Energy security has taken a step forward, says Transpower boss
Saturday, 2 May 2026
Kiwis may be reeling from power-price increases, but the risk of the lights going out this winter — or in the next few years — appears to have decreased.
The power cuts in the central North Island in 2021 are becoming a more distant memory.
And the once steady stream of “Customer Advice Notices” issued by power system operator Transpower, warning of potential shortfalls of generation — sometimes causing media frenzy — has slowed to a trickle.
When he first took up the energy portfolio in 2023, Energy Minister Simeon Brown made clear his top priority was keeping the lights on.
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But Transpower chief executive James Kilty says the risk of power cuts is now lower this winter than it has been for “many years”.
While not quite out of the woods, its annual draft Security of Supply Assessment, released last week, was more upbeat about both the coming winter and the outlook beyond.
It described the outlook to 2028 as remaining fragile and flagged an emerging risk of power supplies falling short of what Kilty describes as the “Goldilocks zone” by 2031, but he says it nevertheless represents a step forward.
Hydro, coal and gas boost outlook
The better outlook for this winter is largely down to the weather which has resulted in strong hydro inflows and reduced generators’ carbon emissions.
As of Sunday, the country’s hydro lakes had 12% more water in them than usual for this time of year, thanks to the preceding storms.
And Genesis Energy still had a reserve of 1.1 million tonnes of coal sitting at its Huntly Power Station at the end of March, built up in collaboration with other generators in case of a dry year that, so far, hasn’t eventuated.
It may not be the best development for other industrial gas users, but power generators have also moved to tie up more of the diminishing supply of gas for their own use.
“We go into the winter with ‘good lakes’, a good coal stockpile, some published deals for access to more gas if things get constrained. All of that says to us that we’re in as good a position as you can be in the circumstances. It’s a very strong position.”
A forecast El Niño weather system could help keep the deeper South Island lakes topped up later in the year, although that remains somewhat speculative.
Investment strengthens future supply
Kilty says recent investments by generators have started to also improve the picture for future years.
The coal-stockpile arrangements at Huntly aside, another 100 megawatts of geothermal power has been commissioned in the last year, and prior to that a lot of wind and solar, he says.
“The industry has invested heavily in the last 12 months or so in new batteries to deal with short-term peaking issues.
“There are 330 megawatts of batteries in the system and Genesis has just committed to another 100 megawatts. That’s a significant amount of investment, billions of dollars that is shoring up the system.
“Last year, we didn’t have the firming options in place, we didn’t have the pipeline of investment that is now flowing quite freely. So it has represented a meaningful step forward in security.”
Even so, Kilty makes clear the electricity system operator can’t give any guarantees about power cuts, even in the months ahead, and Transpower’s report stresses its forecasts rely on generators substantially making good on their investment plans.
Lack of “fuel” — which can include everything from water to run hydro plants, wind to keep the turbines spinning, and gas — has tended to be the biggest threat to the continuity of power.
But the risk of concurrent outages of some of the major pieces of ageing equipment used to generate electricity or move it around the country could still threaten supplies, even with fuel in abundance.
HVDC outages key vulnerability
New Zealand’s largest electricity turbine, the 403-megawatt Unit 5 gas turbine at the Huntly Power Station, was offline for the best part of a year in 2023-24.
And Transpower itself has experienced no fewer than 18 unplanned outages since the start of last year on one or other of the two high-voltage (HVDC) circuits that carry electricity between the North and South islands to balance demand and supply.
Most of the HVDC network comprises on-land overhead power lines that lead into the subsea cables, running from the Benmore substation in North Otago to the Haywards substation in the Hutt Valley.
Two of the outages were caused by strong winds whipping up seawater spray and shorting circuits, and five by high winds doing other damage to the network.
Six resulted from equipment failures which Transpower assessed as “all unrelated”, another three from electrical control errors such as alarms interrupting power flows and two from “human error”.
The biggest snag might be if a major HVDC outage coincided with peak demand in winter mornings or evenings and a need to transfer a large amount of generation between the islands.
But Kilty appears phlegmatic.
“Comparable” HVDC systems in other countries have more frequent outages, he says, and the undersea legs are to be replaced at a cost of $1.1 billion by 2032 in a project that will also add greater redundancy and resilience, he says.
While Transpower sees no pattern to the past outages, Kilty says it assumes the incidence of more severe weather events will increase.
As part of the upgrade of the HVDC network, it will move the landing stations for the subsea cable further away from the shore to make the lines less susceptible to spray.
“We are increasing resilience right across the network to make sure that as we replace ageing assets, we’re bringing them up to standards that will meet an increase in severe weather events.”
Nor is he sounding strong alarms over the risk of other equipment failure.
Transpower realises the turbines at Genesis’ Huntly Power Station are ageing, he says.
“We know Genesis is investing in the reliability of those assets. One of the units has been out in recent months, being upgraded. So those investments are occurring.”
Keeping the lights on
Assuming Kilty hasn’t jinxed it, the next challenge for the sector, after ensuring the lights can stay on, may be ensuring Kiwis can afford to turn on the switch.
Increased security of supply will feel like cold comfort to people who are doing it tough paying for power, he says.
Green Party energy spokesperson Scott Willis told Parliament on Thursday — citing energy consultant Ian McChesney — that 200,000 households weren’t able to afford to keep their homes adequately warm last year, an increase of 80,000 over the past two years.
Kilty acknowledged a lot of people were struggling with the cost of living “and electricity and energy generally, is a contributor to that”.