New Zealand’s high electricity prices are the result of years of policy uncertainty and a lack of long-term planning, according to Infrastructure New Zealand, which is calling for urgent action to unlock investment and strengthen the country’s energy future.
The warning follows the release of a new report by the New Zealand Infrastructure Commission, Shifting Currents: Energy Infrastructure in Transition, which found electricity prices have remained persistently elevated since 2019 amid declining gas supplies, the retirement of thermal generation assets and increasing volatility in the energy market.
Infrastructure New Zealand says the report confirms concerns that have been raised by industry for several years, arguing that investment capital and energy projects are available, but a lack of policy certainty has slowed development and weakened investor confidence.
The organisation says New Zealand should be benefiting from its abundant renewable energy resources, yet households and businesses continue to face rising energy costs and ongoing price instability. It argues affordable and reliable energy is essential not only for keeping the lights on, but also for attracting investment, growing industry and improving living standards.
Infrastructure New Zealand has also criticised the Government’s decision to abandon work on a national energy strategy, saying the absence of a long-term plan has contributed to uncertainty across the sector at a time when energy development should be accelerating.
The organisation points to Treasury projections that New Zealand could face up to $5 billion in offshore carbon credit purchases to meet its Paris Agreement obligations, arguing that money could instead be invested domestically in infrastructure, lower energy costs and new economic opportunities.
While approximately 90 percent of New Zealand’s electricity generation comes from renewable sources, the wider energy system remains only around 30 percent renewable. Infrastructure New Zealand says this presents a significant opportunity to accelerate electrification across transport, freight and industry.
According to the organisation, greater electrification would improve productivity, strengthen energy security, reduce emissions and create the demand needed to support new generation projects and upgrades to the national grid.
Infrastructure New Zealand is calling for energy to be recognised as a critical driver of economic growth, backed by a long-term national energy plan, earlier investment in transmission infrastructure and stronger alignment between energy, transport and industrial policy. Further details are expected to be outlined in the organisation’s Election Manifesto due for release next month.
