We’ve looked closely at the energy sector in New Zealand. This State of Play describes the current state of the sector, the issues it faces as well as those it needs to prepare for.

The report is based on our own research, a survey of infrastructure owners as well as conversations with people within the sector.

Read the State of Play

Key findings 

Sector background 

New Zealand’s energy sector compares well with other OECD countries when it comes to price, access, and the balance of these against security and sustainability. It is also in a strong position relative to other infrastructure sectors. 

Compared to other infrastructure sectors the regulatory and policy environment is complex. This is due to the environmental and safety impacts of extracting and transporting energy, as well as the complex regulatory arrangements that cover shared infrastructure – in particular gas and electricity.

There are a range of ownership structures across the sector. Both private and public capital play an important part in providing New Zealanders with services.

What services this sector provides New Zealanders

Energy infrastructure, whether for the extraction/ transport of fuels or generation and transmission of electricity, is vital to New Zealanders' wellbeing. Energy allows us to move people and goods, power businesses, and heat our homes. Our national infrastructure system, such as transport, telecommunications, and social infrastructure like schools and hospitals, relies on the resilience of the energy sector.

The importance of energy to our wellbeing, means that affordability and resilience are key concerns. Both need to be maintained as the sector works to become environmentally sustainable – a balance that is sometimes described as the ‘energy trilemma’.  

What are the key issues for the sector 

The sector is at the edge of a major transition in shifting to carbon-neutral energy sources – it’s important the settings are correct for this to occur in a way that ensures the long-term wellbeing of New Zealanders. 

New technology is creating opportunities to use existing infrastructure more efficiently. This includes technology for power storage and managing demand, as well as distributed energy resources which use smaller power generation or storage devices based closer to the areas they serve.  

The role of electricity and other renewable energy sources will be important in decarbonising the transport sector and achieving our climate goals. 

How well does it deliver 

There have been price concerns across both energy and fuels, but broadly New Zealand’s energy prices rank well compared to other countries.

The sector has generally managed resilience by having multiple production/generation sites and distribution or transport methods. While electricity supply has been stable in recent years, there are remaining concerns over dry year risk management as the sector transitions.

What does the future hold 

The energy sector will be crucial in addressing the threat of climate change through the decarbonisation of transport and our economy. Meeting our climate goals will likely mean significantly growing our current electricity generation capacity by 2050, primarily from wind and other renewable sources. However, this transition will also bring challenges in areas like price, reliability, and resilience.  

Let us know what you think 

Our strategy work has the potential to shape New Zealand for decades to come, and it's important to us that everyone has the chance to have their say. Tell us what you think about our snapshot.  

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