The power station is situated within the Kawerau geothermal field, which is part of the Taupo Volcanic Zone.

Completed in July 2008 by Mighty River Power at a cost of NZ$300 million, the plant's capacity proved greater than expected.

Earlier known as the Onepu hydrotherma area, the hot springs had been used for centuries but in the 1950s the New Zealand Government with Fletcher Trust and Investment Limited began the development of the field to supply steam for the new Tasman Pulp and Paper mill.

A portion of the steam is used to generate electricity for use within the mill, however, external power stations also have been constructed.

In 2020 deconstructed (brown field in a satellite image) The Kawerau geothermal power station boosted the country's geothermal capacity by 25 percent and significantly increased local generation capacity in the Eastern Bay of Plenty.

In June 2021, the main power station suffered a mechanical failure which resulted in an outage that was expected to extend until 31 August 2021.

[5] [6] The data (as in the plot) show that the outage started on the seventh of July, and full-power operation resumed in the twentieth of August.