Our role in the energy transition

New Zealand has a commitment to achieve net zero emissions by 2050, with the Government targeting 100 percent renewable electricity generation by 2030.

The Electricity Authority’s purpose and strategic ambition is to enhance New Zealander’s lives and prosperity through electricity and to facilitate the transformation and enhancement of our power system to low emissions energy. Our job is to support generators, retailers, distributors, and the system operator to keep the lights on now and into the future.

The changes required and the speed at which these changes must be implemented is unprecedented in the industry. We are working in partnership with the wider electricity sector to navigate and direct a pathway through the challenging transition to come. We are focused on making sure that New Zealand can make the transition without compromising our future security and reliability.


Lighting the way

No one can say what the future holds, however we know that the transformation will be spearheaded by decarbonization across the power system and the wider economy. A move to decentralized resources and an increased use of smart technology will also be a key focus of the transformation.

Decarbonising the electricity sector involves drastically reducing our use of fossil fuels whilst increasing our use of electrification of transportation and process heat. Distributed Energy Resources, solar photovoltaics, smart appliances, and Energy Storage Systems will see widespread adoption in homes and workplaces as part of this. This will result in a rise in the level of digitization and an increase in the volume of digital tools required to manage energy resources and resulting system complexity.

External factors such as climate change will have an impact on our transition. The increased occurrence of extreme weather events will test the electricity system’s resilience, and increased risk from cyber-attacks will challenge the system’s operational security and integrity.

The Electricity Authority has a critical role to play in the transition, by ensuring a fine balance between supply and demand whilst providing a robust regulatory framework to ensure the right investment occurs at the right time, in the right places in our system.


Working for consumers

In line with our statutory objectives, we want to empower consumers to be the heart of our industry. With the demand for electricity forecast to increase by 50 percent by 2030, we want to lay solid foundations for consumers to take charge and reap the benefits of new and emerging technologies in the electricity sector. By enabling innovation and investment to flourish, we can ensure that the settings we implement across the system are fit for the future.


Our transition roadmap  

Across the Authority, we are working hard to understand the required evolution of the rules and regulations that enable the efficient operation of the electricity market, in the face of the challenges to our transition. Our aim is to maximize the benefits to New Zealand consumers, leading to lower electricity prices and a secure and resilient electricity system for generations to come.


The wholesale market and generation investment

In the years ahead, we are transitioning away from low investment, high operating cost fossil fueled thermal generation, towards high investment, low operating cost renewable generation. The wholesale market is a key component in the balance of real-time supply and demand, both day to day, and year to year. Participants can make trade-offs between different kinds of generation in a dynamic fashion. A key workstream for us is to understand exactly how the wholesale market will function with 100 percent renewable generation(external link) and what changes may be necessary for this to operate at its optimum level.


Security and resilience

The Authority is leading work to tackle the critical issues impacting future security and resilience during the challenging transition to low-emissions energy(external link). Whilst no-one can predict the evolution of the power system, there are many differing views across the sector. We will produce a draft action plan in the first half of 2022.


Involving consumers in the system

Increasing investment in distributed energy resources will lead to an increase in consumer integration with the power system. We want to empower consumers to benefit from new and emerging technologies in distributed energy by focusing on enabling healthy investment and increased innovation to ensure that distribution networks are fit for the future and supportive of competition. This will ultimately lead to more choice, lower electricity prices, and better value for consumers in the long term.


Efficient network investment and operation

We are committed to facilitating investment in renewable generation, by promoting stable investment environment to create the optimum settings for the upcoming transformation

Simply building generation to meet demand is only one part of the picture. In the future, its likely that network infrastructure will need to dynamically transport electricity where it needs to go and consequently in different directions to the past.


Efficient transmission and distribution

Distribution pricing(external link) makes up approximately 20 percent of the average consumers’ electricity bill, therefore efficient distribution pricing plays a crucial role in reducing network upgrade and expansion costs. Ensuring that distributors consider network alternatives is also forefront of our distribution work, to keep power bills down.