The New Zealand Government’s new Energy Package sets out a broad reset of New Zealand’s electricity and gas settings, aiming to lift security of supply, accelerate renewables, and strengthen market regulation while preserving a market‑based model. This is split into two major work streams, one being investment in energy security, and the other being building stronger markets.
Need to know:
- The reforms are structured around two major workstreams: Investment in energy security and building stronger markets.
- A new framework will support firm generation, long-duration storage, and enhanced transparency across gas and electricity markets.
- Legislative and consultation processes will run through 2025–2026, with key updates due in December 2025 and mid-2026.
Workstream one: investment in energy security
Strategic direction
The package prioritises reliable, affordable energy and signals a pro‑investment stance unlocking capital, reducing sovereign risk, and building long‑duration firming to back a faster build‑out of renewables.
Security of supply and dry‑year management
A new framework will incentivise firm generation and long‑duration storage to address dry‑year and sustained low‑wind risks. The Electricity Authority (EA) will also consult on non‑discrimination rules to ensure gentailers offer hedges to independents on equivalent terms to their retail arms, with enhanced coordination with Transpower on risk monitoring.
Distribution efficiency
While rejecting forced consolidation of electricity distribution businesses (EDBs), the Government expects stronger coordination, standardised practices, and forward‑looking investment plans, with reporting to the Ministry of Business, Innovation, and Employment and the EA and the possibility of Electricity Industry Participation Code (Code) based measures if progress stalls.
Expanded EDB role in generation
The cap on EDB‑owned generation connected to their own networks will rise from 50 MW to 250 MW, and limits on grid‑connected generation will be removed, supporting network resilience and efficient delivery of core services.
Gas market transparency
A strengthened gas information regime will shorten reporting timeframes for reserves and production, require an annual supply–demand study by the Gas Industry Company, and introduce new disclosure obligations from 2026 to improve system planning across gas and electricity.
Mobilising Government‑backed investment
Mixed ownership model companies (Mercury, Meridian, Genesis) have been assured of Government openness to participating in equity raisings, easing perceived capital constraints and enabling acceleration of commercially robust generation and firming projects.
Exploring liquified natural gas (LNG) imports
The Government has opened a registration of interest to test market appetite for an LNG import facility to support firming. Further decisions are expected in December 2025, noting viability will hinge on offtake commitments and global supply dynamics.
Government as anchor customer
An all‑of‑government request for information seeks ways to use Crown demand and long‑term power purchase agreements to underwrite new projects while safeguarding competitive neutrality and project efficiency; an update is due in December 2025.
Accelerating renewables and connections
The target is to double renewable energy by 2050 through fast‑track consents, streamlined grid‑connection processes, and offshore wind legislation in early 2026, aligning consenting with the pace of investment.
Workstream Two: Building Stronger Markets
A more powerful regulator
The EA will receive a materially stronger mandate to ensure competition, reliability, and compliance. Legislation expected in Q2 2026 will bolster its ability to monitor conduct and intervene where necessary.
De‑risking markets and lifting transparency
To reduce sovereign risk and crowd in private capital, the Government will consider indemnities, co‑investment, public private partnerships, and tailored procurement. Additional measures will improve hedge market liquidity and transparency, thermal fuel disclosure and participant stress testing.
Engagement timeline consultations
These begin in late 2025 on dry‑year settings, market monitoring, and non‑discrimination rules. The Gas Industry Company will publish a new supply–demand study by the end of 2025. Early 2026 will see consultation on reliability measures and new information requirements, with the EA‑strengthening legislation introduced in Q2 2026.
Next steps for stakeholders
Stakeholders should prepare to:
- Engage in consultations on dry-year incentives, hedge market conduct and distribution efficiency.
- Participate in the LNG import and anchor-customer processes before December 2025.
- Prepare for enhanced disclosure obligations from 2026 and the Electricity Authority reform bill in mid-2026.
For more information, please contact Corin Maberly.
