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About this report

For this report we used the concepts, methods, and definitions from the System of Environmental-Economic Accounting 2012 – Central Framework (SEEA Central Framework) (United Nations, 2014). SEEA is the internationally accepted approach for measuring the stocks and flows of environmental assets in physical and monetary terms, using principles consistent with the System of National Accounts (the basis for measuring economic statistics). All data in this report was checked for confidentiality.

Measuring asset value

The monetary asset value is calculated by discounting the resource rent of the environmental asset using the net present value (NPV) approach. Resource rents reflect the surplus value accruing to the user of an environmental asset calculated after all costs and normal returns are taken into account (United Nations, 2014, p152). It is the current market value after accounting for both supply and demand factors and, therefore, reflects the immediate impacts of resource use on the economy. The asset value represents the discounted future income stream from natural resources used for electricity generation, and therefore the benefits to accrue to future, as well as current, generations. The estimate is not a measure, for example, of the value of the stock of water in dams at that particular point in time. In fact, a hydro dam may be dry at the time of the balance date used, but is still valued on the basis of the expected future availability of water.

An asset account records the opening and closing stocks of, and stock changes in, an environmental asset, and can be presented in physical or monetary terms. This account is based on March years for consistency with the national accounts, and is measured in monetary units. All values are in current prices.

Results in the energy monetary stock account are best analysed with physical stock, and the monetary and physical flow accounts. An energy asset valuation can be compared with an energy physical stock account that shows the quantity of energy contained in an economic reserve, and the potential resources that might be used in the future. We aim to compile energy physical stock and flow accounts in the future.

See our environment page for more information on Stats NZ’s wider environmental statistics framework.

Electricity generation in New Zealand

In New Zealand, electricity is generated by five major companies. Three operate under a mixed-ownership model in which the government holds a majority stake; two are private-sector companies. The five companies account for 94 percent of electricity generation, with the remaining 6 percent made up of smaller companies (Ministry of Business, Innovation and Employment (MBIE), 2015). (See Electricity generation for more information about electricity generation in New Zealand.)

We used national accounts benchmarks for electricity generators (units engaged in on-selling electricity and electricity market operation are excluded) to calculate the monetary estimates in this report. The primary source for the benchmarks is the Annual Enterprise Survey (AES). AES fully covers the electricity industry, meaning all economically significant units in this industry are included.

We calculated the resource rent from electricity generation using renewable resources by applying the proportion of total net generation (in gigawatt hours) from MBIE to the national accounts data.

More than 200 generation plants supply electricity to the national grid. Some smaller-scale generation is ‘embedded’ and feeds directly into local distribution networks (MBIE, 2016). MBIE production data covers units supplying both the national grid and local networks. The Electricity Authority maintains a list of generating plants and those producing electricity from renewable sources are mapped in figure 2.

Future improvements

Energy physical stock and flow accounts can be analysed alongside energy asset valuations to show the quantity of energy in economic reserves, and how potential resources might be used in the future. Physical stock and flow accounts are an area for future development.

Estimates for the asset value of non-renewable forms of electricity generation (oil, coal, and gas) are not presented in this report. This is because we lack information on the lifespan of these assets, which we require to calculate their values. Estimates of the resource rent from non-renewables, however, are included.

This report used the Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC06) to classify industries. Energy Monetary Stock Account: 1987–2001 used the 1996 version. Due to this updated classification, low-level ANZSIC-class information from AES is available only from 2007. Depending on user need and feedback, we may be able to backcast the current ANZSIC06 estimates if sufficient demand is identified.

Figure 2
Map, Where our renewable energy comes from.

Note: Locations given are for generating stations’ network supply points. Only generating stations with typical annual gigawatt hours (GWh) greater than 10 were used.

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