Security, competition and action: what New Zealand’s electricity system really needs

By Mike Roan, Chief Executive, Meridian Energy

This article was originally published in The Post on 8 April 2026.

The state of New Zealand’s electricity system is regularly debated. It happened in the ‘60s, ‘70s, ‘90s, in the early 2000’s, and it’s still happening now. Power matters to households, businesses and communities, and when prices rise, or when the supply of electricity feels uncertain, people rightly want answers.

A recent opinion piece in this paper by Margaret Cooney of Octopus Energy raised concerns about New Zealand’s reliance on overseas fuel, the resilience of the system, and whether it’s delivering what Kiwis need and expect.

These are important questions, and they deserve a thoughtful response.

There’s more agreement than disagreement from us. New Zealand does need – and has, by global standards – a secure, affordable, low emissions electricity system. And we need a system that works for and with customers, not against them.

Where perspectives differ is on what’s driving the pressures we’re experiencing, what will make the biggest difference over time, and what’s already being done.

The most important factor shaping today’s electricity system is the decline of the domestic gas supply. Gas has long played a critical role in supporting hydro generation during dry years and peak demand. As that supply becomes scarcer and less reliable, prices rise – as they have in recent winters – so the system must adapt.

That challenge isn’t ideological, or political - it’s physical.

That’s why Meridian joined other energy companies in supporting measures to maintain firming generation capacity (i.e. reliable, flexible generation) at Huntly through securing three thermal units and a stockpile of fuel for the next decade.

That deal wasn’t the result of political pressure – it was the electricity industry seeing the demise of gas and demonstrating our ability to work together to find a solution in the country’s best interests.

There’s a place for more insurance on top of the Huntly deal, which is where other measures currently being taken by Government and the industry come in.

But Meridian’s view is that for a country with New Zealand’s natural advantages, our most effective long-term option to mitigate price increases is more hydro storage. That’s why Meridian is looking at how we can increase storage and asking for better access to what’s already available.

More hydro storage and greater flexibility over how it is managed will significantly reduce the energy price impact of dry years. It will also limit the future need for coal or gas, which will put more downward pressure on prices because those fuels are more expensive. 

There’s also been criticism of gentailers and the role they play in competition. Again, let’s consider how the system actually works.

New Zealand’s electricity market is already very competitive and last year’s Government Review confirmed this. We have more electricity retailers per capita than either the UK or Australia. Customers can and do switch retailers, independent retailers and generators have entered the market and grown, and innovation is constant.

Competition is good, and we welcome it. But what’s also important is a willingness to invest large amounts of capital quickly to offset the loss of domestic gas and bring residential and business price increases back to the levels New Zealand has enjoyed historically. And that’s where companies like Meridian are already doing the heavy lifting.  

Right now, New Zealand’s electricity sector is building new renewable electricity generation at a faster rate than at the peak of Think Big, and faster than any time in its history. At Meridian, our development pipeline is large enough to double our current generation, which is already a third of what the country uses.

This investment will help ensure we have all the power we need as our economy grows, and as more Kiwi households and businesses electrify. As I noted above, just as importantly, this investment will bring prices down over time.

There’s lots of effort and innovation on the retail side of our business too. Meridian’s new products are helping you manage when and how you use electricity – from time-of-use pricing and rewarding customers for allowing us to control their hot water systems, to smarter EV charging and more flexible plans. These innovations reward flexibility and save people money while making the system cleaner and greener.

It’s important that any public debate reflects and recognises this work already underway across the system.

We’re not defending the status quo. Not at all. We’re changing it - carefully, responsibly and with urgency. And we’re doing this because we all deserve a system that keeps the lights on, offers affordable prices, and makes the most of our country’s natural advantages. That’s the work underway right now, and it’s where our focus will stay.