Understanding NZ-ECs and New Zealand's Renewable Energy Market

July 5, 2023


How NZ-ECs are driving the energy transition and offer a competitive edge to organizations seeking to hit their decarbonization targets efficiently.

Executive Summary

New Zealand is making remarkable progress in its energy transition journey, with 82% of its electricity already sourced from renewable energy in 2021. However, achieving the nation's goal of 100% renewable electricity by 2030 requires direct action from organizations. In this blog post, we will explore how businesses can navigate the renewable energy market in New Zealand, efficiently hit their climate action targets, grow their business, and reduce the nation’s reliance on fossil fuels by leveraging New Zealand Energy Certificates (NZ-ECs).  

Overcoming Challenges in New Zealand's Energy Transition

Two main challenges must be overcome before New Zealand can complete its energy transition and achieve its 2030 goal. First, the intermittent nature of renewable energy sources like solar and wind makes it challenging to rely on them consistently. Second, dry-year risks pose a problem for hydropower, which is currently the leading renewable energy source in the country. As a result, fluctuations in renewable electricity production can lead to a reliance on fossil fuels to bridge the demand-supply gap. 

Luckily, businesses can directly help solve these problems by procuring renewable energy with NZ-ECs. To gain a deeper understanding, let’s take a closer look at what NZ-ECs are, how they are created, and what purpose they serve to facilitate New Zealand’s renewable energy strategy as it progresses toward Net-Zero.

Understanding NZ-ECs

What are they?

New Zealand Energy Certificates (NZ-ECs), like all Energy Attribute Certificates (EACs) globally, are a way for businesses to prove that their energy was produced from renewable sources.  

What purpose do they serve?

Even though renewable energy comprises a high percentage of New Zealand’s grid, it is impossible to separate once it mixes with non-renewable electricity. Thus, NZ-ECs enable businesses to trace the source of their electricity, ensuring it comes from renewable sources and allowing them to claim and communicate their renewable energy usage without reputational risk. 

How are they created?

Renewable electricity generated from wind, solar, and hydro sources can create NZ-ECs. The New Zealand Energy Certificate System (NZECS), established in 2018 and provided by Certified Energy, enables registered renewable electricity producers to issue a certificate for every 1MWh of renewable electricity they generate. Thus, they represent renewable energy both produced and used.

All EACs issued in New Zealand are under the NZEC trading system, which means NZ-ECs are the only type of EACs that businesses can use as proof of procuring renewable energy from New Zealand. 

Breaking the Cycle of Fossil Fuel Reliance and Driving Change with NZ-ECs

To end the reliance on fossil fuels and achieve their renewable energy goals, businesses can take direct action by sourcing renewable energy through NZ-ECs. These certificates allow businesses to put a direct demand on renewable electricity supply, driving its further development, deployment, and scalability through investment.    

Leveraging NZ-ECs for Business Growth

Sourcing renewable electricity through NZ-ECs not only helps you hit your long and near-term renewable energy targets but also has the potential to grow your business. Here's why: 

One of the key advantages of procuring NZ-ECs is the transparency they provide. Each certificate is equipped with a unique serial number, ensuring its integrity and preventing double-counting, thus maintaining absolute integrity in the process. Additionally, they offer businesses detailed insights into the renewable electricity they source, including information about the technology used and the location of the generating plant. Thus, businesses can effectively demonstrate and communicate their renewable energy usage, appealing to environmentally conscious consumers who are increasingly focused on businesses that are committed to sustainable practices. Moreover, by sourcing NZ-ECs, businesses can establish themselves as a leader in renewable energy adoption, showcasing their commitment to sustainability and responsible practices. This sends a powerful message to stakeholders, instilling confidence in a business's dedication to making a positive environmental impact.  

NZ-ECs also offer a cost-effective solution for sourcing renewable electricity. Unlike other methods, they grant businesses the flexibility to scale up their renewable energy usage across dispersed operational sites without the need for complex logistics. This provides businesses with an efficient and streamlined approach to meeting their renewable energy needs, optimizing resource allocation, and driving cost savings. 

Decarbonize Your Business with NZ-ECs

On the road to decarbonization, sourcing renewable electricity via NZ-ECs plays a significant role, as they are unequivocally supported by the Greenhouse Gas Protocol as a best-practice means to reduce scope 2 emissions. This means NZ-ECs can help all businesses in New Zealand decarbonize, and those that have set their renewable energy goals through initiatives like RE100 or SBTi hit their targets efficiently and with the confidence of knowing the solution is backed by leading global frameworks.  

Achieve Your Renewable Energy Goals with ACT

Businesses that choose ACT as their NZ-EC procurement partner benefit from our experience, network, expertise, and dedication. 

ACT offers a partnership that strategically aligns with our clients, and we ensure that we have a thorough understanding of their unique business needs so we can source and procure the type of NZ-ECs they need to hit their targets. Businesses that have informal or formal renewable energy goals through initiatives like RE100 or SBTi or are looking to gain or maintain a Toitū Certification can do so completely and in the near and long term with NZ-ECs, which ACT can source according to your organization’s goals and needs.  

With over fourteen years of experience sourcing EACs across the globe, we are uniquely positioned to navigate markets efficiently and help businesses mitigate risk and maximize every opportunity to hit their decarbonization targets. ACT can guide businesses in developing the right procurement strategy, navigating the market, and achieving renewable energy goals efficiently,  

 Reach out to our renewable energy and carbon market expert Reuben Gedye to learn how your organization can hit its renewable energy targets with NZ-ECs on its journey to Net-Zero.