Source: Energy Resources Aotearoa
Energy Resources Aotearoa welcomes the Commerce Commission’s decision to approve an agreement between Genesis Energy, Contact Energy, Meridian Energy and Mercury to keep an essential backup option at Huntly Power Station available for the next decade.
The agreement, known as the Strategic Energy Reserve Huntly Firming Option, will help make sure New Zealand has enough electricity during dry periods or when renewable generation from wind and solar is low. The arrangement runs until the end of 2035 and gives the energy sector confidence to plan ahead for future winters.
Energy Resources Aotearoa Chief Executive John Carnegie says the decision strikes the right balance between competition, reliability and affordability.
“This is a smart and practical outcome for Kiwi homeowners and businesses. The Commerce Commission has formalised what everyone already knew – that keeping Huntly’s backup generation available will make the system more reliable and keep downward pressure on prices relative to its absence, especially when hydro lakes are low, the sun is not shining or the wind is not blowing,” Carnegie says.
“Huntly has long been New Zealand’s electricity security blanket. Its multi-fuel setup, running on natural gas or coal, gives the system resilience and flexibility, with potential to move to lower-carbon fuels like biomass over time. Keeping that capability in place means the grid can call on proven backup.”
“As we move to more renewable energy, we still need backup generation that can step in when needed. This authorisation means the Huntly plant can provide that cover rather than being shut down, which would make the system more vulnerable when support is needed most.”
Carnegie says the approval also reflects a positive, co-operative effort by the generators involved.
“It’s great to see the industry working together to find long-term, practical solutions. When companies work together on issues like this, everyone benefits. This decision shows that collective effort across the sector can keep the lights on.” Carnegie says.
Carnegie says it is also encouraging that Genesis intends to make similar backup options available for smaller retailers, large energy users and other market participants.
“Giving more players access to backup generation will help spread the benefits of reliability more widely and make the electricity market more resilient overall,” Carnegie says.
Energy Resources Aotearoa supports practical policies that encourage investment in both renewable generation and reliable backup sources.
“New Zealand’s energy system needs both renewable generation and firming working together. Keeping options like Huntly available while we build more wind, geothermal and solar, and we look for more natural gas, helps manage risk and ensures reliability as we move toward a lower emissions future,” Carnegie says.
