Great South strategic projects general manager Stephen Canny said the region had little choice but to ensure its exports were produced using low-emission fuels or forgo high-value market opportunities.
Another 2000MW of firm generating power will be required for the region to keep up with demand and protect its export-driven economy.
Southland has New Zealand’s largest export economy per capita of any region — making up 70% of its GDP.
But more than 80% of New Zealand’s international markets now required mandatory climate-related disclosures on export products to ensure they were ethically processed using low-emission fuels.
In 2023, the New Zealand Electricity Authority said Tiwai Point smelter used 572MW or the equivalent to 20% of the North Island’s electricity, making the smelter the largest single user of electricity in the country.
Up to 70 companies had now converted to biomass boilers.
But the move towards electricity as a primary domestic heating source, coupled with electric transport and battery-powered technology has placed an unprecedented demand on electricity across the nation.
While wind generation provided an intermittent supply, New Zealand industries needed a secure, "firm" (consistent) energy source for its future.
Hydro generation was a highly reliable firm source and made up 57% of all generation, he said.
Mr Canny’s comments came after Kākāriki Renewables announced last week it had plans to develop a 48-turbine wind farm with a 346MW capacity on a 2900ha forestry block 50km north of Invercargill.
"Our region (and southern New Zealand) is extremely well endowed with natural renewable energy opportunities."
But he said if the nation wanted to retain a strong, reliable export economy, it was important to attract new energy investment, as power outages were not an acceptable alternative.
"That means we’ve got to be progressively making change to ensure that we’re doing the very best in terms of low emissions processing."
Since Great South had modelled all potential Southland wind and solar sites, several energy providers were now developing potential regional investments.
It was important Great South provided assistance to aid interested parties, but also ensure any provided help was "without prejudice to any party" as it was up to each business to evaluate the opportunity for themselves, he said.
Kākāriki Renewables executive chair Simon Currie said the company planned to develop turbine sites within the Avondale forest which would have the ability to supply up to 160,000 homes.
He accepted while wind energy was sporadic, it complemented and lowered the demand on the region’s hydro supply.
"We’re very confident that there was sufficient capacity for a wind farm of our size to inject into the existing grids and then send that [supply] north.
"What we want to do is that effectively all of these wind farms feed into the Transpower system and then working with Powernet, we support Edendale, Tiwai, Alliance, the other milk producers."
But Mr Canny said industrial energy needed to be "firmed" energy, rather than intermittent energy supplied through wind or solar generation.
"You can’t guarantee that because you’ve got a 400MW wind farm that you’re going to get 400MW all the time.
"If you get it 40% of the time you’re doing quite well."
New Zealand traditionally supplied firmed energy from hydro production.
"Inevitably, we would see the need for further investment in run-of-river hydro as being a very important part of our energy landscape ... here, because it’s highly reliable."
Transpower grid development executive general manager Matt Webb said nationally new electricity generation and battery energy storage systems were continually growing.
He was confident there would be enough power generated for growing communities and industrial users.
"Getting all this new generation built and connected to the system is a challenge for the industry for all of New Zealand."
But Transpower had established processes for developers who wanted to connect to the national grid.
"We have a critical role and are working at pace to speed up our connection and commissioning work as the sector moves planned projects through the financing, consenting, design build and commissioning phases," Mr Webb said.
The Southland District Council said Kākāriki Renewables had yet to lodged any resource consents.
