The Electricity Retailers’ and Generators’ Association of New Zealand (ERGANZ) welcomes the Commerce Commission’s decision to authorise the Strategic Energy Reserve Huntly Firming Option.
The approval gives the green light for a commercial agreement between Genesis, Contact, Mercury and Meridian, which bolsters New Zealand’s energy security, especially in dry years when generation from hydro is limited and wind and solar output is low.
ERGANZ Chair Simon Watt says the decision is a pragmatic, market-led solution that supports reliability and price stability while the country continues its transition to renewables.
“This is a practical outcome that strengthens the system and can give Kiwi consumers confidence,” says Watt.
“By extending the life of one of Huntly’s Rankine units, the system retains proven, reliable backup generation that ensures homes and businesses have access to power when it’s needed most.”
Watt says the Commerce Commission has found the Strategic Energy Reserve Huntly Firming Option will likely deliver lower and less volatile electricity prices.
“The Commerce Commission has found this agreement will provide clear public benefit. When electricity prices are more predictable, businesses can plan with certainty, households are less exposed to sudden cost increases, and investors have the confidence to keep backing renewable and electrification projects.”
Watt says the decision gives the market a clear path forward.
“Some Huntly capacity remains available for wider market use, and generator retailers are committed to developing new hedge and risk-management products that smaller retailers and industrial users can access.
That helps diversify the market, making it easier for emerging retailers to compete and giving consumers more choice.”
Watt says the decision also supports the sector’s ongoing transition.
“New Zealand is in the middle of a renewables boom, with billions of dollars of new generation across wind, solar, and geothermal being built across the country.
But even as we add more wind and solar, the electricity system still needs firming for when the sun isn’t shining, the wind isn’t blowing, or the lakes are low.”
