New Zealand Power Market Size and Trends by Installed Capacity, Generation, Transmission, Distribution, and Technology, Regulations, Key Players and Forecast, 2021-2030
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This report discusses the power market structure of New Zealand and provides historical and forecast numbers for capacity, generation, and consumption up to 2030. Detailed analysis of the country’s power market regulatory structure, competitive landscape, and a list of major power plants are provided. The report also gives a snapshot of the power sector in the country on broad parameters of macroeconomics, supply security, generation infrastructure, transmission and distribution infrastructure, electricity import and export scenario, degree of competition, regulatory scenario, and future potential. An analysis of the deals in the country’s power sector is also included in the report.
New Zealand power market overview
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Hydropower to continue its dominance in New Zealand’s annual power generation till 2030
Hydropower generation accounted for a share of more than 55% in total annual generation in 2020. Although this share is expected to decline by 2030, it will still hold a dominant share in New Zealand’s generation mix. Hydropower is the major source of power generation in New Zealand. Majority of the hydropower plants are in the South Island of the country. Electricity generated from hydropower sources in the South Island is then transported to the North Island through high voltage transmission lines. The country has already expanded its large conventional hydro capacity and future capacity additions will be limited to small hydro plants. Majority of the hydropower plants in New Zealand are run of the river schemes which can storage electricity only for a few hours or days after generation. To enable the storage of this generated electricity, in July 2020, the government earmarked $30 million for the research and development of pumped hydro storage in the country.
How is New Zealand’s power market structured?
New Zealand’s energy policies are coordinated by three major bodies: Ministry of Business, Innovation and Employment (formerly known as the Ministry of Economic Development), the Electricity Authority, and the Commerce Commission. The Ministry of Business, Innovation and Employment is responsible for formulating and developing policies for the electricity sector, especially pertaining to the regulatory framework and governance. It also regulates the electricity tariffs and oversees the overall performance of the electricity market, with special emphasis on competition issues. The Commerce Act 1986, amended in 2001, gives the Commerce Commission responsibility for the regulation of transmission and distribution companies. In 2010, the government enacted the Electricity Industry Act, according to which the Electricity Authority was established, replacing the Electricity Commission. The Electricity Authority is responsible for promoting competition and ensuring the reliable supply of electricity to consumers. It also governs the electricity market under the provisions of the Electricity Industry Participation Code 2010.
Who are the key players in New Zealand’s power market?
The power generation segment in New Zealand is dominated by Meridian Energy Ltd, Contact Energy Ltd, Genesis Energy Ltd, and Mercury NZ. Many of these utilities also provide electricity retail services. The power transmission segment is operated by the state-owned Transpower. There are two types of distribution networks in New Zealand: local networks that are directly connected to the grid, and secondary networks that are connected to the grid through the local networks. Alpine Energy, Aurora Energy, and Buller Electricity are the major electricity distribution companies in the country.
New Zealand power market, by key players
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Where are the opportunities in New Zealand’s power market?
New Zealand power sector offers numerous opportunities for investors. These include further development of technologies such as green hydrogen and solar PV. Green hydrogen has been identified as a major opportunity in New Zealand for both domestic use as well as export purposes. In 2018, New Zealand and Japan signed an MoU to collaborate for the development of hydrogen technology. New Zealand and South Korea are also working on a study aimed towards the export of green hydrogen. With strong support from the New Zealand Hydrogen Association, electrolyzer manufacturers may look to set up their plants in the country.
What are the challenges faced by New Zealand’s power market?
Lack of transmission grid to supply power is another challenge for New Zealand. The transmission line length has been on a downward trend since 2018 and has fallen significantly since 2010. With lack of transmission infrastructure, the capacity expansion in the country will be limited. The country’s transmission grids desperately need expanding. For this to be achieved, state-owned transmission grid operator Transpower needs to play a major role. Alternatively, or concurrently, the country may need to look towards privatizing the transmission sector to enable rapid growth.
How has COVID-19 affected the New Zealand power market?
New Zealand was significantly affected due to the COVID-19 pandemic in 2020. To curb the spread of COVID-19, the New Zealand Government imposed strict national lockdowns in the country. Majority of the sectors in the country were affected due to these lockdowns; however, tourism and hospitality sector was the most badly affected.
With respect to power sector, the electricity consumption in the country declined by more than 2% in 2020 as compared to 2019. Electricity demand from industrial and commercial sectors declined significantly due to national lockdowns. As the COVID-19 cases in the country declined significantly after the first national lockdown, industrial and commercial establishments opened again.
Market report scope
Cumulative power capacity (Year – 2020) | 9.9 GW |
Base year for estimation | 2020 |
Market overview by | Capacity & generation, and transmission & distribution |
Forecast period | 2021–2030 |
Key companies | Meridian Energy Ltd, Contact Energy Ltd, Genesis Energy Ltd, Mercury NZ Ltd.
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This report provides a comprehensive analysis of the power market in New Zealand and contains the following sections;
- The executive summary captures the key trends in the country’s power market.
- The “New Zealand Power Market, Snapshot” section provides a snapshot of the key parameters that affect the country’s power sector, as well as key points about the country’s power market including opportunities, challenges, and the impact of COVID-19.
- The “New Zealand Power Market, Market Analysis” section provides the market structure, generation market share, deals, and demand structure.
- The “New Zealand Power Market, Regulatory Scenario” section details the regulations and policies in the country’s power sector.
- The “New Zealand Power Market, Capacity and Generation” section provides information on cumulative installed capacity and annual generation trends, by individual generation source.
- The “New Zealand Power Market, Transmission and Distribution Overview” section discusses the power T&D infrastructure and electricity trading.
- The “New Zealand Power Market, Major Generating Companies” section discusses the major electricity generating companies in the country.
Reasons to Buy
- Identify opportunities and plan strategies by having a strong understanding of the investment opportunities in the country’s power sector
- Identify key factors driving investment opportunities in the country’s power sector
- Facilitate decision-making based on strong historic and forecast data
- Develop strategies based on the latest regulatory events
- Position yourself to gain the maximum advantage of the industry’s growth potential
- Identify key partners and business development avenues
- Identify key strengths and weaknesses of important market participants
- Respond to your competitors’ business structure, strategy, and prospects
Table of Contents
Table
Figures
Frequently asked questions
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What is New Zealand’s total cumulative power capacity?
New Zealand’s total cumulative power capacity in 2020 was 9.9 GW.
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Who are the major power generation companies in New Zealand’s power market?
The power generation segment in New Zealand is dominated by Meridian Energy Ltd, Contact Energy Ltd, Genesis Energy Ltd, and Mercury NZ Ltd.
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What is the leading source of power capacity in New Zealand?
Hydropower, including large conventional hydro, pumped storage, and small hydro, was the dominant source of power in 2020, accounting for more than 50% of total installed capacity.
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Who regulated New Zealand’s energy policy?
New Zealand’s energy policy is regulated by three major bodies: Ministry of Business, Innovation and Employment (formerly known as the Ministry of Economic Development), the Electricity Authority, and the Commerce Commission.
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What is the annual power consumption in New Zealand?
Power consumption increased from 34.7 TWh in 2000 to 39.4 TWh in 2020, growing at a CAGR of 0.6%.
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What sector is the leading driver of New Zealand’s power consumption?
In 2020, the industrial sector had the dominant share in power consumption accounting for more than 35%.
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Who owns and operates New Zealand’s transmission network?
Transpower is the sole electricity transmission system operator in New Zealand. Power transmission in the country depends on high-voltage direct-current (HVDC) links between power stations located in the north and south of the country.
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