New Zealand’s grid operator finds emerging energy gap in early 2030s

<p class="p1"><span class="s1">Transpower's latest assessment of New Zealand's balance between electricity supply and demand suggests an energy gap could emerge in the early 2030s, even if all committed and likely investments are delivered without delay.</span></p><p><a href="https://www.pv-magazine.com/region/new-zealand/" rel="noopener" target="_blank"><span style="font-weight: 400;">New Zealand</span></a><span style="font-weight: 400;">’s state-owned grid operator Transpower has said delivery of new generation and battery storage systems must continue into the 2030s to stay ahead of growing demand for electricity.</span></p>
<p><span style="font-weight: 400;">The company’s </span><a href="https://static.transpower.co.nz/public/bulk-upload/documents/2026%20SOSA%20-%20Draft%20Report.pdf?VersionId=cmUJGFenPEt._MANxTJ8VtT5xv9ZoDDx" rel="noopener" target="_blank"><span style="font-weight: 400;">Draft Security of Supply Assessment</span></a><span style="font-weight: 400;"> (SOSA) 2026, published earlier this week for electricity sector consultation, provides a ten year view of the balance between supply and demand in New Zealand’s electricity system.</span></p>
<p><span style="font-weight: 400;">Short-term findings covering 2026-2028 says New Zealand, with its electricity mix dominated by hydro and geothermal energy, has an efficient level of national energy to get through dry winters but adds that the finding is “fragile” if new generation projects are delayed, demand growth is faster, gas supply is lower, or solar and wind output is weaker than assumed.</span></p>
<p><span style="font-weight: 400;">Supply resources are likely to be able to meet the country’s south island winter energy needs, the short-term findings add, while also signalling there is enough supply side capacity to meet forecasted winter peak demand on the north island.</span></p>
<p><span style="font-weight: 400;">Security of supply concerns begin to appear in the mid-term findings, covering 2029-2031, which says that there is an emerging energy gap even if all committed and likely investments are delivered without delay.</span></p>
<p><span style="font-weight: 400;">Transpower Chief Executive James Kilty said this finding means the sector needs to &#8220;lift the pace of new investment coming online over the medium-term.&#8221; &#8220;</span><span style="font-weight: 400;">[This includes] committing earlier to new projects, to support increased demand growth and reduce our exposure to risks like lower gas supplies or ageing plant failure,&#8221; he said.</span></p>
<p><span style="font-weight: 400;">Longer term findings state that if the supply pipeline is delivered, margins remain above the relevant standards by the end of the assessment period in 2035. “While the forward supply pipeline, particularly in the longer-term, indicates healthy margin potential, there is a risk if some of these future generation projects do not get built or are delayed,” the report says.</span></p>
<p><span style="font-weight: 400;">It also adds that solar generation projects make up a large proportion of the forward supply pipeline in terms of installed capacity, and warns there is a risk that too much solar generation </span><span style="font-weight: 400;">during daylight hours can collapse spot prices, resulting in lower revenues for future solar projects and affecting their viability. </span></p>
<p><span style="font-weight: 400;">Kilty added that after last year’s assessment identified emerging risks </span><span style="font-weight: 400;">for electricity supply this winter, due largely to the faster than expected decline in natural gas availability in recent years, 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.”</span></p>
<p><span style="font-weight: 400;">Transpower is inviting feedback on its new draft SOSA, ahead of the publication of a finalized version by June 30.</span></p>
<p><span style="font-weight: 400;">New Zealand added 258 MW of solar last year, figures published by the International Renewable Energy Agency (IRENA) suggest. The country’s cumulative solar capacity increased from 578 MW by the end of 2024 to 836 MW by the end of 2025.</span></p>
<p><span style="font-weight: 400;">Last month, the country’s electricity authority introduced a </span><a href="https://www.pv-magazine.com/2026/04/09/new-zealand-sets-10-kw-default-export-limit-for-rooftop-solar/" rel="noopener" target="_blank"><span style="font-weight: 400;">10 kW default export limit</span></a><span style="font-weight: 400;"> for residential solar and battery systems in order to standardize grid access and support a higher penetration of distributed energy.</span></p>