Rising Demand of Renewable Energy in New Zealand Power Market Outlook: Ken Research


Energy is an essential ingredient for the economic and social prosperity of any country. Energy consumption highlights the economic prosperity or the healthy functioning of any country. The energy markets and policy frameworks have witnessed immense changes in New Zealand in the past decade. New Zealand energy market is a perfect example of an effective ecosystem. New Zealand has ample amount of energy resources to meet its need and notably, it is bestowed with many renewable energy resources. New Zealand has one the highest production capability of geothermal energy and has huge hydro power potential. In recent years market has been able to ensure supply stability thereby ensuring that no unexpected price hikes take place. The leading players in energy segment are Meridian Energy Ltd, Genesis Energy Ltd, Contact Energy Ltd, Mercury NZ Ltd, Infratil Ltd

According to the study, ‘New Zealand Power Market Outlook to 2030, Update 2018 – Market Trends, Regulations, and Competitive Landscape’, Although New Zealand has both ample renewable and non renewable resources, it imports some of its energy requirements from other country in order to meets in domestic demand. The country actively exports fossil fuels which improves the overall revenue of the government. However due to the requirement of importing, New Zealand is rendered dependent on factors and forces that are outside its control.

Coal Production has witnessed a falling trend since the past 5 years at in 2016; it was reported to be at an all time low. The total coal production in the country fell as compared to last year because of fall in production destined in Northern Islands and international markets. The falling coal production in the northern region can be attributed to lower demand for electricity generate via coal. The production in the western region is primarily used for export purposes however due to falling international coal prices; the production in this region also saw a decline. The coal generation in other parts of the country rose but was not high enough to lift the overall market volume.

New Zealand’s oil and gas production dates back to the 1950s. The modern industry in New Zealand is built on new age technological infrastructure and competitive global oil and gas regime. New Zealand saw a huge production in its oil and gas in the late 20th century and between 2005 -2020, however this rising trend saw a downturn post 2010. In 2016, the oil production fell which can be attributed to 2 month shutdown of Maari field after a crack was discovered in well head platform. Oil exports also fell however; Imports witnessed a rise due to increased demand for diesel. The domestic transportation industry is the largest consumer of oil and gas.

Renewable energy sources in New Zealand include hydro, wind, geothermal, solar, woody biomass, biomass and liquid bio fuel. Overall rising trend was recorded in renewable energy production. High electricity production in 2016 from hydro was a key driver for causing this increase. In the recent years, a substantial portion of electricity generation is by renewable energy resources. Wood biomass has also emerged with a huge share in overall energy production via renewable sources.

Due to favorable climatic conditions, the over demand and supply of electricity fell slightly in 2016. The Electricity market is regulated by the Electricity Industry Participation code which is administered by Electric Authority. Electric Authority was set up in 2010 to replace Electricity Commission.

The trends reveal that New Zealand is one of the few countries that are actually shifting towards renewable energy resources due to various environmental hazards associated with non renewable sources. The future for renewable energy can be characterized by high growth rate whereas uncertainty still looms over sources that are nonrenewable in nature.

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Ankur Gupta, Head Marketing & Communications