The challenges facing New Zealand’s energy sector have been spotlighted over the past year. With electricity shortages leading to skyrocketing spot prices, businesses have been forced to reassess their operations. In some cases, this has resulted in closures, such as the recent shutdown of the Kinleith Mill paper plant in Tokoroa. The economic and social consequences of these closures extend far beyond the affected companies, impacting transport operators and supply chains reliant on domestic manufacturing.

Compounding this crisis, New Zealand must also significantly expand its energy generation to support decarbonisation efforts across industry and transport. The need for a strategic and coordinated response has never been more urgent.

A plan for change

Recognising the gravity of the situation, the Auckland Business Chamber and the Northern Infrastructure Forum have put forward a 10-step energy action plan titled Unlocking the Energy Sector to Unlock Economic Growth. This plan builds on discussions, held by upper North Island industry leaders on 4 December 2024, and presents a framework for ensuring a stable, affordable and sustainable energy future.

The National Road Carriers Association, a founding member of the Northern Infrastructure Forum and an Auckland Chamber of Commerce affiliate, strongly supports the initiative and its call for urgent action to increase energy supply. NRC is committed to fostering a sustainable, low-emissions, climate-resilient future and will actively monitor and contribute to the plan’s implementation where necessary.

For New Zealand’s economy to flourish, reliable and affordable energy is non-negotiable. The 10 key actions proposed in the plan are:

– Creating a single energy regulator by consolidating the three existing energy regulators into one agency to provide leadership and accountability.

– Maintaining strategic reserves by ensuring sufficient backup energy supply is in place to provide support during prolonged dry spells.

– Developing a New Zealand energy strategy with aligned plans to meet projected demand across all generation types and an infrastructure investment pathway for generation and distribution.

– Building cross-party support by securing a bipartisan approach for the energy supply.

– Ensuring a generator-retailer model drives competition by analysing the impact of the gentailer model on competition, assessing policy responses (including separation of generation and retail functions) and setting out implementation steps.

– Greater use of demand response by developing new demand response tools that drive greater industry utilisation.

– Secure energy generation security and investor confidence by facilitating the development of long-term contracts and driving demand through government procurement.

– Unlocking New Zealand’s geothermal potential by formulating a sector development blueprint for geothermal energy, with a view to designing a regime that is as enabling as possible.

– Removing red tape hampering distribution build, streamlining the planning and consenting framework around the delivery of distribution infrastructure.

– Developing an energy sector warrant of fitness to review institutional arrangements and measure performance against key metrics independently.

The role of the Marsden Point Special Economic Zone

The proposed Special Economic Zone (SEZ) at Marsden Point is a significant new development in New Zealand’s energy landscape. The government has acknowledged that while it cannot afford to reinstate the Marsden Point Oil Refinery, a SEZ could help attract private investment into key energy infrastructure projects. Energy Minister Shane Jones has indicated that Cabinet will consider using SEZs to support industries vital to national interests, such as energy security and fuel refining.

Channel Infrastructure, which manages the former refinery site, has already outlined ambitious plans to transform Marsden Point into an energy precinct. This initiative includes potential projects such as a biofuel refinery and expanded jet-fuel storage, contributing to energy resilience and decarbonisation efforts. If realised, these projects could provide a crucial alternative fuel supply while also stimulating economic growth in Northland.

Can New Zealand rise to the energy challenge?

New Zealand is at a crossroads. The success of this plan will depend on swift action, industry collaboration and strong political will. Including the Marsden Point SEZ in these efforts marks a promising step toward securing energy resilience and economic growth. If implemented effectively, it could serve as a model for future energy infrastructure initiatives across the country. The coming months will be critical in determining whether the country can rise to meet this challenge.