Manufacturing Matters- Tuesday Top-Up 36

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Recent key developments in MAKE│NZ

You’ve heard a lot from us when it comes to promoting our conference

-speaking of it’s only EIGHT DAYS AWAY-

well now we’re coming to you with an offer. We’ve got some sponsored tickets, thanks to the Canterbury Manufacturers Trust, that we want to share with you!
In order to go in the draw for a sponsored ticket you’ll need to purchase at least one ticket between now and 4pm Friday 23^rd of May.

If you’ve already bought your tickets and have someone else in mind that you’d like to attend, let us know and we’ll add you to the draw. The winders will be chosen at random from a lucky dip.
At 5pm on the 23^rd we’ll be contact the winners, so make sure to have your email service provider at the ready!

Recent key developments in New Zealand

• We had some attempts at myth-busting in the past. Here’s another one: Most of the energy we use in New Zealand comes from renewable sources – right? Well …
Most of the time, when we talk about energy, we talk about electricity. And then the claim is correct – most of our electricity by far is generated from renewable sources:

Are we justified in restricting the analysis to electricity when we talk about New Zealand’s ‘green credentials’? After all, it is the predominant source of energy in our lives – at work, and at home. Or is it?
A more thorough analysis needs to start with the differentiation between Primary Energy, and Secondary Energy. The energy we use to run machines, create process heat or the heat in our homes, or transport people and goods, is pretty much all secondary – with the exception, arguably, of things like rooftop solar water heaters.
Primary Energy is the energy directly obtained from natural sources, like fossil fuels (coal, oil, natural gas) and renewable sources (solar, wind, hydro, geothermal, etc.). And when we talk about carbon emissions, or the global competition for energy resources, we are talking about primary energy.

Between the two sits the conversion efficiency. When we generate electricity from different forms of primary energy, for example, we get a wide range of efficiencies:

For transport, the best way to look at it is energy consumed per passenger or ton of freight per distance

With that in mind, what are new Zealand’s main sources of primary energy? Here is a look at our Primary Energy balances:

Thus, when we look at the overall picture, less than half of all the energy we use comes from renewable sources. If we break the latter down by source, we get this:

There is an obvious anomaly here: the large share of geothermal in the renewables share of primary energy, and, therefore, in our total primary energy mix. In fact, at 206.2 Petajoules, geothermal accounted for 25.7% of the total of primary energy in New Zealand in 2023. We’ll come back to that below when we talk about electricity generation.

• Moving from source to use (consumption):

Non-energy use includes the conversion of gas to methanol and urea, for example, and oil to bitumen and lubricants. What MBIE calls Consumer Energy makes up well over half of all consumption. It is the energy we use in all forms, except for electricity, which is accounted for separately. Coming back to the ‘geothermal anomaly’: Arguably, the share of electricity generation in the above is artificially inflated by the high share of geothermal primary energy which – due to its low efficiency – contributes disproportionally little to electricity generation (see also the first graph above, Figure 4).

Breaking down of what MBIE calls Consumer Energy:

You will note that Transport is taking the biggest share of consumer primary energy. That has a lot to do with the low conversion efficiency especially for cars. In fact, it is the only category that has shown significant increases over the past 30 years. Primary, Commercial and Residential have all been more of less stable, Industry has reduced its share of the total.

Further breaking down of Industrial use of primary energy:

There is a really important point to note here. In 2023, Mechanical, Electrical and Transportation Equipment manufacturing in New Zealand used 0.79 Petajoules [PJ] of primary energy – out of a total of 802 Petajoules. That is less than 0.01%.

Of course, we’ll need to add to that the use of electricity in manufacturing. If we look at MBIE’s electricity use statistics, the manufacturing of elaborately transformed goods like machinery and equipment, and many other higher-value products, are all combined into Other Minor Sectors because of their low share. In 2023, that category used 4.5% (6.41 PJ) of all electricity consumed. In the same year, manufacturing in these Other Minor Sectors category contributed 11.2% of New Zealand’s total GDP.

If we ever were to get a government that is willing and able to adopt an economic development strategy that goes beyond “more of the same” to “more from (with) less” … We’ve talked about energy intensity in the past, and we’ll do so again – but another time.

Recent key developments in the World

•Attracting more young people into manufacturing? Data analytics company Trendence does an annual survey of career preferences among German senior school students. Last year the survey involved 13,800 students at different educational levels, with a median age of 18. The results? Top three career choices were Trade (wholesale and retail; 35.6%), Automotive Industries (27.7%), and Public Sector (24.2%). That is remarkable in two ways: almost 85% of choices fall into just three sectors, and automotive is popular in spite of a lot of talk in Germany about the car industry being in a deep crisis. Top four employers were Porsche, BMW Group and Mercedes Benz Group, followed by the Police. Top five criteria used to make these choices: salary, job security, work-life balance, a meaningful job and social cohesion at work (a good ‘work climate’). Again, ‘Porsche’ and ‘job security’ don’t combine that well at the moment, but the surveys were conducted between April and October last year.

Among other things, that raises and interesting question: How influential is the size of, and the role played by, a given sector in a nation’s economy, when young people make career choices? Or, to be precise, the perception of that size /role. There is no doubt that the wider automotive industry plays a big part in Germany’s economy (6% of GDP; 17% of exports), and the perception of that role is probably even bigger.

Internationally, there is evidence for a ‘perception gap’:

• Young people form impressions about careers through cultural narratives rather than economic data
• Status perceptions of industries (like finance in the UK or tech in the US) create powerful attraction regardless of actual employment numbers
• Media portrayals shape which careers seem exciting, stable, or meaningful
• Industries perceived as “rising” attract talent even when employment growth is modest.

Given the widely published reports in German media recently about current problems and a rather bleak outlook for the German car industry, it’ll be interesting to see the results next year from the 2025 surveys that have just kicked off.