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The Government has assured power companies in which it’s a majority shareholder that capital is available to support investment in critical electricity infrastructure.
“Reliable and affordable energy is key to New Zealand’s prosperity,” Finance Minister Nicola Willis says.
“Energy powers every part of our economy, from households to high-value industries, and will increasingly determine our ability to compete in the global economy.
“Therefore, I’ve written to the Crown’s Mixed Ownership Model (MOM) companies (Genesis, Mercury and Meridian) to say the Crown is prepared to support capital funding requests for strategic and commercially rational investments that support energy security.
“This is to ensure a perceived lack of access to Crown capital does not stand in the way of New Zealand’s energy security.
“The assurance is one of several measures the Government is taking to address the gaps in New Zealand’s energy system that are keeping prices high for consumers.”
Energy Minister Simon Watts says New Zealand is on the cusp of a renewable electricity boom.
“More new generation has been commissioned in the last 18 months than in the last 15 years because of our work to knock down regulatory barriers.
“But there is one major barrier standing in our way. We need reliable back-up options to generate electricity during our driest years, when we can’t rely on hydro lakes or wind to meet demand.
“Since the 1970s, natural gas has bridged this gap, but our declining gas supply is making this both more expensive and unreliable.
“The electricity market performance review conducted by Frontier Economics confirmed that the market has failed to invest in the back-up fuel and generation we need to keep the lights on and the economy running during dry years.
“This uncertainty is what is keeping power prices up and placing unacceptable pressure on Kiwi households, businesses and industries alike.
“When we have dry years, like what we experienced in 2024, it can take the economy up to 25 years to recover from inflated electricity prices. That’s why the Government is acting now.”
The Government’s Energy Package focuses on investing in security of supply and building better markets to improve affordability. It includes:
Launching a formal procurement process for an LNG import facility.
Incentivising industry to kick-start new energy projects by exploring how whole-of-government contracts could help underwrite projects.
Removing barriers to accelerate the delivery of renewable energy through Electrify NZ (speeding up consenting and enabling offshore renewable energy).
Developing options to reduce policy risk for investors in new energy projects, such as the $200 million set aside for co-investment in gas fields through Budget 2025.
Strengthening the Electricity Authority to make it a more powerful, decisive regulator.
Increasing the efficiency of electricity distribution businesses (EDBs) by tasking them to collaborate, standardise processes and make smarter investment decisions.
Establishing a stronger gas information framework to ensure timely, reliable, and transparent data is available to all market participants.
Developing new rules, in consultation with industry, to ensure the lack of dry year back-up supply does not re-emerge.
The Labour Party says the Government’s “long-delayed energy plan does nothing to tackle soaring power bills or support businesses struggling with crippling energy costs”.
“New Zealanders are being let down,” Labour energy spokesperson Megan Woods says.
“Today’s announcement is a weak, short-sighted response that fails to confront the reality of our broken energy system.
“Instead of delivering real solutions to lower power bills, the Government has chosen to tinker at the edges and protect the status quo.
“The coalition failed and couldn’t find a set of measures they could agree on so New Zealand households and businesses are going to be saddled with high energy prices for longer.
“[Prime Minister] Christopher Luxon promised to make the cost of living better.
“Instead, he’s making it worse – choosing to support the fossil fuel industry instead of families.
“Christopher Luxon’s gamble on gas that might not even exist shows just how out of touch he is.
“Over the past five years, $1.8 billion has been wasted on drilling 58 wells, and gas reserves are still falling.
“It’s time to he faced reality: New Zealand must shift to cleaner, cheaper energy alternatives and fast.
“There are practical steps the Government could take immediately: installing solar panels on schools, supporting households with solar and battery systems, partnering with businesses to transition to cheaper energy sources, and leveraging the Government’s own energy demand to drive investment. But none of this urgency is reflected in today’s plan.
“The Government’s plan also ignores one of the sector’s biggest challenges: storing energy for dry years and when the sun isn’t shining or the wind isn’t blowing.
“How many more businesses need to close and how many jobs need to go before National does something meaningful?”
