National grid operator Transpower said in a statement late last month analysis it had carried out showed the electricity sector was responding to mitigate recent electricity supply challenges caused by the decline in natural gas and the transition to a more renewable electricity system.
Maui gas operator OMV announced last week it was expected to wind up production by the end of 2026.
Transpower’s draft annual security of supply assessment (Sosa) showed the accelerated delivery of new generation and battery storage systems had to continue into the 2030s to stay ahead of growing demand for electricity and mitigate risks like unplanned thermal outages.
Chief executive James Kilty said Transpower produced the annual assessment of the balance between electricity supply and demand over the decade ahead to help guide investment decisions by the electricity sector and support management of security of supply risks.
"Last year’s assessment identified emerging risks for electricity supply this winter due largely to the faster-than-expected decline in natural gas availability in recent years," Mr Kilty said.
"The draft assessment we are now consulting on indicates that the sector has taken a meaningful step toward mitigating these risks with new generation and battery storage systems coming online and efforts to secure additional gas supply.
"Immediate challenges remain around the potential for further reduced gas supply, risks around reliability of our ageing thermal generation fleet and a repeat of the prolonged dry conditions we experienced in 2024 and early 2025, but the sector is working hard to stay ahead of them."
Entering winter, storage levels in New Zealand’s hydro lakes are above average.
"Our key message is to maintain the investment momentum and ensure existing thermal generation remains available and sufficiently fuelled to respond to near-term risks."
But delivery risk was a key issue to manage over the medium term. Security of supply concerns were predicted to reappear in the early 2030s even if the existing pipeline of projects that were expected to proceed were delivered on schedule.
"This means the sector needs to lift the pace of new investment coming online over the medium term, including committing earlier to new projects, to support increased demand growth and reduce our exposure to risks like lower gas supplies or ageing plant failure," Mr Kilty said.
The assessment also placed a focus on Transpower delivering its own programme of work in support of new generation and electrifying customers.
Mr Kilty said Transpower had worked hard over the past 18 months to accelerate the connection and commissioning of new generation and batteries to the national electricity transmission grid and into local distribution networks.
The sector was on track to commission more than 1100MW of generation, batteries and capacity upgrades this year — which would be a record — as the build phase of New Zealand’s energy transition really picked up pace.
