NZ Electricity Market
New Zealand's electricity industry has undergone considerable structural change over the past decade as the government has worked to promote competition, reliability and fair prices for consumers.
The industry comprises four key sectors:
There are six main generator businesses: Meridian Energy, Contact Energy, Genesis Power, Mighty River Power, TrustPower and Todd Energy. Generators are also entitled to sell electricity to consumers and energy retailers. Approximately 50% of New Zealand's electricity generation is hydro, with the balance from geothermal, gas, coal and oil-fired thermal stations, bio-mass plants and wind farms. Around 40 sites supply electricity directly to the national grid.
Transpower (SOE) owns and operates the national electricity grid, which comprises switchgear, high voltage cables and pylons for transmitting high voltage electricity from generators to distributors. Transpower is responsible for transmitting high voltage electricity from the generating stations connected to the national grid to some 174 Grid Exit Points (GXPs) across New Zealand. These GXPs are the points of supply for distribution networks like Powerco.
At the GXPs, or substations, electricity is transformed to lower voltages then conducted to end users by overhead wires or underground cables owned by local distribution companies. There are currently 29 of these, mostly regionally based, varying from publicly listed companies like Powerco to community-owned trusts. Powerco is New Zealand's second largest lines company by customer connections. The 1998 Electricity Reform Act broke up generation and distribution segments of the electricity industry. The 2010 Electricity Industry Act has allowed distributors to enter retailing with some restriction.
Retail companies sell delivered electricity to end-users. Click here for a list of energy retailers.
Residential and business consumers purchase delivered electricity from retail companies. Large industrial and commercial consumers also purchase electricity from retail companies, but have the option of contracting directly with distribution companies such as Powerco for electricity distribution services.