New Zealand

With its unique resource base, New Zealand is taking steps towards carbon neutrality by 2050, under the 2019 Zero-Carbon Bill and a broadened NZ Emissions Trading Scheme. The country is a success story for the development of renewable energy, including hydropower and geothermal energy, without government subsidies. Geographically isolated, the country has also developed robust policies for security of supply.

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Key recommendations, 2017

Explore country report

Foster decarbonisation of New Zealand’s economy with performance-based targets, especially for transport and industry

Accelerate the decarbonisation of the economy with a suite of integrated actions, including an enhanced New Zealand Emission Trading Scheme and sectoral energy action plans, especially for the transport and industry sectors, with performance-based targets aligned with energy and climate goals, and provide a long-term and stable framework for energy investments.
Reinforce electricity security of supply during the transition

Ensure security of supply throughout wholesale and retail electricity markets and via power system flexibility. Accelerate steps towards a liquid and deep financial market to mitigate risks for wholesale and retail market participants, ensure efficient transmission pricing, adapt the market design for the market integration of greater shares of variable renewable electricity, include wind and solar PV. Consider adopting as a market-based safety net, a strategic reserve auction for dry years, as part of the reliability monitoring and response of the system operator.
Investigate scenarios of very high use of renewable resources

Conduct a systematic, detailed review of likely scenarios for a portfolio of wind, solar and geothermal resources and assess impacts on grid and system reliability in a detailed integration study of the operational and system stability.
Review the electricity retail market and electricity distribution governance

Direct the New Zealand Productivity Commission to review the electricity distribution sector, with a view to identifying opportunities to improve the sector’s productivity, flexibility and its capacity to respond effectively to the challenges posed by the potential transformation of the sector. Include examining the sector’s structure and governance to encourage regional management development, operation and development of distribution networks.
Consider the extension of the price-quality path regulation to all distributors

Where it is cost-effective to do so, extend the price-quality path regulation through regional integration and the enforcement of reliability standards, and thus enhance the regulation of all distribution services.