Electricity sector in New Zealand

The strategy of electrification is being pursued to enhance the penetration of renewable energy sources and to reduce greenhouse gas (GHG) emissions across all sectors of the economy.

Rural areas were particular beneficiaries of subsidies for electrical grid systems, where supply was provided to create demand, with the intention of modernising the countryside.

In fact, the "load building" programmes were so successful that shortages started to occur from 1936 on, though a large number of new power stations built in the 1950s enabled supply to catch up again.

New Zealand's electrical energy generation, previously state-owned as in most countries, was corporatised, deregulated and partly sold off over the last two decades of the twentieth century, following a model typical in the Western world.

The Electricity Industry Reform Act 1998 required the separation of ownership between lines and energy businesses (either generation or supply).

[30] The Government responded by calling it "economic vandalism", comparing it to the Soviet Union,[31] but Greens co-leader Russel Norman said it would boost the economy and create jobs.

This is further supported by the Emissions Reduction Plan, which aims for 50% of the country's total final energy consumption (TFEC) to be sourced from renewables by 2035, encouraging widespread electrification across various sectors.

In response, the government launched the NZD 70 million Green Investment Finance (GIDI) Fund to facilitate the transition from coal and gas to cleaner electricity and biomass for major energy users.

This initiative, designed to reduce emissions, recognizes it will both improve energy efficiency and lead to higher electricity demand.

The highest-priced bid offered by a generator required to meet demand for a given half-hour sets the spot price for that trading period.

It has a maximum generating capacity of 730 MW and produces 4800 GW⋅h annually, mainly for the Tiwai Point aluminium smelter near Invercargill.

Towns including Mangakino, Tūrangi, Twizel and Otematata were originally founded for workers constructing hydroelectric schemes, and their families.

[40] No major new hydroelectric projects have been committed as of December 2011, but there are proposals for further developments on the Waitaki and Clutha Rivers, and on the West Coast of the South Island.

The country is in the path of the Roaring Forties, strong and constant westerly winds, and the funneling effect of Cook Strait and the Manawatū Gorge increase the resource's potential.

Smaller gas- and coal-fired industrial generators are found across New Zealand and especially in Auckland, Waikato, Bay of Plenty, and Taranaki.

The interwar years saw the first major construction of a national network of 110 kV lines connecting towns and cities to hydroelectric schemes.

These stations include Otahuhu and Penrose in Auckland, Whakamaru, Wairakei and Bunnythorpe in the central North Island, Haywards in Wellington, Islington and Bromley in Christchurch, and Twizel and Benmore in the Waitaki Valley.

In a news release in January 2012, the Commerce Commission reported that Transpower was planning to invest $5 billion over the next 10 years in upgrades of critical infrastructure.

In 2014, a new 220 kV cable was commissioned between Pakuranga and Albany (via Penrose, Hobson Street and Wairau Road), forming a second high-voltage route between northern and southern Auckland.

The link connects the South Island converter station at the Benmore Dam in southern Canterbury with the North Island converter station at Haywards substation in the Hutt Valley via 572 kilometres (355 mi) of overhead bipolar HVDC lines and 40-kilometre (25 mi) submarine cables across Cook Strait.

Large industrial companies, such as New Zealand Steel at Glenbrook, the Tasman Pulp and Paper Mill at Kawerau, the Tiwai Point Aluminium Smelter near Bluff, and KiwiRail for its 25 kV AC electrification in Auckland and the central North Island, draw directly from Transpower substations and not the local lines companies' local grids.

[60] In most areas, the local lines company operates a subtransmission network, connecting the transmission grid exit point to zone substations.

Single- or two-phase distribution utilising only two phases or single wire earth return systems are used in outlying and remote rural areas with light loads.

[62] The Commerce Commission publishes analysis of the information disclosures to assist industry analysts and members of the public to understand and compare the performance of EDBs.

In March 2020, Aurora Energy was fined nearly $5 million after four consecutive years where it failed to meet the required quality standards, largely resulting from historic under-investment in network renewal and maintenance.

[5] New Zealand's largest single electricity user is the Tiwai Point Aluminium Smelter in Southland, which can demand up to 640 megawatts of power, and annually consumes around 5400 GW⋅h.

[78] Wellington, Christchurch, Hamilton and Dunedin are also major consumers, with other large demand centres including Whangarei-Marsden Point, Tauranga, New Plymouth, Napier-Hastings, Palmerston North, Nelson, Ashburton, Timaru-Temuka, and Invercargill.

In an update report in 2013, the PCE stated:[88]The New Zealand roll-out of electronic meters is unusual internationally, in that it has largely been left to the market.

[5] As part of their information disclosure regulations, Transpower and all 29 EDBs are required to report the duration, frequency, and causes of power outages.

An example is the ranger / research station on Little Barrier Island, where twenty 175 watt photovoltaic panels provide the mainstay for local needs, with a diesel generator for backup.