Energy Policies of IEA Countries: New Zealand 2010 Review

New Zealand’s strong commitment to liberalised energy markets has delivered a relatively high level of energy security and economic prosperity for consumers. Since the previous IEA review in 2006, the government has built on the success of existing policy mechanisms and implemented a number of far-reaching changes in the electricity sector and environmental policy. But progress in some sectors, such as energy efficiency, has not been as strong as anticipated. In mid-2010, the government commenced a review of the New Zealand Energy Strategy. The result is the publication of a new energy strategy, which establishes clear long-term policy priorities and energy-savings goals. Implementing these strategies will bring many new challenges, including attainment of the government’s medium-term energy-savings targets. New Zealand enjoys the advantage of a diverse and balanced portfolio of renewable-energy resources, which contribute over 70% of electricity output – the third-highest portion in IEA member countries. This resource base has the potential to deliver greater volumes of energy, and the government aspires to increase this proportion to 90% of electricity generation by 2025. Meeting this target will bring many benefits but also tough challenges, such as maintaining a robust National Grid. This review analyses the energy policy challenges facing New Zealand and provides sectoral critiques and recommendations for further policy improvements. It is intended to help guide New Zealand towards a more sustainable energy future.