Resource type: Operational

NZECS Residual Supply Mix for electricity certification

The NZECS has, as one of its core objectives, the goal of increasing information and understanding around the attributes and characteristics of energy purchased and consumed in New Zealand.

To this end, we make sure that energy purchases tracked through the NZECS are not also claimed by non-participating energy users. The mechanism by which we do this is called the Residual Supply Mix, or RSM.

The RSM describes the nature of the electricity received by energy consumers who do not purchase NZ Energy Certificates directly from suppliers. It is a key part of how greenhouse gas emissions are accounted for in New Zealand.

Parties wishing to report on the emissions intensity of consumed electricity can now rely on either the RSM, or the specific information contained within NZ-ECs provided to them by their supplier. These are both market-based emissions factors, in line with requirements for dual reporting as laid out by the Greenhouse Gas Protocol.

It is important to utilise the residual emissions factor, in order to recognise the growing amount of explicit energy attribute purchase taking place in the New Zealand electricity market.

2022/23 Annual Residual Supply Mix

The annual RSM has now been calculated for the period from 1 April 2022 to 31 March 2023. This was the fourth year in which NZ Energy Certificates (NZ-ECs) were transacted in New Zealand, and the difference of RSM from the NSM continues to grow in line with growth in the number of transacted certificates. The table below compares the RSM figures between the Production Years 2019/20 – 2022/23.

Production Year 2019/20 2020/21 2021/22 2022/23
National electricity generated (MWh) 42,273,518 41,490,913 41,881,730 41,519,448
Total volume NZ-ECs transacted 51,577 228,741 734,700 1,265,475
National Supply Factor (kg co2-e/MWh) 99.16 124.00 108.83 67.50
Residual Supply Factor (kg co2-e/MWh) 99.28 124.69 110.77 69.62
Difference (%) 0.12 0.56 1.77 3.14

National Supply Mix (NSM): the total mix of electricity generation supplying New Zealand’s domestic demand.
National Supply Factor (NSF): the emissions factor of the National Supply Mix.
Residual Supply Mix (RSM): the mix of electricity generation minus volumes transacted within the NZECS.
Residual supply Factor (RSF): the emissions factor of the Residual Supply Mix.

Electricity emissions for the 2022/23 year were down significantly from previous years, primarily due to extreme rainfall conditions leading to increased hydro generation. This resulted in a National Supply Factor (NSF) of 67.50kg / MWh. This value can be used as a location-based emissions factor, as part of dual reporting requirements.

Renewable energy purchase tracking increased in popularity again in 2022/23, with the volume of certificates transacted within the NZECS Registry increasing by over 70%. This level of purchasing tracking within the NZECS increased the carbon intensity of the Residual Supply Factor (RSF) by over 3%, to 69.62kg/MWh. This value should be used as the market-based emissions factor, as part of dual reporting, and reflects the emissions associated with grid-supplied electricity.

The table below shows electricity generation by type for each of the last four Production Years.

Total electricity generation by fuel type: 2019/20 – 2022/23

Multiple sources of generation and emissions data

The NZECS provides a source of emissions information that is adjusted for all market-based claims, however we recognise the existence of other sources of similar data. Both Transpower and MBIE publish information on grid generation and emissions, and MfE provides emissions factors for grid-supplied electricity.

In 2022, BraveTrace (previously Certified Energy) performed an initial evaluation of different data sources and their variance, published below. Initial conclusions are that while there are some variances, the primary source of variance is availability of information, with behind-the-meter generation and consumption contained within MBIE data-sets.

Variance note – 2021/22 Production Year (published June 2022)

Monthly Residual Supply Mix (update)

In addition to the annual RSM calculation shown above, BraveTrace (previously Certified Energy) has trialled the development and publication of a monthly RSM throughout all the Production Years. These monthly figures have now been updated with final end of year certificate transaction volumes for months within previous production years. Monthly figures within the current production year (April 2023 – March 2024) are subject to change and will be finalised at the end of the production year.

The interactive chart below shows the RSM for each month starting from 1 April 2020. This chart will be updated in the first half of each month with the RSM data of the preceding month.

Further development of Residual Supply Mix data is planned, and feedback from stakeholders and system users is welcomed.

Click on the toolbar at the bottom right of the chart to download a full-sized workbook showing the version history.

Read a blog article on the intent behind the monthly RSM.

*Cogeneration is an energy efficient technology in which heat and electricity are by-products of the process. However, its primary functionality is not to produce electricity. Thermal generation uses heat produced by burning coal, diesel or natural gas as fuel to produce electricity. Cogeneration is a subset of thermal generation.

**Rolling 12 month average values are inclusive of the month of display.

Monthly RSM – calculation methodology

The Monthly RSM is calculated using the same basic approach as the annual RSM – building up a model of supply by adding up generation and emissions data from each of the generation facilities in New Zealand, and adjusting for the volume of certificates redeemed within that month.​

This method is highly transparent, and flexible to improve over time, as we will seek to improve individual assumptions in order to improve the accuracy of the output figures.

The calculation of the underlying national supply mix is performed by EnergyLink to our specifications, and incorporates transaction data produced and held within the NZECS Registry. For this reason, these national supply factors will vary slightly from numbers produced by the Ministry of Business, Innovation and Employment (MBIE), due to differences in underlying inputs and assumptions.

A description of the methodology taken is provided in the link below.

This document also discusses potential approaches to improving the RSM methodology.

NZECS Residual Supply Mix methodology – approach review and detail (Prepared Dec 2019, current for 2021/22 calculation)

Additionally, further information can be found within the NZECS RSM technical note.