Why is New Zealand's electricity system so adaptable?

New Zealand’s electricity system is designed to rapidly respond to changing electricity demand and supply conditions. This adaptability ensures the system produces electricity at the lowest cost now, and in the future, and is reflected in varying wholesale electricity prices.

Will NZ batteries address long-term storage?

However, batteries will not address long-term storage of weeks and months, which is the focus of the NZ Battery Project. The projected lesser investment in battery technology indicates a greater need to use hydropower capacity to compensate for the variability of solar and wind generation.

Why should New Zealand increase electricity production?

Increasing electricity production will also enable the decarbonisation of the economy – which is needed to meet New Zealand’s climate goals. Despite the building of more renewable generation plants, future prices 1 for winter 2024, 2025 and 2026 remain high (see figure 1).

What happened to New Zealand's electricity supply in 2024?

Secondly, the Tiwai aluminum smelter (New Zealand’s largest electricity user), through demand response, reduced its electricity use and national demand by an estimated 330GWh from 10 June to 30 September 2024. Hydro storage has rapidly increased and thermal generation has backed off since September

Will New Zealand's electricity supply chain be online in winter?

Many build projects are facing covid-induced supply chain issues, long consenting times and increasing costs. Hence, there is growing uncertainty about what generation will be online for each winter. During winter peak demand, New Zealand consumes the highest volumes of electricity.

Could scrapping the NZ battery project be shortsighted?

Scrapping most of the NZ Battery Project, as others have observed, may well prove shortsighted. The good news is that New Zealand is on track to meet electricity demand with renewable generation by 2030. The less good news is that winter price spikes are still likely.