The same supervolcano that provides one of the country’s bigger sources of catastrophic risk could well prove part of the answer to one of the country’s bigger problems on the path to 2050. It also helps to illustrate one of the problems in New Zealand’s approach to planning for net zero.

New Zealand will likely need an awful lot more electricity as carbon prices rise. Last week, GNS Science released work showing the potential for supercritical geothermal energy, tapping the much hotter temperatures found deeper. From 2037, it could start generating electricity equivalent to over a quarter of total current electricity generation, cost-effectively.

Geothermal has been part of the local energy mix since the Wairakei plant came online in 1958. As of Monday morning this week, geothermal energy provided 857 of the 5,190 MW of electricity generated, second only to the 3,399 MW generated by the country’s hydro dams.

More geothermal energy is coming onstream. But existing and planned geothermal plants rely on relatively shallow heat sources with less potential energy.

Supercritical geothermal taps deeper heat sources, where superheated pressurised water becomes a supercritical fluid containing enormous energy. The technology is still under development. Drilling stable wells to the depths necessary to tap that heat, and dealing with the fluids there present, poses formidable engineering challenges.

But developments in the US oil and gas industry have made deeper drilling more viable.

Two years ago, Eli Dourado, senior research fellow at the Center for Growth and Opportunity at Utah State University, outlined the state of play. If drills can reach depths where temperatures reach five hundred degrees, the fluid reaching the surface will still be supercritical.

He pointed to work by US startup Quaise who are testing gyrotron-powered drilling to reach those depths. After normal drills have reached basement rock, millimeter-wave drilling takes over, vitrifying the borehole as it goes to provide stable conduits. The technology literally vaporizes granite.

Quaise hopes to be able to drill to 20 kilometres. Supercritical temperatures can be found most places if drills can hit that depth. If it pans out, there is no need to rely on volcanic fields. Drilling at the sites of existing thermal plants could rely on existing transmission infrastructure and would enable swapping out a dirty technology for limitless clean energy. Quaise is currently targeting 2028 for the first repowering of a fossil-fired plant with clean geothermal steam.

Their timeline is obviously far more ambitious than projections of supercritical geothermal energy for New Zealand from 2037. And it still faces challenges.

Castalia’s commissioned work for GNS Science relied on fewer heroic technological developments, but still considered 2037 as ambitious. If the engineering challenges take longer to solve, and if regulatory approvals are not fast-tracked, 2045 could be more likely. But there remains some chance that innovation abroad, like that under development by Quaise, speeds everything up.

Beyond assessing plausible time horizons for the technology, Castalia’s report for GNS modelled how much supercritical geothermal energy might be commercially viable.

Rising carbon prices will make fossil fuel generation increasingly expensive. In the absence of other regulatory changes, supercritical geothermal generation could viably add around 1,365 MW of new capacity.

And what would otherwise be waste heat from the facilities could help process milk powder or wood pellets, if it were cost-effective to locate drying plants near the power stations. Alternatively, if the kind of technology Quaise has been working on bears fruit, new geothermal wells might be sited near existing drying facilities.

It is all very promising for the climate. But not so much for our carbon forecasting.

Castalia reported that none of the Climate Change Commission’s modelled pathways to a net-zero future considered the potential for supercritical geothermal to help with electrification – despite our sitting on one of the world’s most obvious places for trying it. The Commission’s work instead expects only relatively small increases in conventional geothermal power generation.

And that points to a problem with the approach New Zealand policy has been taking in setting emission pathways and budgets.

The fault is not with the Commission but with the impossible task it has been set. Forecasting exactly how we will achieve net zero is plausibly impossible.

Current policy requires the Commission to provide advice for government emission budgets and emission reduction plans set over five-year windows. It makes its best guesses about which industries and sectors will change, and by how much, and when. It projects how much of the job can or should be accomplished by reductions in gross emissions as compared to removals either by trees or other technologies that have yet to prove themselves.

None of it works particularly well. It invites unwarranted bureaucratic concern about whether a carbon credit issued by the government, or generated by planting trees, is surrendered in this emission budget period, or in the next one, or in the one after that.

As far as the climate is concerned, a carbon credit that is held for decades before someone uses it to cover a tonne of emissions is far better than one that is surrendered tomorrow: the unused credit does not accumulate in the atmosphere until it is surrendered. But as far as climate policy is concerned, the unit redeemed decades from now could jeopardise a future emission budget.

New Zealand’s Emissions Trading Scheme isn’t perfect. It could usefully be strengthened, and especially if an incoming government rightly wants to rely more heavily on the ETS.

But it gets one very big thing very right. It is agnostic about where net emission reductions will come from. It does not try to predict the future. Rather than try to prescribe pathways for reductions, it just sets a price on carbon emissions – and lets everyone decide how to respond to those prices.

Trying to pick pathways requires the government to make bets on which technologies will bear fruit and which will not. But officials, no matter how competent and well-resourced, are not well placed to make these bets – though they can certainly assist with the basic scientific research, as GNS Science continues to do.

What government is uniquely able to do is to provide a stable policy environment, set the number of unbacked carbon certificates it will issue between now and 2050, and commit to clean carbon accounting on both emissions and removals. If new technologies like supercritical geothermal energy, or cost-effective carbon mineralisation, or any of dozens of others prove successful, our path to 2050 will be far less costly. It requires no bets on any of them, just a system that rewards reductions in net emissions.

A climate and carbon planning apparatus that misses the volcano in our back yard might not be the country’s safest bet.

To read the article on the Newsroom website, click here.