Empowering Kiwis to have a say in the energy transition

Energy and Resources

The Government is seeking feedback on an ambitious programme of work to transition New Zealand towards a low emissions economy, with consultation on five streams of energy policy launched by Minister of Energy and Resources Dr Megan Woods today.

“This Government has already laid the groundwork for a new energy future that moves us away from fossil fuels and towards renewable energy,” Megan Woods said.

“The next steps are to shape how that will happen.

“Yesterday’s announcement with BlackRock on a $2 billion investment fund for clean tech and renewable energy shows how important our climate change policies are to attracting investment to help secure a fully renewable electricity grid.

“The future of energy in New Zealand is renewable. We will phase out fossil fuels and replace them with clean energy.

“This will give New Zealand a leading economic edge as people demand more sustainability in the products and services they buy, and help New Zealand meet its climate change commitments.

“Achieving this will require the energy transition to be made in a way that keeps the lights on, keeps power bills affordable, and keeps our economy growing.

“That’s why we are taking a coordinated and deliberate action to improve the way the entire country is powered – from the energy used to process food to the energy used to deliver it to your door.”

“We are asking New Zealanders to have a say on important policy areas that will shape our way toward to a renewable future,” Megan Woods said.

The consultations include:

  • a plan for managing the gas industry’s transition to a low emissions future
  • an Interim Hydrogen Roadmap to set out the government’s initial views on the future role of hydrogen in New Zealand
  • regulations to enable offshore renewable energy development
  • market measures to make sure electricity is reliable and affordable as we transition to an expanded and more renewable system,
  • and how we will implement the Emissions Reduction Plan action to ban new fossil fuel baseload electricity generation.

“Setting the gas sector on the right path will be critical for reducing emissions, maintaining energy security and affordability, and for New Zealand’s prosperity. The offshore renewable energy consultation demonstrates the significant growth potential of this resource and economic opportunities. The electricity market measures consultation considers challenges arising during the transition, and explores whether additional measures may be needed to keep electricity reliable and affordable as more renewable electricity supply is developed,” said Megan Woods.

“Where electrification isn’t easy, we want to equip Kiwi businesses and households to choose the best emissions reductions technologies for the job. Sustainable and safe hydrogen and biogas will be part of this mix. The Interim Hydrogen Roadmap consultation and the Gas Transition Plan issues paper explore the opportunities in this area and the key trade-offs that may need to be made.

Together, the consultations aim to inform further work to set the direction and pace of change for reducing New Zealand’s emissions from energy.

Notes to editor:

Submissions will be used to develop a final Hydrogen Roadmap, Gas Transition Plan, offshore renewable regulatory regime, identify priority electricity market measures and support implementation of Government’s commitment to ban new fossil fuel baseload electricity generation, as well as support the development of the New Zealand Energy Strategy by the end of 2024.

More information on how to make a submission is available on the Ministry of Business, Innovation and Employment’s website: www.mbie.govt.nz/ourenergyfuture

Interim Hydrogen Roadmap

  • In the Interim Hydrogen Roadmap, we are asking for feedback on the opportunities and trade-offs for hydrogen in New Zealand’s energy transition, and the proposed role the Government could play in supporting it.
  • Hydrogen can be produced in renewable ways, mostly through electrolysis of water using renewable electricity. When used in a fuel cell, green hydrogen produces no greenhouse emissions at the point of use and emits only water vapour.
  • Green hydrogen could play a role in decarbonising hard to abate activities like industrial processes and in heavy transport (e.g. heavy road freight, marine transport and aviation), alongside other energy sources like electrification and bioenergy.
  • The Interim Roadmap includes actions to:
    • establish a public-private body to help coordinate activity between government, the sector and other interested organisations
    • undertake regulatory work focused on enabling safe basic operation of key hydrogen equipment and activities
    • initiatives recently announced in Budget 2023 to provide up to $100 million over ten years for the Regional Hydrogen Transition initiative, a rebate to hydrogen consumers targeted at supporting a just transition, as well as $30 million over three years for a clean heavy vehicles grant.

Gas Transition Plan

  • The Gas Transition Plan Issues Paper seeks views on the key challenges and opportunities for the fossil gas sector to transition to a future of low carbon emissions.
  • The final Gas Transition Plan will identify the opportunities and benefits provided by the energy transition for the gas sector, identify pathways for the fossil gas sector (focusing on the period out to 2035), and identify the role for renewable gases and other low emissions technologies.
  • We want to hear from our Treaty partners, businesses, and communities on the key challenges and opportunities for the gas sector to transition to a low emissions future.
  • We are also seeking feedback on a range of technologies that could assist the fossil gas sector in reducing emissions, such as biomethane, hydrogen and carbon capture, utilisation and storage.

Offshore Renewable Energy

  • We are seeking feedback on proposed regulations to enable renewable energy development at sea, which could help us to get to net zero 2050.
  • We are interested in stakeholders’ views on a proposed regime to enable offshore renewable infrastructure to be constructed, operated and decommissioned.
  • Getting our regulatory settings right will give developers greater certainty to support investment in offshore renewable infrastructure.
  • The regulations will be developed to enable iwi participation, balance environmental considerations and address decommissioning risks.

Electricity Market Measures

  • The 'Electricity Market Measures' issues paper investigates the need for electricity market measures that support affordable and reliable electricity supply while accelerating the transition to a highly renewable electricity system. 
  • We are asking for feedback on what potential market measures may be needed to support the electricity sector through this transition.
  • The paper covers generation, wholesale market competition including challenges faced by independent retailers, transmission and distribution networks, demand flexibility, and also how policy objectives are reflected for the electricity system regulators.
  • A shared view of the direction and needs of the electricity system will enable government and industry to drive innovation and create new solutions for consumers.
  • The Electricity Market Measures consultation is accompanied by a companion document that seeks feedback on the implementation of an Emissions Reduction Plan action to ban new fossil fuel baseload electricity generation. We are asking for feedback on the design of this legislation and whether there should be any exemptions.

New Zealand Energy Strategy

  • The New Zealand Energy Strategy will support the transition to a low emissions economy, address strategic challenges in the energy sector, and signal pathways away from fossil fuels.
  • The Strategy will build on these consultations and align existing policies to ensure a coordinated approach towards the energy transition.
  • Development of the Strategy is underway and throughout 2023 MBIE’s focus is on holding discussions with a wide range of stakeholders who hold the knowledge and expertise we need to inform our initial thinking for the energy transition
  • After this targeted engagement, we expect to release our thinking to date in a discussion document and seek feedback from across Aotearoa New Zealand through public consultation.
  • This means that – by the end of 2024 – all New Zealanders will have been invited to provide their feedback on the next steps for our energy system. This will allow us to check the right direction to take us forward, and get input on the big trade– offs that all New Zealand will collectively have to make.