New Zealand is an energy-rich country. But we act like we're energy-poor.
We have world-leading solar, wind, hydro and geothermal resources — but we still spend over $20 billion a year buying fossil fuels. That shows up in ever-increasing power bills, idled machinery in Kiwi businesses and geopolitical risk that we just can't afford anymore.
We can do better.
Abundant Energy is a circuit breaker for an energy system that has been underfunded for decades. This package of large scale investment, market reform and community & household level electrification will deliver clean, affordable energy — keeping our homes warm and our businesses running.
What will Abundant Energy deliver?
- $500 – $2,700 in savings per year for the average family based on cheaper electricity bills and household electrification.
- 5,000 extra high-skilled jobs over the next 30 years.
- 300% more renewable electricity generation capacity (up to 30 Gigawatts by 2050).
- 0.35% more annual GDP growth (based on processing, manufacturing and transport efficiencies and new opportunities).
- Significant cuts to carbon emissions from energy and industrial processes.
- Warmer, drier homes for Kiwis.
How will Abundant Energy work?
To deliver affordable, clean energy for Kiwi families and businesses, Abundant Energy will:
- Boost renewable generation by securing cross-party agreement to add 30GW to the grid by 2050, launching a capacity investment scheme (like Australia has) to unlock capital and incentivising industries to electrify their processes.
- Make the electricity market work for Kiwis by ringfencing Government profits from power generation for investment in the renewable future, merging the four energy regulatory agencies into one and consolidating the 29 energy distributors into no more than 8.
- Electrify houses, communities and businesses by issuing low-interest loans for household electrification, funding community-run energy projects, insulating Kiwi homes and electrifying public transport systems.
Frequently Asked Questions
The operational expenditure for implementing this plan will all come from the ringfenced dividend revenue from the Government's ownership stake in the gentailers; currently around $500 million annually. This will take this funding away from core crown revenue, so represents a direct cost that will need to be funded through other revenue sources; like the land value tax. A full breakdown of estimated costs is available in the full policy document.
The main source of grid stability in our proposal comes from overbuilding renewables; having more renewable capacity available than current grid needs. This means that variable renewable sources like wind and solar can be used ahead of hydro. Leaving water in the dams provides a reserve of highly responsive generation capacity. Additional geothermal and hydro capacity will add to this.
Distributed generation and storage at household and community level does not address broader "dry year" stability issues, but builds overall grid resilience and could enable some peak shifting. Grid-scale storage further supports peak-shifting. Thermal generation at Huntly will still be available as a backup option; but it will be used in true emergency scenarios, rather than as a routine part of the generation mix.
No. Structural separation is a lengthy and costly solution, and doesn't address the core issues in the electricity sector. The fundamental problem is the perverse structural incentives that give rise to underinvestment in generation across the board. The gentailers could undoubtedly do better, but they're reasonably competitive with each other at both the retail and generation ends of the market.
No. This locks us in to long-term reliance on imported LNG. In addition to the environmental impacts, this puts us at the mercy of potentially volatile international prices.
These are great technologies and it's great they're being researched in New Zealand. We're fully in favour of continuing to support domestic research on these sorts of technologies as part of a well-supported science and innovation ecosystem. However, these are new technologies that haven't yet been applied to reliable grid-scale generation, so it wouldn't be responsible to consider them as part of a planned energy mix. However, initiatives like our capacity investment scheme allow for a range of generation technologies — so if there's a breakthrough, there's no reason we couldn't take advantage of it.
Modelling the impact of large-scale policies like these is necessarily difficult and uncertain. We have taken a conservative approach to the claims we make and based these on similar modelling by reputable bodies. Modelling can be found in the full policy document.
