cars off the road.

"Over the lifetime of the measures, almost 200,000 tonnes of CO 2 will be saved," Bridges said

The minister said with Southland's significant forestry and wood processing industry, 300,000 tonnes of wood waste was generated each year.

"Wood energy has a zero carbon footprint, and can be used instead of coal or gas in many situations.

"This wood waste could be cost-effectively used for industrial and commercial heat processes, but it is currently overlooked because of uncertainty in the market.

"Potential users are concerned about certainty of supply, and potential suppliers are unsure whether the demand justifies investment. The renewable heat hub initiative will see the Energy Efficiency and Conservation Authority work with suppliers and users in Southland to overcome this barrier."

Venture Southland enterprise and strategic projects group manager Steve Canny said his organisation was excited Southland had been selected for the initiative, a reflection of work that had been done since about 2003.

There was already some uptake in the province and that was expected to now increase.

"But it is like anything that's new. A lot of work is required to ensure the technologies and costings of the project are well understood and the way you supply the fuel is well understood," Canny said.

"So, there are the challenges and opportunities that are created by the announcement."

Bridges said business heat accounted for about 30 per cent of New Zealand's energy use, with around two-thirds generated from fossil fuels.

"By encouraging businesses to switch to renewable energy sources, such as wood, to generate their heat, we can significantly reduce New Zealand's carbon emissions."