Election 2026 – energy policies: What parties propose for power prices and renewables

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요약

Electricity prices rose 12% in the year to June and have become an election issue.

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Lake Pūkaki is the main hydro lake in the South Island.

Energy has been dubbed a key issue for this election, so where do the political parties’ policies sit?

High power prices are so far featuring in the campaign.

Consumer price index (CPI) data from Stats NZ show electricity prices notched up a 12% increase in the year to June.

The Electricity Authority says power bills across all households and small businesses increased on average by 6.8% in the first half, driven mostly by higher lines charges.

Aside from prices, the controversy has focused on liquefied natural gas (LNG) and the proposed separation of the retail and wholesale roles of the big four power companies.

Then there is the offshore oil and gas exploration ban – introduced by Labour but overturned by the current Government.

While the price of electricity looks likely to decline over the next few years because of the extra power generation coming on stream, the cost of transmission will steadily increase because of higher lines charges.

The Commerce Commission last year approved lines charge increases from Transpower and the lines companies from 2025 to 2030 so the substantial costs of upgrading and maintaining the network can be met.

The energy sector was stung in 2024 when wholesale prices hit an average of $820 per megawatt hour (MWh) because of low hydro levels, calm wind conditions and rapidly declining gas supply.

The big four generators last year struck a groundbreaking deal to support the Huntly Power Station – which provides dry-year backup to the hydro- and wind-dominated system.

The commission gave its blessing to allow Genesis, Contact, Meridian and Mercury to enter into a series of agreements referred to as the Strategic Energy Reserve Huntly Firming Option.

The upshot of that is that the big four now have access to Genesis Energy’s 1-million-tonne coal stockpile, should conditions demand it.

The events of 2024, exposing the parlous state of the country’s gas resources, prompted the National-led Government’s plan to import LNG through a terminal to be built at Port Taranaki.

Some estimates put the cost of a terminal at around $1 billion.

The Government had planned an announcement on the project before the election, but it has now kicked that into touch until after the poll.

In the meantime, the Iran war has severely curtailed LNG production at Qatar – a major producer – and has affected LNG shipping through the Strait of Hormuz.

Platts JKM, the benchmark price of LNG delivered to Northeast Asia, last month surged to its highest level since December 2022 at US$25.908/million British thermal units.

The following is a list of key points from the parties.

National

• Let developers, major users, and investors build transmission and recover costs from those who use it.
• Make connections faster and cheaper by allowing Kiwis to choose an accredited contractor, not just the one their network hands them.
• Let Kiwis sell power to the best buyer, so households and businesses with solar or a battery can sell to any power company, not just the one they buy from.
• Address the dry-year problem by levelling the playing field for backup power by opening the backup market.
• Tackle lines charges by reviewing the rules that set them, and require residential and small business solar connections to be approved within two working days.
• Make affordability a core objective for the Electricity Authority by writing it into law.
• Cut more red tape so that wind, solar and hydro can be built faster.
• Launch the Home Energy Fund – long-term loans enabling people to invest in their own power and cut their own bills, and to enable plug-in solar.
• Require AI data centres to bring their own new, firmed power, so new digital investment adds to the grid and creates jobs instead of pushing up prices.

Labour

• Separation: “All options are on the table. We know that they are not currently working in favour of households or businesses,” energy spokeswoman Megan Woods said.

• Exploration: Reinstate the offshore oil and gas exploration ban that it first put in place in 2018.
• LNG: Put a stop to plans to build an LNG terminal.
• Energy backup: “Look closely” at building a fourth Rankine at Huntly Power Station, to be run on bioenergy.
• Solar: Set up a kickstart subsidy of up to $3000 for low- and middle-income homeowners and renters. Plug-in solar panels for renters.
• Establish a $30 million community battery fund so whole neighbourhoods can share in savings.

Green Party

• Form a New Zealand-owned entity called Kiwipower “to fill the gaps the market has failed to fill, and speed up the renewable energy transition”.
• Make household power bills more affordable.
• Zero-interest clean energy loans to install solar and/or batteries on your home.
• A renters’ right to solar, and legalise “plug-in” solar.
• Scale up solar for public and Māori housing, including 40,000 public homes and hundreds of Māori housing projects.

NZ First

• Break up the power companies “so they can no longer control both the power and the price”.
• Separation: Split the four “gentailers” up into generators and retailers.
• Electricity market: Replace the current system so companies cannot hold back supply to drive prices higher.
• Guarantee long-term, fixed-price contracts for new-build generation projects, giving investors certainty.
• More power stations, more renewable energy and more competition.
• Solar: Allow household solar power to be sold back into the grid.

Act NZ

• Put competition and fair access first and strengthen enforcement where electricity companies misuse market power.

• Give New Zealanders the right to sell the power they make, choose their buyer, and export more electricity when the network has room.
• Open transmission to private investment: allow private investors to build, own and operate new transmission connected to the national grid.
• Break the connection bottleneck by letting qualified providers compete to deliver customer-funded connection work faster and cheaper.
• Make batteries and smarter grid technology compete with expensive new lines.

Te Pāti Māori

• Establish a $1 billion energy sovereignty fund.
• Establish a national independence energy plan.
• Build a Māori Energy workforce and industry, build rural energy capability.
• Regulate the energy system in the public interest.

Opportunity

• Boost renewable generation.
• Ringfence Government profits from power generation for investment in the renewable future.
• Merge the five energy regulatory agencies into one.
• Consolidate management of the 29 energy distributors into no more than eight.
• Electrify public transport systems.
• Issue low-interest loans for household electrification through a Ratepayer Assistance Scheme.
• Does not support an LNG terminal.
• Would not separate gentailers.

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