Low Enthalpy Geothermal Energy New Zealand Planning and … · 5.3 Test Project One – Small Scale Residential ... Status of Report Final File Location SDB004 Our Ref SDB004 Signatures

Low Enthalpy Geothermal Energy

New Zealand Planning and Regulatory Assessment: Resource Management Act 1991 and Building Act 2004

FINAL REPORT

Prepared for:

GNS Science June, 2011

Prepared by: Environmental Management Services Limited

P.O. Box 149 NAPIER

E N V I R O N M E N T A L M A N A G E M E N T S E R V I C E S

L i m i t e d

Low Enthalpy Geothermal Energy June, 2011 DRAFT New Zealand Planning and Regulatory Assessment April 2011

E N V I R O N M E N T A L M A N A G E M E N T S E R V I C E S 2

Table of Contents

1. EXECUTIVE SUMMARY ....................................................................................... 7

2. INTRODUCTION ................................................................................................... 8

3. LOW ENTHALPY GEOTHERMAL ENERGY IN NEW ZEALAND ........................ 9

4. NEW ZEALAND PLANNING AND REGULATORY FRAMEWORK .................... 10

4.1 Environmental Governance .................................................................................................. 10

4.2 Resource Management Act 1991 .......................................................................................... 12

4.2.1 Resource Consent Requirements for LEG Technologies ............................................... 13

4.2.2 National Policy Statements ........................................................................................... 14

4.2.3 National Environmental Standards ............................................................................... 15

4.3 Building Act 2004 .................................................................................................................. 16

4.3.1 Building Consent Requirements for LEG Technologies ................................................. 16

4.4 Treaty of Waitangi ................................................................................................................ 17

4.5 Energy Efficiency and Conservation Act 2000....................................................................... 17

4.5.1 Energy Efficiency and Conservation Authority.............................................................. 17

4.5.2 Draft New Zealand Energy Efficiency and Conservation Strategy ................................ 17

4.6 Regional Energy Strategies.................................................................................................... 19

4.7 New Zealand Emissions Trading Scheme .............................................................................. 20

4.8 Summary and Conclusions .................................................................................................... 21

5. GROUND SOURCE HEAT PUMPS .................................................................... 22

5.1 Potential Resource Management Issues ............................................................................... 24

5.2 Regulatory Assessment Methodology .................................................................................. 25

5.3 Test Project One – Small Scale Residential ........................................................................... 28

5.3.1 Consent Requirements and Costs ................................................................................. 28

5.3.2 Discussion ...................................................................................................................... 30

5.4 Test Project Two – Medium Scale Commercial .................................................................... 30


5.4.2 Discussion ...................................................................................................................... 33

5.5 Test Project Three – Large Scale Commercial ....................................................................... 35




5.5.2 Discussion ...................................................................................................................... 37

5.6 Information from Councils .................................................................................................... 37


6. DIRECT TECHNOLOGIES .................................................................................. 40

6.1 Potential Resource Management Issues ............................................................................... 41

6.2 Regulatory Assessment Methodology .................................................................................. 43

6.3 Test Project Four – Residential Heating ................................................................................ 45


6.3.2 Discussion ...................................................................................................................... 46

6.4 Test Project Five – Greenhouse Cluster Use ......................................................................... 47


6.4.2 Discussion ...................................................................................................................... 49

6.5 Test Project Six – Industrial Process Heat for Timber Drying ............................................... 50

6.5.1 Consent Requirements and costs ................................................................................. 50

6.5.2 Discussion ...................................................................................................................... 51

6.6 Information from Councils .................................................................................................... 52


7. DISCUSSION ...................................................................................................... 54

8. RECOMMENDATIONS ....................................................................................... 58

9. REFERENCES .................................................................................................... 62

Tables

Table 1: Planning and regulatory governance and administration in New Zealand ............................. 10

Table 2: Summary of resource consent activity status types ............................................................... 13

Table 3: Current National Policy Statements as at April, 2011 ............................................................. 14

Table 4: Current National Environmental Standards as at April, 2011 ................................................. 15

Table 5: Draft NZES 2010 areas of focus ............................................................................................... 18

Table 6: Draft NZEECS 2010 objectives ................................................................................................. 18

Table 7: Potentially regulated activities for GSHPs. .............................................................................. 24



Table 8: GSHPs: Regional Councils and TAs identified for assessment................................................. 26

Table 9: Regional consent requirements – Test Project One ............................................................... 28

Table 10: TA consent requirements – Test Project One ....................................................................... 29

Table 11: Indicative Resource Consent Charges - Test Project One ..................................................... 30

Table 12: Regional consent requirements - Project Two ...................................................................... 32

Table 13: TA consent requirements - Project Two ............................................................................... 33

Table 14: Indicative Resource Consent Charges - Test Project Two ..................................................... 33

Table 15: Regional consent requirements - Project Three ................................................................... 35

Table 16: TA consent requirements - Project Three ............................................................................. 36

Table 17: Indicative Resource Consent Charges - Test Project Three................................................... 36

Table 18: Potentially regulated activities for direct use technologies .................................................. 42

Table 19: Direct Use: Regional Councils and TAs identified for assessment ........................................ 43

Table 20: Regional council consent requirements - Project Four ......................................................... 46

Table 21: TA consent requirements - Project Four ............................................................................... 46

Table 22: Indicative Resource Consent Charges - Test Project Four .................................................... 46

Table 23: Regional Council consent requirements - Project Five ......................................................... 48

Table 24: TA consent requirements - Project Five ................................................................................ 48

Table 25: Indicative Resource Consent Charges - Test Project Five ..................................................... 48

Table 26: Regional Council consent requirements - Project Six ........................................................... 50

Table 27: TA consent requirements - Project Six .................................................................................. 51

Table 28: Indicative Resource Consent Charges - Test Project Six ....................................................... 51

Table 29: Summary of SWOT analysis ................................................................................................... 54

Table 30: Recommendations for improving the uptake of LEG Technology ........................................ 58

Figures

Figure 1: Schematic heat pump cycle. .................................................................................................. 22

Figure 2: Ground source heat pump configuration .............................................................................. 23



Figure 3: Horizontal ground loop GSHP ................................................................................................ 28

Figure 4: Proportion of Councils requiring consent for Test Project One............................................. 30

Figure 5: Open loop double well GSHP ................................................................................................. 31

Figure 6: Proportion of Councils requiring consent for Test Project Two ............................................ 34

Figure 7: Closed vertical loop GSHP ...................................................................................................... 35

Figure 8: Proportion of Councils requiring consent for Test Project Three .......................................... 37

Figure 9: Direct use cycle ...................................................................................................................... 40

Figure 10: Downhole heat exchanger ................................................................................................... 45

Figure 11: Proportion of Councils requiring consent for Test Project Four .......................................... 47

Figure 12: Cluster use ........................................................................................................................... 47

Figure 13: Proportion of Councils requiring consent for Test Project Five ........................................... 49

Figure 14: Direct use for industrial process heat .................................................................................. 50

Figure 15: Proportion of Councils requiring consent for Test Project Five ........................................... 52



REPORT INFORMATION

© Environmental Management Services Limited 2011. This document and its contents is the property of Environmental Management Services Limited. Any unauthorised employment or reproduction, in full or in part, is forbidden.

Status of Report Final

File Location SDB004

Our Ref SDB004

Signatures

Author(s) Simon Bendall

Reviewer Stephen Daysh

Janeen Kydd-Smith

Revision Dates Authorised by:



1. EXECUTIVE SUMMARY

This report is part of a broader study by GNS Science looking at ways to improve the uptake of low enthalpy geothermal energy use in New Zealand.

The focus of this report is the planning and regulatory framework of New Zealand and the implications it has for low enthalpy geothermal technologies.

Low enthalpy geothermal energy is typically defined as geothermal energy from 0°C to 150°C. This energy source is widely available in New Zealand.

The technologies that are used to access this energy are considered in this report in two broad categories: ground source heat pumps and the direct use of low temperature geothermal water.

Ground source heat pumps (also commonly referred to as geothermal heat pumps) offer an energy efficient method of space heating and cooling. They do not need “hot” ground to operate, and therefore can be installed almost anywhere in New Zealand. They work in the same manner as air source heat pumps, but instead of using the atmosphere as a heat source or sink, they use the ground, groundwater or surface water. Ground source heat pumps are very efficient, but do have high installation costs. The primary application in New Zealand is for heating and cooling.

Direct use technologies access low temperature (under 150°) geothermal heat found in association with active volcanic areas such as the Taupo Volcanic Zone or in the natural thermal gradient of the ground at depth. The primary application in New Zealand is for space heating and manufacturing and industrial heat.

The installation and operation of these technologies are regulated in New Zealand by the Resource Management Act 1991 and the Building Act 2004. Administration occurs at the national, regional, and local levels.

To test the regulatory framework, six test projects have been developed (three ground source heat pumps and three direct use projects) and the consenting requirements under various district and regional plans and the Building Act have been considered. Information has also been gathered from regional and district councils to compliment this analysis.

This analysis has identified that resource consents under the Resource Management Act are likely to be required by most LEG technologies, particularly in open loop systems that involve the direct take and discharge of water or geothermal water. In some cases, particularly in direct use applications, the consent requirements are extensive.

In most configurations, building consents are not required by ground source heat pumps, but will be needed in direct use applications.

There are a number of opportunities available to engage at the national, regional and local levels to improve the regulatory and planning framework that applies to these technologies. This report concludes with recommendations that should assist in increasing the penetration of low enthalpy geothermal technologies in the New Zealand energy space.



2. INTRODUCTION

This report considers the constraints and opportunities presented by New Zealand’s current resource management framework to the increased uptake and development of low enthalpy geothermal (“LEG”) resources.

LEG technology accesses the heat energy contained in the ground or water, or in association with more traditional geothermal systems, and uses this energy in such a way that provides for efficient heating and cooling of residential or commercial spaces, or to support industrial processes. It can also be used for electricity generation.

The Institute of Geological and Nuclear Sciences (“GNS Science”) is leading a study titled “Increasing Energy Use from New Zealand’s Low Enthalpy Geothermal Resources”. Funded by the Foundation for Research, Science and Technology (“FRST”), this study seeks to facilitate the increased utilisation of LEG resources for a range of residential, commercial, manufacturing and industrial applications. Some of the key reports that have been completed as part of this study include:

Building People into Plans: Insights into Decisions about Heating and Cooling New Zealand Homes (2010).

Heating and Cooling Homes: A Study of Residential Householder’s Practices and Views on Energy, Adopting New Technologies and Low Temperature Geothermal Resources (2010).

Low Enthalpy Geothermal Energy - Technology Review (2010)

Energy Demand Estimation for Cooling and Heating in New Zealand (2010)

Swedish Ground Source Heat Pump Case Study (2009)

A Practical Guide to Exploiting Low Temperature Geothermal Resources (2006)

This report by Environmental Management Services Limited (“EMS") seeks to build on this existing body of work by conducting an assessment of the resource management framework in New Zealand and the requisite implications it has for LEG technologies.

This report will focus on the use of LEG technologies for space heating and cooling and industrial process heat, which are most likely applications in a New Zealand setting. LEG technology has also been utilised for electricity generation in some applications overseas.

This report is structured as follows:

Sections 1 through 3 provide introductory and background information

Section 4 provides an overview of New Zealand’s planning and regulatory environment as it relates to LEG technologies, including environmental governance structures, relevant legislation with a particular focus on the Resource Management Act 1991 (“RMA”) and the Building Act 2004 (“Building Act”), regional energy policies and the Treaty of Waitangi.



Section 5 considers the regulations that apply to ground source heat pumps (“GSHPs”) which can access atypical or unconventional geothermal resources that are readily available across New Zealand.

Section 6 considers the regulations that apply to the direct use of heat, focusing on the geothermal resources that occur in and around active volcanic areas in the Taupo Volcanic Zone (“TVZ”) and Ngawha in Northland.

Section 7 discusses key strengths, weaknesses, opportunities and threats associated with New Zealand’s planning and regulatory framework that have emerged through this analysis.

Section 8 offers recommendations and methods to improve the current regulatory environment to support increased LEG utilisation.

3. LOW ENTHALPY GEOTHERMAL ENERGY IN NEW ZEALAND

LEG energy is defined as geothermal heat in the 0°C to 150°C temperature range. In terms of practical application, this means that soil deep enough to avoid freezing in winter, ground or surface water in liquid state, and geothermal systems producing heat less than 150°C, all have the potential to provide LEG energy.

Internationally, this resource is widely utilised and technologies that seek to exploit it are well developed. This technology is particularly popular in Europe, where individual homes, large commercial spaces, industrial processes and in some cases entire neighbourhoods and cities are taking advantage of this renewable method of providing energy.

In New Zealand, geothermal development has primarily focused on electricity generation from high temperature fields (>200°C), such as those found in the Taupo Volcanic Zone (“TVZ”) and at Ngawha in Northland. LEG technologies are underutilised, yet are well placed to assist in meeting some of New Zealand’s growing energy demand.

A study by GNS Science (Rossouw & Lind, 2010) recommends that to foster increased LEG use to contribute to meeting the predicted future energy demand in New Zealand:

“Ground source heat pumps could usefully be a focus for the commercial and residential sectors…

Manufacturing industries should be encouraged to locate in areas such as the Taupo Volcanic Zone or near geothermal resources where heat is available at over 100°C.”

These recommendations serve to guide this report, which will focus on applications of LEG energy for commercial and residential sectors (heating and cooling through ground source heat pumps) and manufacturing industries (direct use of geothermal heat).



4. NEW ZEALAND PLANNING AND REGULATORY FRAMEWORK

New Zealand’s planning and regulatory framework consists of a number of pieces of legislation, statutory documents and regulatory and non-regulatory instruments, administered at the national, regional and local levels.

The primary regulatory instruments in relation to LEG technologies are the RMA and the Building Act. Sitting behind this legislation are a number of related policy documents. This section presents an overview of these frameworks and how they apply to LEG technologies. It also briefly considers other relevant policy frameworks and the degree to which support is provided by them for the increased adoption of LEG technologies, and acknowledges the presence of claims brought under the Treaty of Waitangi.

4.1 Environmental Governance Central government, regional councils and territorial authorities (“TAs”) all have a role to play in the governance and administration of environmental regulation. Table 1 presents this structure.

Table 1: Planning and regulatory governance and administration in New Zealand

Governance Level

Legislation Responsible Agency

Statutory Documents / Process

Purpose / Function Types of Consents Issued

Central RMA Ministry for the Environment

RMA law, reforms and amendments

―…to promote the sustainable management of natural and physical resources.‖

N/A

RMA Ministry for the Environment

National Policy Statements

―…to state objectives and policies for matters of national significance that are relevant to achieving the purpose of [the RMA].‖

N/A

RMA Ministry for the Environment

National Environmental Standards

Prescribe technical standards, methods, or requirements that apply nationally – national baseline standards.

N/A

Building Act Department of Building and Housing

Building Act law, reforms and amendments

―…to provide for the regulation of building work, the establishment of a licensing regime for building practitioners, and the setting of performance standards for buildings, to ensure that— (a) people who use

buildings can do so safely and without endangering their health; and

N/A



Governance Level

Legislation Responsible Agency

Statutory Documents / Process

Purpose / Function Types of Consents Issued

(b) buildings have attributes that contribute appropriately to the health, physical independence, and well-being of the people who use them; and

(c) people who use a

building can escape from the building if it is on fire; and

(d) buildings are

designed, constructed, and able to be used in ways that promote

sustainable development.‖

Regional RMA Regional Councils

Regional Policy Statements

Provides an overview of regional resource management issues and sets the basic direction for environmental management in the region.

N/A

RMA Regional Councils

Regional Plans

Manages water, coastal areas, soil and air.

Coastal Permits

Water permits

Discharge Permits

Land use consents

Local RMA Territorial Local

Authorities

District Plans Manage the use and

development of land and contaminated land.

Land use

consents

Subdivision consents

Building Act Territorial Local Authorities

Building Code Sets out performance standards that building work must meet, and covers aspects such as structural stability, fire safety, access, moisture control, durability, services and facilities.

Building consents



4.2 Resource Management Act 1991 The Resource Management Act 1991 is New Zealand’s primary environmental legislation. At its passing in 1991, it established an integrated framework for the management of the environment that was previously fragmented into 69 different Acts and Amendment Acts and 19 different regulations and orders.

The purpose of the RMA is to promote the sustainable management of natural and physical resources. This is achieved, as outlined in Table 1 above, at the national, regional and local level through various statutory instruments.

The key concepts of the RMA that are pertinent to LEG technologies are:

The RMA focuses on managing the environmental effects of activities with an overarching purpose of promoting the sustainable management of natural and physical resources.

In simple terms, regional councils manage the effects of activities on water, coast, air and soil and TAs manage the effects of activities on land.

Each regional council develops a regional policy statement and a regional plan that sets out methods for managing the water, coast, air and soil within their region. The regional plan must give effect to the regional policy statement and any national policy statement.

Each TA develops a district plan to manage land use activities within the city or district. The Plan must give effect to any regional policy statement or national policy statement and be consistent with the relevant regional plan.

Resource consents may be required from either or both of the relevant regional council or TA for a given LEG application, depending on the activities involved and the requirements of the relevant regional or district plan. For example, by default a resource consent will be required for taking geothermal water unless specifically provided for by a rule in a regional plan.

While most resource consents are issued on a “non-notified” basis, an application for resource consent must be publicly notified if the activity will have adverse effects on the environment that are more than minor, and may be notified in other special circumstances.

Public notification of resource consent applications is designed to give the general public and interested parties the ability to submit in support or opposition of a proposal, in accordance with their views on how the proposal will affect them.

In preparing a resource consent application, the applicant must prepare an Assessment of Environmental Effects (“AEE") which sets out the types of environmental effects their proposal may generate and how these are to be managed. For example, if a resource consent is required from a regional council for taking geothermal water, the applicant will need to demonstrate how any resultant effects on the environment will be avoided, remedied or mitigated.

When a particular activity requires resource consent from a regional council or TA, it will have an “activity status” determined by the applicable regional or district plan. An activity



status sets the level of scrutiny a particular resource consent application will come under, and accordingly affects how difficult gaining consent is likely to be. Table 2 summarises the different types of activity status under the RMA:

Table 2: Summary of resource consent activity status types

Type of Activity Requires resource consent

Must be granted

Can be granted

Matters to be considered restricted

Permitted No N/A N/A N/A

Controlled Yes Yes N/A Yes

Restricted Discretionary Yes No Yes Yes

Discretionary Yes No Yes No

Non-complying Yes No Yes No

Prohibited N/A N/A No N/A

It is also important to highlight recent changes to the RMA that are relevant to LEG technologies. The Resource Management (Energy and Climate Change) Amendment Act 2004 (2004 No 2) defines geothermal energy as renewable for the purposes of the Act, and requires councils to consider the benefits to be derived from the use and development of renewable energy. New clauses to Section 7 of Part 2 of the RMA were added to require all persons exercising functions and powers under the Act to have particular regard to:

(ba) the efficiency of the end use of energy

(i) the effects of climate change

(j) benefits to be derived from the use and development of renewable energy.

This means that in the event that a Council is making a decision on a resource consent application for a particular LEG energy project, such as a ground source heat pump or geothermal heating for a greenhouse, considering the benefits of efficient energy use, low green house gas emissions, and the fact that a renewable resource is being utilised, must come into the decision making process. Along with other renewable energy sources, this gives LEG projects a distinct benefit under the RMA framework.

4.2.1 Resource Consent Requirements for LEG Technologies Under the RMA, each regional and district plan will have different objectives, policies and rules in accordance with the particular local environment. The effect of this is that the activity status (permitted through to prohibited) of a particular LEG project will vary in different parts of the country. The assessment of consent requirements for ground source heat pumps and direct use applications of LEG technology are outlined in this report in sections 5 and 6 respectively.



4.2.2 National Policy Statements As outlined in Table 1 above, Central Government prepares national policy statements (“NPS”) to state objectives and policies for matters of national significance. In turn, regional councils and TAs must give effect to these policy statements through their respective regional and district plans. The intent is to assist local government to decide how competing national benefits and local costs should be balanced. Table 3 provides a summary of the six national policy statements that are currently in effect or under development:

Table 3: Current National Policy Statements as at April, 2011

Policy Name Purpose Status as of April, 2011

National Policy Statement on Electricity Transmission

A high-level framework that will give guidance across New Zealand for the management and future planning of the national grid.

In effect

Gazetted March 2008

New Zealand Coastal Policy Statement

Sets out policies regarding the management of natural and physical resources in the coastal environment.

In effect

Gazette November 2010 (replaced 2004 NZCPS)

National Policy Statement for Renewable Electricity Generation

Establishes the national significance of the benefits that are associated with renewable electricity generation.

Sets a target that 90 per cent of New Zealand’s electricity will be generated from renewable sources by 2025

In effect

Gazetted April, 2011

National Policy Statement on Indigenous Biodiversity

Provides clearer direction to local authorities on their responsibilities for managing indigenous biodiversity.

Contains a list of criteria for identifying areas of indigenous vegetation and habitats of indigenous animals that have been recognised as being rare and/or threatened.

In development

Currently notified for public consultation. Submissions close May, 2011.

National Policy Statement for Freshwater Management

Enhances management of New Zealand’s freshwater resources so that, by 2035, these meet the needs and aspirations of all New Zealanders

In Effect

Gazetted 12 May, 2011

National Policy Statement on Urban Design

Helps to improve the quality of urban design in New Zealand, complimenting voluntary, non-statutory initiatives like the New Zealand Urban Design Protocol, encourages a more integrated and co-ordinated national approach.

On Hold

Pending second phase of resource management reforms which include a work stream centred on urban planning issues.

The NPS for Renewable Electricity Generation has the greatest influence on LEG technologies. This NPS seeks to shift New Zealand towards greater use of renewable electricity generation techniques. As geothermal energy is formally defined by the RMA as a renewable resource, increased development of geothermal electricity generation projects should be expected as a result of this NPS, creating further opportunities for LEG technologies. These opportunities could be either in the



direct generation of electricity or as a cluster use, where activities establish to take advantage of well assets and geothermal reservoir knowledge associated with a primary geothermal user.

While it is currently on hold, there may also be opportunities for LEG technologies in the NPS on Urban Design. Issues such as climate change adaptation, liveable communities and growth management are all expected to form part of this NPS should it proceed, and LEG technologies could play a role here.

4.2.3 National Environmental Standards Central Government also has the role of preparing national environmental standards (“NES”) that set a nationwide “baseline” standard for the management of natural and physical resources. There are currently nine NES in effect or in development. These are summarised in Table 4.

Table 4: Current National Environmental Standards as at April, 2011

National Standard Purpose Status as of April 2011

Air quality standards Sets threshold concentrations for certain air pollutants.

In effect gazetted October 2004

Sources of human drinking water standard

Requires regional councils to consider the effects of activities on drinking water sources in their decision making.

In effect Gazetted December 2007

Telecommunications facilities

Provides for the installation of certain telecommunication facilitates as permitted activities and provides a limit for Radio Frequency fields.

In effect Gazetted September 2008

Electricity transmission Applies to existing high voltage electricity transmission lines only.

In effect Gazetted December 2009

Revised national environmental standards for air quality

Strengthens some provisions. Extends compliance dates.

Under review Outcome of review announced January 2011. Expected to be gazetted first quarter of 2011.

Contaminants in soil Sets a standard at which land is considered safe for human health, ensures that land affected by contaminants in soil is appropriately managed.

In development submissions closed April 2010

Ecological flows and

water levels

Promotes consistency in the way we decide

whether the variability and quantity of water flowing in rivers, ground water systems, lakes and wetlands is sufficient.

In development

submissions closed August 2008

Future sea-level rise Option being scoped to develop an NES that prescribes a base amount of future sea-level rise to plan for

In development draft discussion document has been prepared.

Plantation forestry To improve national consistency in local authority plan rules relating to plantation forestry and certainty for those involved in the management of plantation forests.

In development submissions closed October 2008

There is no direct effect for LEG technologies from any current NES that are in effect, however it is noted that the revised air quality standards are driving a shift away from old-style wood burners and open air fires, creating a demand for newer, cleaner heating options. GSHPs and the direct use of geothermal energy could help to fill this need.



4.3 Building Act 2004 The Building Act is administered by the Department of Building and Labour and sets a number of performance standards to which buildings must comply through the Building Code. Compliance is determined by building inspectors within TAs throughout the country. Generally, the focus of these performance standards is to ensure that new buildings are safe, healthy and well constructed.

4.3.1 Building Consent Requirements for LEG Technologies Ground Source Heat Pumps Applicable to GSHPs, exemption (jh) of Schedule 1 of the Building Act states that a building consent

is not required for the following building work:

“(jh) the making of a penetration no greater than 30 centimeters in diameter to enable the

passage of pipes, cables, ducts, wires, hoses, and the like through any existing building

and any associated building work, such as weatherproofing, fireproofing, or sealing the

penetration.‖

Exemptions in the Act are designed to recognise that minor and low risk building work should be exempt from the provisions of the Act. Exemption (jh) is to enable penetrations of a limited size to be made through both internal and external building components without a building consent. Such penetrations are typically necessary where wiring, pipes, cables and the like must pass through a building, such as that required when installing a heat pump unit (Department of Building and Housing, 2010). In discussing this with the Department of Building and Housing and with building inspectors from various TAs, it was confirmed that generally and as a result of exemption (jh), the installation of a GSHP would not require building consent, providing there was no interference with building foundations. As such, no further analysis of building consent requirements for GSHPs will be undertaken in this report. As GSHPs can vary significantly in terms of configuration, design, and location, it is suggested that anyone wishing to install a GSHP seek advice from the relevant TA or building professional to confirm Building Act requirements. Direct Use Technologies Clause G12 of the Building Code applies to direct use applications. The key objectives of this clause are to:

a) safeguard people from illness or injury caused by contaminated water: b) safeguard people from injury caused by hot water system explosion, or from contact with

excessively hot water: Under this clause specifically, building consent is required for direct use technologies, as they involve the supply of hot water to buildings. As this is a consistent requirement nationwide, no further analysis will be undertaken in this report. As with GSHPs, the relevant TA or building professional should be consulted regarding Building Act requirements for a specific direct use installation.



4.4 Treaty of Waitangi It is appropriate in this report to acknowledge the presence of claims brought by Iwi under the Treaty of Waitangi regarding the ownership of geothermal resources. For these Iwi, geothermal resources are a significant taonga that have formed a vital part of their culture and cultural practices for generations.

Under current New Zealand law, no one party “owns” geothermal resources, however regional councils are responsible for allocating heat and fluids through the resource consent process.

The approach to be taken by the Crown and Iwi to resolve these claims is yet to be determined. However, proponents of projects that involve the access of geothermal resources should be cognisant of this ongoing process.

Post claims, there is potential for Iwi to have access to additional resources such as land or capital. LEG technologies may present an opportunity for Iwi to sustainably develop geothermal resources in such a way that respects values such as kaitiakitanga. An example of this is the Tuaropaki Trust developments at Mokai, near Taupo. The Trust is an Ahu Whenua Trust in terms of the Te Ture Whenua Maori Act 1993, and in addition to other business ventures, has developed a geothermal power station with total capacity of 110 MW and over 10 hectares of greenhouses that are temperature controlled using geothermal energy.

4.5 Energy Efficiency and Conservation Act 2000 The purpose of the Energy Efficiency and Conservation Act 2000 is to promote energy efficiency, energy conservation, and the use of renewable sources of energy. The act established a number of important elements in the energy sector. These are described below.

4.5.1 Energy Efficiency and Conservation Authority The Energy Efficiency and Conservation Authority (“EECA”) has a mandate to encourage and promote energy efficiency, energy conservation, and the use of renewable sources of energy in New Zealand.

EECA provide a range of information to consumers regarding energy options, and include a useful overview of geothermal energy including ground source heat pumps on their website.

The EECA “New Zealand: Heat Smart” program provides grants to homeowners for the installation of insulation and energy efficient heating options. LEG technologies are not currently supported by this scheme.

4.5.2 Draft New Zealand Energy Efficiency and Conservation Strategy The New Zealand Energy Efficiency and Conservation Strategy (“NZEECS”) is a requirement of the Energy Efficiency and Conservation Act 2000. The current draft was released for public consultation in July 2010, together with the New Zealand Energy Strategy (“NZES”). The submissions period closed in September 2010.



Together, these documents set the strategic direction on energy and the role energy will play in the New Zealand economy. They give effect to the Government's policy on the promotion of energy efficiency, energy conservation, and the use of renewable sources of energy. A number of strategic objectives and policies are set within these documents, and these are summarised in Table 5 and Table 6 below.

Table 5: Draft NZES 2010 areas of focus

New Zealand Energy Strategy

Develop petroleum and mineral fuel resources

Develop renewable energy resources

Embrace new energy technologies

Competitive energy markets deliver value for money

Oil security and transport

Reliable electricity supply

Better consumer information to inform energy choices

Enhance business competitiveness through energy efficiency

An energy efficient transport system

Warm, dry, energy efficient homes

Best practice in environmental management for energy projects

Reduce energy-related greenhouse gas emissions

Table 6: Draft NZEECS 2010 objectives

New Zealand Energy Efficient and Conservation Strategy

Transport

A more energy efficient transport system, with a greater diversity of fuels and renewable energy technologies.

Business

Enhanced business growth and competitiveness from energy productivity investment.

Homes



Warm, dry and energy efficient homes with improved air quality to avoid ill-health and lost productivity.

Products

Greater business and consumer uptake of energy efficient products.

Electricity System

An efficient, renewable electricity system supporting New Zealand’s global competitiveness.

Public Sector

Greater value for money from the public sector through increased energy efficiency

LEG energy has a role to play in a number of these focus areas, and both documents highlight this fact with direct references to low enthalpy geothermal energy use.

Some guidance is also provided in these documents to TAs and regional councils in terms of their role in energy:

“Councils are encouraged to consider how their decisions under the Building Act 2004 and in administering the Building Code affect how easily building owners are able to install features such as solar hot water heating. Councils can encourage developers to improve the energy performance of new homes and buildings through good design.”

“Regional policy statements and regional and district plans, prepared under the RMA, will play a critical role in supporting the development of renewable energy resources and regional economic growth.”

“Local authorities also play a valuable leadership role in the promotion of energy efficiency and conservation and greater uptake of renewable energy and clean heating options.”

While these documents are still in draft, they provide strong support for renewable and efficient energy use, with direct reference to low enthalpy geothermal resources. Should the current regulatory environment under regional plans, district plans or the Building Act present any substantial or unnecessary restrictions on the increased use of LEG technologies, this high level support provides a sound foundation from which to pursue appropriate changes.

4.6 Regional Energy Strategies Partly within the context of direction provided by the NZES and NZEECS, regional planning for energy has taken on greater importance with a number of regional councils preparing regional energy strategies.



Regional energy strategies look at the whole spectrum of energy resources and opportunities available within a specific region. At the time of writing, the following have been completed and published:

Waikato Regional Energy Strategy (2009)

Canterbury Regional Energy Strategy (revised, 2008)

Southland Regional Energy Strategy (2003)

It is also noted that the Bay of Plenty Regional Council has recently secured additional funding to advance their regional energy strategy, and others may also be in development.

Taking the Waikato example, the strategy has a number of initiatives aimed at enhancing energy efficiency and use. Geothermal resources feature prominently, both in terms of direct use of geothermal energy and GSHPs, where both are referenced and highlighted directly. This is significant in terms of potential planning constraints for the greater use of LEG technologies, as it confirms as a policy decision that the Council is looking to support the increased use of these technologies. As an example of this, the Energy Strategy states that

‘Environment Waikato’s new geothermal policy allows the use of groundwater for domestic heating as a permitted activity (not requiring resource consent) provided the heat is extracted in situ, and the water retained in the ground”

Regional energy strategies present a powerful tool to both raise awareness and reduce regulatory barriers for LEG technologies, particularly where they are subsequently implemented though regional and district plans and polices.

4.7 New Zealand Emissions Trading Scheme The Climate Change Response Act 2002 introduced the New Zealand Emissions Trading Scheme (“NZ ETS”) in order for New Zealand to meet its obligations under the Kyoto Protocol. The NZ ETS applies to using geothermal water to generate electricity or for industrial heat, with reporting obligations from 1 January 2010 (Ministry for the Environment, 2009). If an LEG technology project was in one of these areas then compliance with these regulations would be required.

A full analysis of the NZ ETS is not provided in this report, other than to note this reporting requirement. Further information can be found at http://www.climatechange.govt.nz/emissions-trading-scheme/.

http://www.climatechange.govt.nz/emissions-trading-scheme/

http://www.climatechange.govt.nz/emissions-trading-scheme/



4.8 Summary and Conclusions

1. The installation and operation of LEG technologies are regulated in New Zealand by the RMA and the Building Act.

2. The RMA is administered at the national, regional and local levels. A resource consent under the RMA is likely to be required for LEG projects.

3. The Building Act is administered at the national and local levels. A building consent is unlikely to be required for ground source heat pumps, however will be required for direct use technologies. Unlike resource consent requirements, this is the same in all parts of the country so no further analysis is provided in this report.

4. Claims have been brought under the Treaty of Waitangi regarding geothermal resources and these have yet to be resolved. This is considered a potential opportunity to future LEG development.

5. Through recent amendments to the RMA, the draft New Zealand Energy Strategy, draft New Zealand Energy Efficiency and Conservation Strategy and regional energy strategies, an extensive policy framework exists in these documents that provides direct support for LEG technologies.



5. GROUND SOURCE HEAT PUMPS

Ground source heat pumps (also called geothermal heat pumps) make use of established and relatively simple technology to provide efficient space heating and cooling. They are not reliant on “hot” ground, but take advantage of the natural thermal gradient found in the ground. Overseas, particularly in Europe, GSHPs are a mature technology that has been widely adopted. It is recognised as an underutilised technology in New Zealand (Ministry of Economic Development, 2010). A full overview of ground source heat pumps in their various configurations is provided in the 2010 GNS Science Report “Low enthalpy geothermal energy – technology review”1.

Figure 1 above shows a schematic heat pump cycle. Gas is passed through a heat exchanger (1) where it begins to transfer its heat to the surrounding environment which is cooler than it is. The cooling gas condenses to a liquid and passes through an expansion valve (2). This liquid passes through another heat exchanger (3), where it is cooler than the surrounding environment. Heat is absorbed from this environment to the point that the liquid vaporizes back to a gas. The gas passes through a compressor (4) which boosts the pressure (and temperature) of the gas by compressing it, starting the cycle again. The fluid used in these cycles is a refrigerant, which has a much lower boiling temperature than water. This allows it to shift from gas to liquid and back again at relatively low temperatures.

Air source heat pumps make use of this same cycle, using the atmosphere as a heat source or sink. In cooling mode, heat exchanger (1) in Figure 1 above is expelling heat to the atmosphere outside the building, while heat exchanger (3) is absorbing heat from inside. In heating mode, this is reversed.

1 Available online at http://www.gns.cri.nz/Home/Our-Science/Energy-Resources/Geothermal-Energy/Low-

temperature-geothermal-resources/Reports-and-Publications

Figure 1: Schematic heat pump cycle.

http://www.gns.cri.nz/Home/Our-Science/Energy-Resources/Geothermal-Energy/Low-temperature-geothermal-resources/Reports-and-Publications

http://www.gns.cri.nz/Home/Our-Science/Energy-Resources/Geothermal-Energy/Low-temperature-geothermal-resources/Reports-and-Publications



GSHPs operate in a similar way, and can also operate in reverse cycle. The difference is that, rather than using atmosphere as the medium from which to gather or dispose of heat, GSHPs use the ground, ground water or surface water. Figure 2 shows an example of this.

This configuration gives ground source heat pumps an efficiency advantage over atmosphere-based systems, as the natural thermal gradient in the ground keeps temperatures moderate throughout the year. For example, ground temperatures in New Zealand at 1.5m below the surface typically average between 12°C and 15°C (Thain, Reyes and Hunt, 2006). In other words, this provides an environment that is generally cooler than air temperatures in summer and warmer than air temperatures in winter.

A comparison of the coefficient of performance (“COP”) ratings for different heating solutions shows this efficiency advantage. COP is a measure of efficiency whereby a COP of 1 means that for every 1 unit of electricity used to run the appliance, 1 unit of usable heat is generated. A standard electrical heating appliance such as a fan heater has a COP of around 1, where an Energy Star rated air source heat pump will have a COP of around 3 (EECA Energywise). GSHP are able to achieve COPs of 5 or more, and a recent hybrid installation in the United Kingdom achieved a COP of 6.8 (Gazo & Lind, 2010).

One drawback with GSHPs is the higher cost of installation. While the increased energy efficiency over other systems offsets this initial cost in larger applications, in current market conditions the economics can become marginal in smaller residential scale applications, where other consumer preferences then drive installation.

In the following sections, the key resource management and regulatory issues associated with GSHPs are discussed and evaluated, to determine what regulatory barriers may exist to their increased use and uptake in New Zealand.

Figure 2: Ground source heat pump configuration



5.1 Potential Resource Management Issues GSHPs are an efficient method of heating and cooling spaces. This in itself has macro environmental benefits associated with reduced energy use and demand and benefits associated with climate change effects. Any potential local resource management issues will depend on the configuration and installation method.

There are two main GSHP configurations; open loop and closed loop systems. Each system has different potential environmental effects, and as discussed in Section 4 of this report, may involve activities that require resource consent under the applicable regional or district plan.

Closed Loop Systems involve sections of pipe laid horizontally or vertically in the ground or submerged in water, with a fluid (water or water/antifreeze solution) circulated through them to collect or dispose of low temperature heat energy. To be effective, horizontal systems generally involve pipes laid in a network over an area roughly double the floor area of the building to be heated. From an installation point of view, it is often quicker and cheaper to strip this entire area to a depth of 1 to 2 metres, lay the network of pipes, and backfill; although trenching is also an option. This can represent a significant amount of earth being moved, which if improperly managed, could cause environmental impacts. In vertical systems, pipes are laid vertically in drilled holes to depths of 60 metres or more, and any potential effects on groundwater through contamination during drilling needs to be managed.

Open Loop Systems involve the direct use of ground or surface water as the medium to transfer heat. Water is pumped to the heat pump unit where it either accepts or rejects heat, before being returned to the same or some other water source. While this configuration does involve a “take” of water, it is only being used as a medium to transfer low temperature heat energy. If the discharge is back to the original source, no depletion of the water source will occur. Further, the discharge water is free of contaminants and other than a minor change in temperature, is unaltered from its original state. In a New Zealand setting where environmental conditions are generally moderate and heating and cooling demands are fairly even, it is unlikely that discharge water will cause an appreciable change in the temperature of the water source overall (Warner & Allen, 1984).

Table 7 below lists some of the more common GSHP configurations and the associated activities that may trigger the need for a resource consent.

Table 7: Potentially regulated activities for GSHPs.

System Type

Configuration Regional Council Potentially

Regulated Activities TA Potentially Regulated

Activities

Closed loop

Horizontal closed loop

Earthworks

Earthworks

Compliance with district plan performance standards for associated structures (e.g. side yards, noise, etc)



Closed loop

Vertical closed loop Well drilling


Closed loop

Submerged loop Work on the bed of a

river or lake


Open Loop Single well and drainage field

Well drilling

Water take and use

Discharge to land or surface water


Open loop Double well or Standing column well

Well drilling

Water take and use

Discharge to groundwater


5.2 Regulatory Assessment Methodology As discussed in Section 4 of this report, the Building Act and the RMA together form the regulatory framework that applies to GSHPs.

An analysis of the Building Act is provided in Section 4.5, and given the conclusions of that section, i.e. that building consents are unlikely to be required for GSHP installations, no further analysis is provided here.

Under the RMA, each regional and district plan is specific to its area of effect and will have different objectives, policies and rules in accordance with the particular local environment. The effect of this is that a GSHP may need a resource consent in one area, but not in another. A different approach to analysing RMA requirements for GSHPs is therefore required.

For the purposes of this assessment it was determined that conducting a nationwide assessment of all potentially relevant planning documents would be time consuming and unnecessary. Rather, it was determined that a well constructed sample would provide sufficient data to meaningfully inform an analysis of the regulatory environment.

To select this sample, regions of New Zealand with the greatest potential for increased uptake of GSHP technology were identified. This was done by considering the regions with the greatest



predicted growth in energy demand for space heating and cooling. This equates to regions with the highest anticipated growth in the residential and commercial sectors.

On that basis, and using data available from studies conducted by GNS Science (Rossouw & Lind, 2010), the Auckland, Waikato, Wellington and Canterbury regions were identified for inclusion in the survey. All regional councils within these regions were selected as they were more likely to have a consenting interest in GSHP technology (refer to Table 7 above). TAs from within these regions were then selected based on population size, with any TA area with a population of over 30,000 residents included for analysis. In addition, it was considered appropriate to include the Otago and Southland regions, given that these regions had some of the greatest temperature variations in New Zealand and are potentially well suited to increased GSHP use. Both regional councils and the more populous TAs were included. In total, six regional councils and 27 TAs were selected for analysis. Table 8 below presents the regions and lists the associated regional councils (underlined) and TAs within each that were selected for analysis.

Table 8: GSHPs: Regional Councils and TAs identified for assessment

Auckland2

Auckland Regional Council

Auckland City Council

Franklin District Council

Manukau City Council

North Shore City Council

Papakura District Council

Rodney District Council

Waitakere City Council

Waikato

Waikato Regional Council

Waikato District Council

Matamata-Piako District Council

Hamilton City Council

Waipa District Council

Rotorua District Council

Taupo District Council

Wellington

Greater Wellington Regional Council

Kapiti Coast District Council

Porirua City Council

Upper Hutt City Council

Wellington City Council

Hutt City Council

Canterbury

Canterbury Regional Council

Kaikoura District Council

Waimakariri District Council

Selwyn District Council

Christchurch City Council

Timaru District Council

Otago Region

Otago Regional Council

Queenstown Lakes District Council

Dunedin City Council

Southland Region

Southland Regional Council

Southland District Council

Invercargill City Council

2 The newly formed Auckland Council will be developing a unitary plan that will replace the existing district and regional plans from the former city, district and regional councils. This report assesses the existing district, city and regional plans which are in effect at time of writing.



The assessment of the respective planning instruments of each regional council and TA was divided into two parts. The first part of the assessment considered the rules framework contained within each Plan. To test these rules, which contain a variety of thresholds and measures, three GSHP test projects were developed based on actual installations. The test projects were chosen to show, in a general sense, the likely consenting issues faced by likely future installations of GSHPs in New Zealand. The test projects selected were:

Test Project One: a small scale closed loop GSHP for residential use

Test Project Two: a medium scale open loop GSHP for commercial use

Test Project Three: a large scale closed loop GSHP, also for commercial use

A number of assumptions were required for each project to guide the assessment process. These are identified in each project description below. It is important to note that the results of the assessment of each project should be taken as a general guide to potential consenting requirements only. Any party wishing to install a GSHP should seek advice from a qualified planning professional or staff at the relevant regional council and TA to determine consenting requirements for their specific installation. To complete the analysis, each of the Councils were contacted in order to gain an understanding of the level of knowledge or experience Council staff had with GSHPs, to query the likely costs an applicant may face should resource consent be required for a project, and to assist with the analysis.

The results are presented in tables following each of the project descriptions below. The following explanatory notes relate to each of the columns in these tables:

Authority: The regional council or TA being assessed.

Consents required: A “yes” indicates that consents are required for the project from the authority in question. If consents are not required, the authority will not be listed in the table. Note that this report has only considered regulations for LEG technologies so it is only that portion of the project that has been assessed for consent requirements. Any consent requirements for the building or other elements have not been assessed.

Activities triggering consent: Provides the rule from the district or regional plan and the related activity of the project that triggers the need for resource consent.

Activity status (bundled): Lists the consent activity status of the project (refer to Table 2 in Section 4.2 of this report). If more than one consent is required, the “bundled” activity status is listed, which is the most restricted activity status of any required consents.

Indicative Resource Consent Charges: Council staff contacted as part of this study were asked to estimate resource consent charges (fees) for each project. Charges can vary substantially, particularly between non-notified and notified applications. These estimates are conservative, and actual costs may be higher. The cost ranges shown are defined by the lowest and highest estimate provided. These estimates do not include the applicants own costs associated with preparing the consent application.



5.3 Test Project One – Small Scale Residential

Configuration: Closed loop, horizontal ground loop.

Application: Residential space heating and cooling for single dwelling, 180m2.

Heat Pump Output: 10kW.

Project Description: The owners of a new building located in a rural or rural residential area on a relatively flat, 1,200m2 section are installing a ground source heat pump for space heating and cooling. As the house is located on a larger section, there is space to install a horizontal closed loop ground source heap pump, which is generally the most cost effective configuration for residential applications.

Given the soil type and size of the heat pump needed, an area of approximately 360m2 is required. The area is stripped to a depth of 1.5m, representing 540m3 of earthworks and approximately 33% of the subject site. Pipes are laid in a grid pattern approximately 2m apart to form a closed loop system, and the area is backfilled and immediately re-seeded in grass/pasture. A water / antifreeze solution is circulated through the pipes to gather or discharge heat.

Assumptions: Site is located in rural-residential (or similar) zone. No significant vegetation clearance required. No cultural or archaeological features present. Not located in coastal or erosion prone area. No listed tree or other protected feature present. No designation present. Earthworks are conducted in accordance with best practice guidelines for management of siltation and other effects.

5.3.1 Consent Requirements and Costs

Table 9: Regional consent requirements – Test Project One

Authority Consents Required

Activities triggering consent Activity Status

All regional councils in sample

No - -

Figure 3: Horizontal ground loop GSHP



Table 10: TA consent requirements – Test Project One

Consents Required



Yes Rule 7.9.4.4.2 – earthworks volume greater than 200m3

Restricted Discretionary


Yes Rule 9.4.1.3 – site works over 300m2


Manukau City Council Yes Rule 9.8.2 – earthworks volume greater than 200m3


Papakura District Council

Yes Rule 7.1.4 – excavation activities involving between 100 and 500 cubic metres of material

Controlled

Waitakere City Council Yes Rule 3.4(a) – earthworks volume greater than 300m3

Discretionary

Hamilton City Council Yes Rule 6.7.1 – earthworks volume greater than 40m3



Yes Rule i1.4 – earthworks volume greater than 50 m3

Discretionary

Kapiti Coast District Council

Yes Rule – D2.2.13 earthworks volume greater than 100m3

Discretionary

Hutt City Council Yes Rule 141 2.1 – earthworks volume greater than 50m3


Wellington City Council

Yes Rule 30.1.1.1.1 (a)(iv) – surface area exceeds 250m2


Christchurch City Council

Yes Rule 5.5.2 – earthworks volume greater than 240m3 and cut greater than 1.0 metres.

Discretionary

Queenstown Lakes District Council

Yes Rule 8.2.4.1 (a) - earthworks volume greater than 100m3

Rule 8.2.4.1 (b) - earthworks with a depth greater than 0.5 metres over an area greater than 200m²


Dunedin City Council Yes

Rule 17.7.4(iii) – earthworks volume greater than 200m3

Controlled



All other TAs in sample No - -

Table 11: Indicative Resource Consent Charges - Test Project One

Agency Indicative resource consent charges

Regional Consents N/A

TA Consents $800.00 - $2,500.00

5.3.2 Discussion As shown in Figure 4, no regional councils required resource consents for Test Project One. Resource consent was required by 48% of TAs in the sample, with the consents required ranging from controlled to discretionary activity status. In all cases, the consent requirement was triggered by earthworks provisions, either on a maximum volume basis and/or due to the depth of cut.

Under some district plans, Test Project One was very close to the threshold requiring consent. For example, Upper Hutt City Council would have required resource consent if the cut depth was any greater than the proposed 1.5 metres. In other cases, such as Waipa District Council, resource consent would be required where installation is a retrofit to an existing building, unless the installation forms part of a new build under a building consent. Across all TAs there are also many examples of provisions that trigger the need for a consent if the earthworks are occurring close to neighbouring boundaries, streams, or other features, if there is removal of vegetation involved, or if archaeological or cultural features are present.

Overall, the analysis indicates that a land use resource consent from a TA may be required for a project similar to Test Project One. Regional resource consents are unlikely to be required. Applicants considering installing a horizontal ground loop system should consider the requirements of the district plan in their area before deciding on system design, as small changes in design may remove the need for a resource consent altogether.

5.4 Test Project Two – Medium Scale Commercial

Figure 4: Proportion of Councils requiring consent for Test Project One



Configuration: Open loop, groundwater.

Application: Commercial space conditioning, airport terminal, 10,000m2.

Heat Pump Output: 70kW.

Description: An existing airport terminal that services a small city is undergoing a retrofit to modernise the building. A key goal of the retrofit is to improve energy efficiency and reduce energy costs. To achieve this, a ground source heat pump is being installed.

Two wells are drilled to a depth of approximately 60m to access an aquifer under the site. Groundwater is drawn up through the first well at a maximum rate of 3.9 l/second and a maximum volume of 340,000 l/day (337 m3/day). The groundwater is passed through a large heat pump that connects to a secondary system circulating a working fluid (water) around the building. This allows the heat pump to transfer heat in either direction from the working fluid, providing for the circulation of chilled water throughout the building in summer for cooling, and warm water in winter for heating. Once passed through the heat pump, the groundwater is piped to the second well for reinjection to the aquifer.

The groundwater take is non-consumptive and is only being used to gather or dispose of low levels of heat. No other contaminants enter the groundwater at any time and the entire take is returned to the originating aquifer in an otherwise unaltered state. In summer the groundwater returns to the aquifer approximately 8°C warmer than the source and in winter 4°C cooler. Under normal circumstances after reasonable mixing, this will not generate any appreciable temperature gain or loss from the aquifer overall.

Assumptions: Site is located in airport / commercial or similar zone. Aquifer is not identified for special restrictions or management provisions. Most widely applicable flow rate / volume controls for groundwater takes in regional plan used in favour of more permissive or restrictive controls on listed aquifers. Installation does not cause any substantial temperature change to aquifer given the properties of the aquifer (size, flow, porosity of rock, etc) and a fairly even cooling / heating demand.

Figure 5: Open loop double well GSHP




Table 12: Regional consent requirements - Project Two

Regional Council Consents Required

Activities triggering consent Activity Status (bundled3)


Yes Rule 6.5.25 – drilling of bore (controlled)

Rule 6.5.45 – taking of more than 100m3 of groundwater (discretionary)

Discretionary


Yes Rule 3.8.4.7 – drilling below water table (controlled)

Rule 3.3.4.18 – groundwater take (discretionary)

Discretionary

Wellington Regional Council

Yes Rule 15 – construction of a bore (discretionary)

Rule 16 – groundwater take more than 2.9l/s, 20,000 l/day (discretionary)

Discretionary


Yes Rule WQL31 – construction of a bore (restricted discretionary)

Rule WQN19 – groundwater take (restricted discretionary)



Yes Rule 14.1.1.1 – creating a bore (controlled)

Rule 12.2.4.1 – groundwater take greater than 1.5 l/s, 25,000 l/day (discretionary)

Discretionary


Yes Rule 22(a) – creating a bore or well (controlled)

Discretionary

3 Where multiple consents are required for the project, a “bundled” activity status is shown which is the most

restricted activity status of any required consents.



Rule 23(d) – groundwater take more than 2 l/s, 20,000 l/day (discretionary)

Rule 3(a) – discharge to groundwater (discretionary)

Table 13: TA consent requirements - Project Two

TA Consents Required



Yes Rule 9.4.1.4 – depth of excavation greater than 1.5m

Discretionary


Yes Rule 18.9.2 – earthworks volume greater than 200m3



Table 14: Indicative Resource Consent Charges - Test Project Two


Regional Consents $500.00 – $2,277.00

TA Consents $2000.00

5.4.2 Discussion Figure 6 below summarises the results of the analysis showing that all regional councils would require resource consent for Test Project Two, while consent was required from two of the TAs assessed.

Test Project Two involves the direct take and discharge of groundwater and all regional councils in the sample require consent to install this system. The bundled activity status for most councils was a discretionary activity.

It is interesting to note that a regional consent for groundwater take was required under all regional plans considered, and generally as a fairly restrictive activity status, even though the take proposed is non-consumptive and would not lead to a depletion of the aquifer concerned. Conversely, only one regional council also required a consent for the associated discharge to groundwater. This is



because other than a change in temperature, the discharged water is uncontaminated and not captured by most discharge rules, which seek to protect water quality.

The more restricted activity status for the water take is possibly out of step with the actual effect of an open loop GSHP. This is likely a result of rules frameworks being designed with more traditional groundwater take and discharge activities in mind, such as irrigation, where the depletion and contamination of aquifers is a concern.

Given that a GSHP installation has a small environmental effect, it is considered that even with the more restrictive activity status, gaining regional consent should not be overly problematic.

The potential effects generated by Test Project Two are generally outside the purview of TAs, and the results of the analysis showed most of the district plans in the sample did not require resource consent.

However, in discussing Test Project Two with TAs, there was some uncertainty raised on whether the works involved with Test Project Two falls within the definition of “earthworks” in its various iterations in the district plans considered. The same issue occurred with Test Project Three. As a fairly typical example, Queenstown Lakes District Plan defines earthworks as follows:

“Means the disturbance of land surfaces by the removal or depositing of material, excavation, filling or the formation of roads, banks, and tracks. Excludes the cultivation of land and the digging of holes for offal pits and the erection of posts or poles or the planting of trees.”

Whether or not the drilling involved with Test Projects Two and Three is captured by the earthworks definition of a particular district plan can determine TA consent requirements. For example, the Queenstown Lakes District Plan requires consent for any earthworks that expose groundwater.

It appears that in practice, most TAs do not consider the type of drilling associated with Test Project Two and Three as earthworks, however there is ambiguity in many earthworks definitions. Some Council planners considered that the issue could be argued either way and would need to be tested by an actual consent application. None of the TA’s providing advice on this issue had processed resource consent for this type of activity in the past.

Figure 6: Proportion of Councils requiring consent for Test Project Two



5.5 Test Project Three – Large Scale Commercial

Configuration: Closed loop, closely spaced boreholes naturally filled with groundwater.

Application: Commercial space conditioning, office building, 100,000m2.

Heat Pump Output: 275kW. Description: A large new office building is proposed on a previously developed site. The developer wishes to promote the building as a technologically advanced, eco-friendly development and as part of this theme is looking for maximum energy efficiency. Cooling of the building in summer and heating of the building of winter will be provided by accessing ground beneath the subject site as an energy source or sink. Up to 60 bores will be drilled to a depth of approximately 100 meters. Vertical “U” shaped pipes will be laid within each bore hole with plain water circulated through each to form a closed loop system. In summer this water is naturally cooled to approximately 15°C by circulating through the pipes in the bore holes. Once cooled, the water is circulated through heat exchangers installed in the ceilings of each floor, providing cooling for the building. In winter, a ground source heat pump is used to draw heat energy from the circulating water, providing heated water of approximately 45°C to the ceiling heat exchangers which in turn heat the building.


Table 15: Regional consent requirements - Project Three

Regional Council Consents Required



Yes Rule 6.5.26 – drilling of a hole that won’t be decommissioned

Controlled

Figure 7: Closed vertical loop GSHP




Yes Rule 3.8.4.7 – drilling below water table

Controlled

Wellington Regional Council

Yes Rule 15 – construction of a bore

Discretionary


Yes Rule WQL31 – construction of a bore

Controlled


Yes Rule 14.2.2.1 – Drilling of land over aquifer, not creating a bore

Controlled


Yes Rule 22(a) – creating a bore or well

Controlled

Table 16: TA consent requirements - Project Three

Consents Required



Yes Rule 9.4.1.4 – depth of excavation greater than 1.5m

Discretionary


Yes Rule 18.9.2 – earthworks volume greater than 200m3



Table 17: Indicative Resource Consent Charges - Test Project Three


Regional Consents $391.00 - $750.00

TA Consents $200.00 - $2000.00



5.5.2 Discussion Figure 8 shows the results of the analysis. These mirror the findings for Test Project Two in that all regional councils would require consent for Test Project Three, where it is a permitted activity in almost all TA plans.

In comparison to Test Project Two, there were a lower number of consents required under each regional plan for Test project 3, because it is a closed loop system that does not involve any take or discharge of groundwater. Potential environmental effects are therefore limited, and typically relate to the potential for groundwater contamination in the event that improper techniques are used in drilling, or the U pipes are not properly installed.

Related to this, the estimate of costs for attaining regional consents for Test Project 3 is lower than Test Project Two, even though the installed capacity of the heat pump unit is higher. Again, this is due to the closed loop configuration, which presents fewer potential environmental effects for consideration.

It is interesting to note that there is a wide range of consent activity types, ranging from controlled activity (consent must be granted) to the discretionary (consent may be granted, matters to be considered in making decision unrestricted). This could indicate that this type of activity has not been anticipated by some regional plans. For example, in some plans Test Project Three was captured by rules designed to manage the creation of bores, which are usually designed to be used in conjunction with water take rules. The holes drilled for Test Project Three are technically not bores, as they are not being drilled in an attempt to extract water.

Overall, it could be argued that there should be no resource consent barriers associated with the installation of Test Project Three.

5.6 Information from Councils Additional information was gathered from Councils contacted as part of the analysis process. This was to build a more comprehensive picture of potential barriers to increasing the uptake of GSHPs. Three questions relevant to GSHP were posed to Council planning staff, with the results described below. No Recorded Response (“NR”) in the results tables below indicate that either a Council could not provide the information or an appropriate member of staff could not be contacted to provide it.

Figure 8: Proportion of Councils requiring consent for Test Project Three



Question One: Have resource consent applications for GSHPs previously been received by the Council?

Yes (%) No (%) NR4 (%)

Regional Councils 50% 0% 50%

TAs 4% 48% 48%

Responses to this question show that very few GSHP consents have been applied for. This would reflect what is known about the current uptake of this technology in New Zealand. It was noted by a number of Councils however that a conclusive response to this question is difficult. For example, most Councils have a database of granted consents and it would be straightforward to report on the number of consents granted to establish bores, but querying how many of those bores were established to supply ground source heat pumps is a more complex query.

Question Two: What is the level of planning staff knowledge or awareness of GSHP technology?

Limited (%) Some (%) Good (%) NR%

Regional Councils 0% 0% 50% 50%

TAs 33% 11% 8% 48%

It is desirable for planning staff in Councils to be familiar with GSHP technology in order to fully assess potential environmental effects and to balance these against benefits. Responses to this question however, show there is generally a low level of familiarity amongst planning staff. As this is an emerging technology in New Zealand with few installed examples, this is perhaps unsurprising. It should be noted that of those planning staff that were familiar with GSHPs, there was a high degree of enthusiasm and support for this technology.

Questions Three: Do regional council clean heat programmes support, advocate or have knowledge of GSHP’s?

Yes (%) No (%)

Regional Councils 0% 100%

With the exception of the Auckland Regional Council, all regional councils in the sample currently operate a clean heat or similar program. These programs are usually focused on

4 No Recorded Response



shifting residents away from open fires or inefficient log burners to clean heating options in order to meet clean air targets stipulated by the 2004 National Environmental Standard for Air Quality (refer to Section 4.2.3 of this report). In most cases they are also designed to assist residents to take advantage of the “EECA Warm Up New Zealand: Heat Smart” grant scheme, by providing financial assistance.

GSHPs are not specifically supported by any of the programmes, which in most cases are based around the appliances that are eligible for funding through the EECA scheme. GSHPs do not attract any funding from EECA, although they are mentioned on the EECA website as an efficient energy heating option.


1. GSHPs offer an energy efficient method of residential and commercial heating and cooling. By way of comparison, Energy Star rated air source heat pumps have a COP of around 3, or 300% efficient, where GSHPs are typically able to achieve a COP of 5 or more. A drawback is that current installation costs are high. Commercial scale operations with higher energy demand can offset this cost through efficiency gains and associated reduced energy costs.

2. Closed loop horizontal GSHPs may need resource consent from a TA as a result of the volume or depth of earthworks involved in their installation. However, it is likely that if system design is cognisant of the particular earthworks requirements of the applicable district plan, the need for resource consent may be avoided. In the event that resource consent is required, the cost should generally be under $1,000.00. Providing there are no cultural or archaeological features or other mitigating factors associated with a given site, it is not considered that any particular regulatory barriers exist to the installation of horizontal GSHPs.

3. In vertical configurations, resource consents are likely to be required from a regional council, but not from a TA. Closed loop systems should be straightforward to consent, and in most cases a consent is required for a controlled activity, meaning consent must be granted. Open loop systems are likely to face higher costs and greater planning scrutiny in the consent application process. It does appear that the rules frameworks that apply to open loop systems are designed to manage consumptive takes of groundwater. Given that open loop GSHPs involve a non-consumptive take and in most situations will not present a contamination threat to groundwater supplies, it is considered that consents should not be difficult to attain.

4. The level of awareness amongst planning staff of GSHP technology is generally low, and most have not considered resource consents applications for them in the past.

5. It should also be noted here that consenting requirements are likely to be simpler and less costly if the installation is being done as part of a new build, as opposed to a retrofit to an existing building. Test Project One, for example, did not require consent from some TA’s if it was being installed as part of a new, consented building. Further, GSHP installations may be able to be consented as part of the requisite consents for a new build, removing any stand-alone consenting costs and timeframes.



6. DIRECT TECHNOLOGIES

Low temperature geothermal resources are generally classified as those discharging fluid of up to 150°C from depth (Thain, Reyes & Hunt, 2006). From pre-European Maori to modern times, New Zealand has a rich history of low temperature geothermal uses, including bathing, cooking, healing and heating.

However, in general New Zealand’s extensive low temperature geothermal resources have been underutilised as development has been more focused on geothermal electricity generation from readily available high temperature resources (>150°C) in the Taupo Volcanic Zone (“TVZ”) and at Ngawha in Northland (Thain, Reyes & Hunt, 2006).

There remains good potential to develop LEG resources associated with the TVZ and Ngawha, and potentially other areas in New Zealand, using the local thermal gradient or accessing lower temperature fluids.

Figure 9 shows a typical open loop direct use cycle containing a primary and secondary circuit. The primary circuit consists of a production system that brings geothermal water/steam up through a well to the surface where it is passed through a heat exchanger, before being returned to the source via a disposal system. The secondary circuit forms the delivery system, and consists of water circulated through a heat exchanger to collect heat from the geothermal water and deliver it to the required application. A secondary circuit is not always necessary, and is generally only used when the geothermal water has properties that make it unsuitable for direct circulation.

Figure 9: Direct use cycle



In an alternative closed loop configuration, there is no take of geothermal water; pipes are lowered into wells to circulate water down into the ground where it gains heat and is brought back to the surface for use.

Direct use applications for LEG energy are primarily focused on the manufacturing / industrial sectors and include greenhouses, soil heating, crop drying, animal husbandry, aquaculture, industrial processes, drying and space heating. Electricity generation from low temperature geothermal water is also possible, using technologies such as the Kalina cycle and the Organic Rankine Cycle (Gazo & Lind, 2010). However, it is not anticipated that this will be a significant focus for New Zealand in the current climate given the existence of further high temperature geothermal resources that can be developed for this purpose.

In the following sections, the key resource management and regulatory issues associated with the direct use of low temperature geothermal resources will be discussed and evaluated, to determine whether there are any regulatory barriers that may exist to the increased utilisation of this resource in New Zealand.

6.1 Potential Resource Management Issues Direct use applications of LEG energy can provide an inexpensive and low carbon emission energy option for supporting industrial / manufacturing processes, as well as other heating applications.

Geothermal water is specifically defined under the RMA as:

“water heated within the earth by natural phenomena to a temperature of 30 degrees Celsius or more; and includes all steam, water, and water vapour, and every mixture of all or any of them that has been heated by natural phenomena”

The RMA assigns regional councils the responsibility of achieving sustainable management of geothermal water.

Similar to GSHPs, there are two main configurations for direct use applications, and each has specific potential environmental effects.

Closed Loop Systems do not involve a take of geothermal water, but circulate a working fluid (generally water) down into the ground to bring heat up to the surface by way of a downhole heat exchanger. Generally this configuration is suitable for lower heat load applications as it is not as efficient at bringing heat to the surface. However, the benefit of this system is that geothermal water is not being removed from the reservoir, thereby removing the potential effects associated with geothermal water take and discharge. In steam zones, the extraction of heat can still create pressure effects.

In Open Loop Systems, geothermal water is extracted through wells and used above ground. The heat may be transferred to a secondary working fluid or used directly. Cooled geothermal water is then usually re-injected below ground, but in some installations is discharged above ground or to surface water. Open loop systems are able to gather more heat than closed loop systems and hence have a wider range of applications. However, they typically have environmental impacts associated with the extraction and discharge of geothermal water.



Table 18 compares the potential consenting requirements for closed and open loop systems for direct use of LEG energy.

Table 18: Potentially regulated activities for direct use technologies

System Type

Regional Council Potentially Regulated Activities

TA Potentially Regulated Activities

Closed loop

Well Drilling

Take of heat

Significant Geothermal Feature present


Open Loop

Earthworks

Well Drilling

Significant Geothermal Feature present

Geothermal Water Take

Discharge of geothermal water

Air discharge

Odour


In terms of resource management issues, the direct use of geothermal water is a more complex scenario than that presented by a closed loop arrangement.

Geothermal energy is often an “unseen” resource, which presents perceived management challenges. Waikato Regional Council, who has jurisdictional responsibility for a good proportion of New Zealand’s geothermal resources, identifies the following key issues in the Geothermal Variation to the Waikato Regional Plan:

Issue 1: Inefficient take, use and discharge can unnecessarily accelerate the rate of depletion of the Regional Geothermal Resource.

Issue 2: Take, use and discharge of geothermal energy and water can adversely affect Significant Geothermal Features.

Issue 3: Some land and water use practices in the vicinity of Significant Geothermal Features can cause significant adverse effects on the features.

Issue 4: Large takes of geothermal energy and water from any geothermal system may cause adverse effects on other natural and physical resources including overlying structures (the built environment), such as those resulting from subsidence and land instability.



Issue 5: The discharge of geothermal energy and water can contaminate fresh water to an extent that reduces its suitability for other uses and may significantly adversely affect the health and intrinsic value of fresh water ecologies generally.

Issue 6: A lack of information and knowledge about the Regional Geothermal Resource and effects of its use can create uncertainty for management of the resource.

This list of issues presents a useful insight into the types of challenges faced by regional councils, and the matters over which they will be concerned in considering resource consent applications for the direct use of geothermal water. These types of issues have generally led to a precautionary approach being taken to the management of geothermal development (East Harbour Management Services, 2005).

Collaboration between the Waikato and Bay of Plenty regions is intended to result in a more aligned management approach. In both regions, geothermal systems are divided up into different management classifications. In the Waikato for example, five classes of geothermal systems have been identified based on system size, vulnerability of Significant Geothermal Features to extractive uses, and existing use. These systems are Development, Limited Development, Research, Protected and Small. Each classification has an associated management regime that is more or less restrictive, and this strongly influences the location of future LEG projects.

6.2 Regulatory Assessment Methodology Unlike GSHPs, direct use applications of LEG technology are generally more geographically constrained to those areas with readily accessible geothermal resources. In New Zealand, this means Northland and the Taupo Volcanic Zone, although there are other areas such as parts of the Alpine Fault zone in the South Island where accessible low temperature geothermal resources exist, or in other areas of New Zealand where the local thermal gradient might be adequate to support some energy delivery.

In this study the focus of the regulatory assessment was on planning instruments in effect within the two main areas in the North Island. Table 19 lists the three regional councils (underlined) and six TAs that were identified.

Table 19: Direct Use: Regional Councils and TAs identified for assessment

Northland

Northland Regional Council

Far North District Council

Taupo Volcanic Zone


Bay of Plenty Regional Council

Taupo District Council


Western Bay of Plenty District Council

Kawerau District Council

Whakatane District Council



The approach undertaken in Section 5 of this report for assessing the rules frameworks of each regional council and TA was adopted and applied to direct use technologies. Three test projects were developed, based on real world examples that are currently installed in New Zealand, and/or that are representative of likely future developments.

The projects selected are direct use applications for residential heating, a greenhouse, and industrial process heat for timber drying. A number of assumptions were required to be made for each project to guide the assessment process, and these are identified in each project description below.

It is important to note that the assessment results of each project should be taken as a general guide to potential consenting requirements only. The applicable regional council and TA should be consulted to determine consenting requirements for a specific installation. To complete the analysis, each of the Councils were contacted to gain an understanding of the level of knowledge or experience Council staff have with direct use applications, to query the likely costs an applicant may face should resource consent be required for a project, and to assist with the analysis of the rules framework.

The results of this analysis are presented in tables following each of the project descriptions. The following explanatory notes relate to each of the columns in these tables:

Authority: The regional council or TA being assessed.

Consents required: A “yes” indicates that consents are required for the project from the authority in question. If consents are not required, the authority will not be listed in the table. Note that this report has only considered regulations for LEG technologies so it is only that portion of the project that has been assessed for consent requirements. Any consent requirements for the building or other elements have not been assessed.

Activities triggering consent: Provides the rule from the district or regional plan and the related activity of the project that triggers the need for resource consent.

Activity status (bundled): Lists the consent activity status of the project (refer to Table 2 in Section 4.2 of this report). If more than one consent is required, the “bundled” activity status is listed, which is the most restricted activity status of any required consents.

Indicative Resource Consent Charges: Council staff contacted as part of this study were asked to estimate resource consent charges (fees) for each project. Charges can vary substantially, particularly between non-notified and notified applications. These estimates are conservative, and actual costs may be higher. The cost ranges shown are defined by the lowest and highest estimate provided. These estimates do not include the applicants own costs associated with preparing the consent application.



Figure 10: Downhole heat exchanger

6.3 Test Project Four – Residential Heating

Configuration: Closed loop - downhole heat exchanger.

Application: Residential space heating and domestic hot water for two dwellings, each 180m2.

Description: Two home owners on neighbouring sections are splitting the cost of installing a space heating and domestic hot water system by accessing geothermal energy beneath their sites using a downhole heat exchanger. This system does not involve any extraction of geothermal water.

A bore is drilled to 60 metres to access geothermal heat at approximately 100°C. Three sections of “U” shaped pipe are laid in the bore. The first pipe forms a closed loop system that circulates water to the bore to gather heat, and then out to both houses where it is piped through radiators to provide convective space heating, before returning to the bore to gather heat once more.

The second and third pipes provide separate hot water to each house. These are, in effect, open loop systems – the pipes are connected to the town water supply and as required, water is drawn through the pipes, down the bore to gather heat, and out to each house as consumptive domestic hot water. There is no need to store hot water on site at each house, as it may be sourced as required. Maximum heat drawn from the bore is approximately 700 MJ/day.

Assumptions: No significant geothermal features present. Located on residential (or similar) zoned land. Where geothermal systems are separated into different management regimes by regional plans, the project is assumed to be located on the geothermal system with the greatest capacity for development.




Table 20: Regional council consent requirements - Project Four


Activities triggering consent Activity Status (bundled)


Yes Rule 26.4.1 – construct a bore in geothermal area

Discretionary


Yes Rule 3.8.4.7 – drilling below water table

Controlled


Yes Rule 75 – installation of geothermal bore (restricted discretionary)

Rule – 73 Take of heat (discretionary)

Discretionary

Table 21: TA consent requirements - Project Four



All TAs in Sample No - -

Table 22: Indicative Resource Consent Charges - Test Project Four


Regional Consents $255.55 - $2,000.00+

TA Consents N/A

6.3.2 Discussion Consistent with Test Projects Two and Three and as shown by Figure 11 below, all regional councils would require resource consent for Test Project Four. No resource consents are required by TAs within the sample.

Interestingly, there was a wide range in the consent activity status between the various regional plans, with the type of consents required ranging from controlled to discretionary.



Figure 12: Cluster use

Waikato Regional Council has recently completed a number of energy initiatives, including the regional energy strategy and geothermal variation to the regional plan. One of the outcomes of the variation was to establish permitted activity standards for the take of heat where water is not extracted. This is directly applicable to downhole heat exchangers and explains the lower activity status result.

6.4 Test Project Five – Greenhouse Cluster Use

Configuration: Open loop, cluster use.

Application: Industrial process heat for greenhouse operation with floor area of 10,000m2.

Description: A greenhouse operation is being established near an existing geothermal facility.

The existing facility operates under resource consents for geothermal water take and discharge. An open loop system draws geothermal water at up to 300°C through production wells. The geothermal water is used to drive the primary process and the fluid is re-injected after use. Additional well assets may exist on the sites which are productive by not at a level that connection into the primary process is warranted. They are suitable for a lower temperature application.

The greenhouse operation will be built to use either the well assets unsuitable for the primary process or the geothermal water/condensed steam prior to reinjection. This fluid is either circulated directly through pipes in the greenhouse, or by way of a heat exchanger, provides convective heat for optimal growing conditions.

Figure 11: Proportion of Councils requiring consent for Test Project Four



Assumptions: No significant geothermal features present. Located on industrial (or similar) zoned land. Where geothermal systems are separated into different management regimes by regional plans, the project is assumed to be located within the geothermal system with the greatest capacity for development.


Table 23: Regional Council consent requirements - Project Five




Yes May require s127 change to existing resource consent conditions

Depends on original consent



Depends on original consent



All s.127 changes are deemed Discretionary

Table 24: TA consent requirements - Project Five



All TAs in Sample No - -

Table 25: Indicative Resource Consent Charges - Test Project Five


Regional Consents $0 - $1,500.00+

TA Consents N/A



6.4.2 Discussion All regional councils and no TAs required consent for Test Project Five, as shown by Figure 13:

In the same way that a cluster use project, such as Test Project Five, physically “piggy backs” onto an existing geothermal take and discharge system, it would also be required to join the existing consent regime under which the primary take is operating.

The way in which this happens is dependent on the nature of the existing consents. In some situations, the consent regime may provide for the take and discharge of geothermal fluid for a range of purposes, and there may be scope to include a cluster use provided that all other conditions are met. In other circumstances, existing consents may be more restrictive, such as restricting the temperature of discharge water to a certain range, or specifying the purpose for which geothermal water can be used. In these circumstances, a change to the existing conditions of the regional consents would be required. This is provided for by Section 127 of the RMA. In either circumstance, no additional consents from the TA will be required in terms of this use of LEG technology.

It is hard to assess the difficulty of gaining consents for Test Project Five, as this is entirely dependent on the nature of the primary take and the consents it is operating under. It is worth noting however, that consenting will be considerably simpler than establishing a new take, such as that required by Test Project Six. It is possible that there are no consenting requirements at all, if the primary take provides for the take and use. If changes to existing conditions of consent are required, information is likely to be readily available regarding the size and characteristics of the geothermal resource being accessed, from which the effects of taking additional heat can be readily modelled.

Figure 13: Proportion of Councils requiring consent for Test Project Five



6.5 Test Project Six – Industrial Process Heat for Timber Drying

Configuration: Open loop.

Application: Industrial process heat for timber drying.

Description: A timber milling business has shifted its operations to take advantage of geothermal energy for its timber drying processes in an effort to cut energy costs and reduce its carbon emissions. A site has been purchased over a geothermal system that can provide geothermal water and steam with temperatures up to 150°C. Four bores have been drilled, two to produce water and steam and two to re-inject water back into the system. Extraction will occur at a maximum volume of 4,000 tonnes per day. Geothermal water, once drawn to the surface by the production wells on neighbouring farmland, is piped to the facility where it is passed through heat exchangers that transfer the heat to a secondary working fluid (water). The secondary fluid is circulated through convectors in the kilns to heat and dry timber. The geothermal water is piped back out from the facility to re-injection wells located on neighbouring farmland.

Assumptions: No significant geothermal features present. Located on industrial (or similar) zoned land. Where geothermal systems are separated into different management regimes by regional plans, the project is assumed to be located on the geothermal system with the greatest capacity for development.

6.5.1 Consent Requirements and costs

Table 26: Regional Council consent requirements - Project Six


Activities triggering consent5 Activity Status (bundled)


Yes Full suite of consents required Discretionary


Yes Full suite of consents required

Discretionary

5 Test Project Six is a complex project that requires a full range of resource consents, the details of which are

not practical to provide in this table. See discussion under section 6.5.2 below for further information.

Figure 14: Direct use for industrial process heat




Yes Full suite of consents required Discretionary

Table 27: TA consent requirements - Project Six



Taupo District Council Yes Rule 4d2.3 – Non-compliance with a performance standard (yard rules, pipes crossing boundary)


Whakatane District Council

Rule 4.2.1.3 – Non-compliance with a performance standard (yard rules, pipes crossing boundary)


Western Bay of Plenty District Council

Rule 18.4.1(b) – Non-compliance with a performance standard (yard rules, pipes crossing boundary)


All other TAs in sample No

Table 28: Indicative Resource Consent Charges - Test Project Six


Regional Consents $774.00 - $15,000.00 plus annual charges

TA Consents $716.00 - $1,278.00

6.5.2 Discussion This project example presents the most complex regulatory situation of any of the previous five LEG project examples. Consents would be required by all regional councils, and half of the TAs, as shown by Figure 15 below:



The term “full suite of consents” has been used in Table 26 detailing regional consent requirements, as the consent requirements are extensive and complex. At a minimum, consent will be required for take and discharge of geothermal water and construction of the wells, but consent may also be needed to discharge to air (steam / vapour) and for other matters. Consenting for such a project will be a substantial undertaking. It will likely require scientific studies to determine the size and nature of the geothermal reservoir and interaction with other resource users.

6.6 Information from Councils Additional information was gathered from Councils who were contacted as part of the analysis process. This was done to build a more comprehensive picture of any potential barriers to increasing the uptake of direct use technologies. Two questions were posed to Council planning staff, with the results described below. No Recorded Response (“NR”) in the results tables below indicates that either a Council could not provide the information, or an appropriate member of staff could not be contacted to provide it.

Question One: Have resource consent applications for LEG direct use applications previously been received by the Council?

Yes (%) No (%) NR6 (%)

Regional Councils 66% 33% 0%

TAs 17% 33% 50%

Limited consents have been received by TAs for direct use technologies, which reflect the results of the analysis above with only Test Project Six requiring TA consents. Northland Regional Council reported no previous consents for LEG direct use applications, where the Waikato and Bay of Plenty Regional Councils had many.

6 No Recorded Response

Figure 15: Proportion of Councils requiring consent for Test Project Five



Question Two: What is the level of planning staff knowledge or awareness of LEG direct use technology?

Limited (%) Some (%) Good (%) NR%

Regional Councils 33% 0% 66% 0%

TAs 33% 0% 17% 50%

The responses to this question closely mirror the results for prior consents reviewed. Bay of Plenty Regional Council noted that their familiarity with large scale cascade use was not so much from direct experience, but from collaborating with colleagues from the Waikato Regional Council where this type of application is more common. Waikato Regional Council have noted that staff from both Councils have different levels of experience with these situations and combine this knowledge when considering particular resource management issues.


1. Closed loop direct use systems (downhole heat exchangers) are the most straightforward direct use application to gain resource consent for. With the generally low levels of heat extracted and with little risk of depleting groundwater or pressure within geothermal systems, these present with limited potential environmental effects. Indeed, recent changes to the Waikato Regional Plan have been designed to reduce barriers to the domestic use of such systems. No TA consents should be required. The heat available from such arrangements is much more restricted than for direct fluid takes.

2. Cluster use systems rely on an existing operator to “tap in”, requiring a change of conditions to existing consents. This has the benefit of being able to rely on information gathered on the geothermal resource by the primary operator both through the initial consenting process and through monitoring over the course of its operations. Additional environmental effects associated with cluster systems potentially relate to an increased take of heat from the geothermal system. Providing information can be used to identify that this increased take of heat will not have a significant effect on the geothermal system, consenting requirements should not be overly burdensome.

3. Establishing a new, open loop LEG project requires a comprehensive suite of consents, and a correspondingly comprehensive resource consent application and Assessment of Environmental Effects. This is somewhat ameliorated by the approach taken by both the Waikato Regional Plan and Bay of Plenty Regional Water and Land Plan, which have identified geothermal resources that are appropriate for further development. However a substantial consenting process will be required.



7. DISCUSSION

The analysis conducted is this report shows that in general, planning interactions are required for the majority of LEG installations. This planning and regulatory framework is therefore an important factor in considering ways to increase the adoption of LEG technologies in this country.

With this in mind, some key strengths, weaknesses, opportunities and threats have emerged. Table 29 provides a summary of these, with further explanation in the following text.

Table 29: Summary of SWOT analysis

Strengths

Positive legislative and environmental policy support at the national and regional levels

Generally permissive requirements for closed loop systems

Weaknesses

Low levels of familiarity with LEG technology amongst council staff

Some regional rules frameworks are not well suited to GSHP systems

Opportunities

District and regional plan reviews and strategic planning

Regional energy strategies

National Policy Statement on Renewable Energy Generation

The National Environmental Standard on Air Quality

Resolution of treaty claims

Energy efficiency is in the public eye

Clustering of industrial activity to access LEG technology

Threats

A lack of knowledge about some geothermal resources

High regulatory costs and uncertainty associated with some direct use applications

Notified consents processes and public perceptions



Strengths

Positive legislative and environmental policy support at the national and regional levels

From the 2004 amendments to Part 2 of the RMA and initiatives established under the Energy Efficiency and Conservation Act 2000, through to regional energy strategies, there is direct policy support for the increased use of LEG technologies.

Generally permissive requirements for closed loop systems

Both GSHP and direct use applications featuring closed loop systems should be more straightforward to consent. Unless any particular local circumstances exists with a given installation, the only potential environmental impacts to manage involve ensuring that bore holes (in vertical systems) are appropriately drilled and completed to prevent contamination of groundwater systems.

Weaknesses

Low levels of familiarity with LEG technology amongst council staff

Many of the Councils contacted had only limited, if any, knowledge of LEG technologies, particularly GSHPs. Understandably, the level of knowledge was generally influenced by whether or not Councils had processed consents for GSHPs in the past. This lack of knowledge and precedent could create additional challenges in the consenting process for future applications.

Some regional rules frameworks are not well suited to GSHP systems

Open loop GSHPs were often tested against regional rule frameworks designed for activities with more potential for adverse environmental effects. For example, the groundwater take component of Test Project Two bumped the bundled activity status up to discretionary, even though the take is non-consumptive and will not result in any depletion or contamination of the aquifer concerned.

Opportunities

District and regional plan reviews and strategic planning

Many Councils are undergoing plan variations, plan changes or plan review processes. This shows that the regulatory framework around the country is in a state of change and there are opportunities to participate in these processes to advocate for greater recognition of, and support for, LEG technologies.



Regional energy strategies

Three published regional energy strategies were identified; however there are others in various stages of development around the country. One example is the Bay of Plenty Regional Council, where funding has recently been provided by New Zealand Trade and Enterprise to assist with the development of their energy strategy. As a key area of geothermal activity, the Bay of Plenty energy strategy presents a significant opportunity to coordinate and advocate for greater use of LEG technology.

National Policy Statement on Renewable Electricity Generation

Gazetted in April 2011, this new national policy statement seeks to increase New Zealand’s use and development of renewable electricity. There are good opportunities for LEG technologies to take advantage of surplus heat from increased geothermal electricity generation, which can be expected to occur as a result of this new NPS.

The National Environmental Standard on Air Quality

The latest version of the National Environmental Standard for Air Quality has pushed out timeframes for regions to attain compliance with new air quality standards. These new standards are forcing new approaches to providing clean heating. While energy star rated air source heat pumps are featuring prominently in the response to achieve this, in part due to grants provided by EECA, LEG technologies could also play a role.

Resolution of treaty claims

As Treaty of Waitangi claims are resolved, there are increasing numbers of Iwi looking to move on from the claims processes to focus resources on sustainable business development opportunities that respect cultural values such as kaitiakitanga. Many Iwi have strong associations with geothermal energy, and in some cases own large tracts of land with some geothermal potential. LEG technologies may present a business and development opportunity for some Iwi.

Energy efficiency is in the public eye

Organisations such as EECA are driving energy efficiency awareness. This includes government and industry support for new organisations, such as the Clean Energy Centre in Taupo, who are driving energy innovation and development. The climate for increased uptake of LEG technology is excellent.



Clustering of Industrial Activity

The least cost theory of industrial location is a method for attempting to explain and predict where industries will locate. A simplified summary of this theory is that industries will locate where the cost of bringing products to market is the lowest, with this being determined by an analysis of transport costs, labour costs, and agglomeration benefits.

LEG technologies present an opportunity to leverage this equation. An example of this is to establish an industrial area with appropriately supportive zoning, with a reticulated steam or hot water system using LEG technology. This provides an efficient, clean and low operational cost energy option for supporting industrial processes, further maximising agglomeration benefits and effectively attracting industry to an area. There are existing and proposed examples of this arrangement occurring in New Zealand already, with some of these examples using fossil fuels to generate steam for reticulation (e.g. planned Washdyke Energy Centre in Timaru). The use of LEG technologies presents a significant low carbon advantage over fossil fuel based systems.

Threats

A lack of knowledge about some geothermal resources

Geothermal systems are complex and require extensive analysis to understand. Not all geothermal systems have been mapped or analysed to the extent that resource management decisions can be made in full knowledge of potential development effects. A precautionary approach has been taken by regional councils as a result.

High costs and uncertainty associated with some direct use applications

Direct use technologies, particularly in larger scale applications, require a full suite of resource consents. The level of information to be provided in support of these applications is extensive, particularly where knowledge of the geothermal reservoir might be assessed as low. This leads to high compliance costs, uncertainty and extended timeframes which may be prohibitive to some developments.

Notified consents processes

Larger scale installations would likely be subject to a notified consent application under the RMA. This opens up projects to public scrutiny, submission, and potential appeals. In some cases, opposition may stem from the difficulties associated with understanding complex consent applications, or from public perceptions about the potential effects of geothermal water extraction.

Low Enthalpy Geothermal Energy June, 2011 New Zealand Planning and Regulatory Assessment DRAFT


8. RECOMMENDATIONS

This report has assessed the planning and regulatory environment of New Zealand for LEG technologies. It has identified key strengths, weaknesses, opportunities and threats. Table 30 presents recommendations for improving this environment to support the increased uptake of LEG technologies.

Table 30: Recommendations for improving the uptake of LEG Technology

Goal One: A coordinated effort to champion LEG technology

Recommendation 1:

Establish roles and responsibilities of interested agencies and groups.

Description: There are a number of agencies involved in the promotion and development of energy efficient technologies, including EECA, The Ministry of Economic Development, The New Zealand Geothermal Association, GNS Science, New Zealand Clean Energy Centre, New Zealand Trade and Enterprise, industry groups, and others. A coordinated effort amongst these and other agencies and groups to champion LEG technologies should bring increased utilisation.

Goal Two: Reduce regulatory controls, costs and timeframes

Recommendation 1:

Participate in regional plan review processes.

Description: Regional councils hold the greatest regulatory responsibility for LEG technologies. Changes such as those made by the Waikato Regional Council to reduce regulatory barriers for the use of closed loop systems for domestic heating should be encouraged and supported through the public plan review process. One example that could be followed is the Canterbury Regional Plan which has rules specific to micro-hydro generation, as a unique activity that involves the damming or diversion of water. A similar approach could be considered for open loop GSHPs, which are a unique activity involving the non-consumptive take of ground or surface water.

Recommendation 2:

Participate in district plan review processes.

Description: TAs generally have limited involvement in the regulation of LEG technologies; however one of the most common residential applications (horizontal closed loop systems) is inconsistently regulated across the country. The installation of these systems can involve a large volume of earthworks, however if managed appropriately the net environmental effect is negligible as the ground is quickly returned to its pre-installation state. Rules could be re-focused to look at finished ground level, or to recognise temporary

Low Enthalpy Geothermal Energy June, 2011 New Zealand Planning and Regulatory Assessment


earth movement activities where the site is rehabilitated to its original state within a limited time period.

Recommendation 3:

Consider the usefulness of standards for GSHPs.

Description: Adoption of standards and codes of practice from overseas might assist in technology adoption. Consider if standards developed in other nations might be applicable in a New Zealand setting.

Goal Three: Enhance policy frameworks

Recommendation 1:

Participate in the development and review of national policy statements and national environmental standards that are pertinent to LEG technologies.

Description: National policy statements and national environmental standards provide a framework for increasing the recognition and support of LEG technologies at a national level. The proposed National Policy Statement on Urban design is one example that should be monitored. While it is currently on hold, should this pick up again it could provide an excellent mechanism to build energy efficiency considerations into urban design practice, and encourage and promote concepts such as LEG district heating systems.

Recommendation 2:

Encourage and participate in the development of regional energy policies.

Description: Regional energy strategies are a potentially powerful tool for setting regional energy priorities. Participating in the development or review of these strategies to enhance the role of LEG technologies could be a driving force for their increased use and uptake.

Recommendation 3:

Encourage and participate in local strategic planning.

Description: TAs have a broad spectrum of development responsibilities and many have prepared non-regulatory policy or guidance documents to encourage development recognised as desirable within the district. Examples include industrial strategies, subdivision guidelines, urban design protocols and development codes of practice. These documents are usually prepared with public input, and opportunities exist to encourage the inclusion of LEG technologies.



Goal Four: Advocate and promote LEG technologies

Recommendation 1:

Celebrate the success of existing examples of LEG projects.

Description: There are existing examples of successful applications of LEG technology in New Zealand across residential, commercial and industrial sectors. These should be celebrated, in such a way that can show case the benefits and advantages of this energy solution. This in turn will raise awareness, both amongst consumers as potential proponents of future installations, and amongst council staff as those making regulatory decisions. Options to do this include approaching the owners of existing installed systems to organise site visits for delegates of professional conferences or seminars, such as the New Zealand Planning Institutes annual conference, or the Resource Management Law Association annual conference. Case study publications could be developed showing various installations, including data associated with operating costs and efficiencies.

Recommendation 2:

Develop information to raise awareness of LEG technologies amongst council staff.

Description: As a result of limited development of LEG resources in New Zealand, in many cases council staff are not familiar with LEG technologies, particularly GSHPs. Council staff have high levels of interaction with property developers, home owners and the public at large, and through the preparation of policy and planning documents and the assessment of resource consent applications, have an ability to influence the nature and location of future development. Increasing the level of awareness and knowledge of LEG technologies amongst council staff will assist in achieving greater uptake and use. To achieve this, information in the form of booklets or pamphlets can be developed and circulated to council planning and regulatory staff. Events such as the annual New Zealand Planning Institute and Institution of Professional Engineers New Zealand conferences can a be targeted for presentations or discussions on LEG technologies.

Recommendation 3:

Maximise the use of closed loop systems.

Description: Closed loop systems of both GSHPS and direct use technologies present the least potential environmental impact, and as a result face the lowest level of environmental regulation and fewer barriers to increased adoption. With the overall goal to have more LEG technology uptake in New Zealand, closed loop systems are a good place to start. With more systems installed, awareness of the technology increases overall. Implementation of this can occur through Actions 1, 4 and 5 under Goal Four. High profile installations are a good place to start, such as schools, council and government buildings and rest homes.



Recommendation 4:

Focus the use of open loop systems.

Description: Open loop systems are the most efficient at moving heat, however will face greater regulatory constraints. Their use should be focused on appropriate applications where maximum benefit can be achieved, such as district heating or the supply of industrial precincts with reticulated geothermal energy. Implementation of this can occur through Recommendations 1, 4 and 5 under Goal Four.

Recommendation 6:

Engage with CERA to Investigate Canterbury earthquake recovery applications for LEG technologies.

Description: Following the 2010 and 2011 Canterbury earthquakes, significant reconstruction work is soon to commence. This will be coordinated by the newly established Canterbury Earthquake Recovery Agency (“CERA”). The CBD of Christchurch is one area where an opportunity exists to make use of LEG technologies on a large scale, while reconstruction works are occurring. It is also likely that entirely new suburbs will be built. Stockholm in Sweden offers an example that could be followed. Here, sea water is reticulated underneath the CBD area and, using LEG technology, is used to heat and cool entire office blocks.

Low Enthalpy Geothermal Energy June, 2011 New Zealand Planning and Regulatory Assessment DRAFT


62

9. REFERENCES

Department of Building and Housing. (2010). A guide to building work that does not require building consent: Building Act 2004 (2nd ed.).

East Harbour Management Services. (2005). Availabilities and Costs of Renewable Sources of Energy for Generating Electricity and Heat: 2005 Edition. Prepared for the Ministry of Economic Development.

EECA Energywise webpage. Retrieved March 1, 2011, from http://www.energywise.govt.nz/ratings-and-labels/energy-star

Gazo, F., & Lind, L. (2010). Low enthalpy geothermal energy – technology review. GNS Science Report 2010/20.

Rossouw, P., & Lind, L. (2010). Energy demand estimation for cooling and heating in New Zealand. GNS Science Report 2009/75.

Ministry for the Environment. (2009). Guide to reporting for geothermal fluid activities under the New Zealand Emissions Trading Scheme.

Ministry of Economic Development. (2010). Geothermal energy: summary of emerging technologies and barriers to deployment.

Thain, I., Reyes, A.G., & Hunt, T. (2006). A practical guide to exploiting low temperature geothermal resources. GNS Science Report 2006/09.

Warner, D. L., Algan, U., (1984). Thermal impact of residential ground water heat pumps. Ground Water. Vol. 22, No. 1, pages 6 – 12.

Figures Source List

Figure 1: Retrieved April 18, 2011, from http://en.wikipedia.org/wiki/Heat_pump

Figure 2: Retrieved April 18, 2011, from http://newenergydirection.com/blog/2008/10/heating-and-cooling-with-geothermal-heat-pumps/

Figure 3: Retrieved April 18, 2011, from http://www.themarlboroughgroup.com/horizontal_loop.htm

Figure 5: Gazo, F., & Lind, L. (2010). Low enthalpy geothermal energy – technology review. GNS Science Report 2010/20, page 26.

Figure 7: Retrieved April 31 May, 2011, from http://www.geotec.se/pressrum/bilder/borrhalslager_high.jpg,

Figure 9: Retrieved April 18, 2011 from http://www.antipollution.asia/web/images/UndergroundThermal1.jpg

http://www.energywise.govt.nz/ratings-and-labels/energy-star

http://www.energywise.govt.nz/ratings-and-labels/energy-star

http://en.wikipedia.org/wiki/Heat_pump

http://newenergydirection.com/blog/2008/10/heating-and-cooling-with-geothermal-heat-pumps/

http://newenergydirection.com/blog/2008/10/heating-and-cooling-with-geothermal-heat-pumps/

http://www.themarlboroughgroup.com/horizontal_loop.htm

http://www.geotec.se/pressrum/bilder/borrhalslager_high.jpg

http://www.antipollution.asia/web/images/UndergroundThermal1.jpg



63

Figure 10: Gazo, F., & Lind, L. (2010). Low enthalpy geothermal energy – technology review. GNS Science Report 2010/20, page 17.

Figure 12: Institute of Geological & Nuclear Sciences Limited (GNS), Wairakei Research Centre (May 2011).

Figure 14: U.S. Department of Energy (DOE) (March 1998). Direct Use of Geothermal Energy. DOE/GO-10098-536, page 2.