Delivering the energy package: A progress report on energy reform

Energy is proving to be a critical policy issue leading up to New Zealand’s general election. In October last year we unpacked the Government’s energy package, a set of actions intended to invest in energy security and build stronger markets. Now nine months later and just four months until the election, we look at:

what actions have been delivered;
what’s in progress; and
what’s lagging behind.

Actions in the energy package

Invest in energy security

Begin procurement for a Liquefied Natural Gas (LNG) import facility

Despite the Middle East conflict increasing awareness of LNG price volatility, and differing views on the size of the dry year problem, the Government has shortlisted two providers for the procurement of an LNG import facility.[1] A contract is expected to be signed this year, and the facility is expected to be operational in 2028.

The facility will no longer be funded via a levy on power bills. Instead, Government is working with gentailers on a “fair funding model” which will prioritise access for dry-year generation but include a user-pays element to enable industrial access. Funding decisions will be guided by the principle that responsibility for keeping the lights on sits with the electricity sector. Cabinet has agreed to develop a regulatory backstop if negotiations do not succeed.[2]

Remove capital restraints on Mixed Ownership Model (MOM) companies

The Government participated in Genesis’ February $400m equity raise and has indicated it is willing to participate in any equity raise by a MOM company required for major new investments “if the proposals stack-up”.[3]

Increase energy supply through government energy demand

The Ministry of Business, Innovation and Employment (MBIE) is working with the New Zealand Defence Force, Health NZ and Department of Corrections on pursuing long term PPAs when existing All-of-Government (AoG) contracts expire. A market briefing event was held in late March. MBIE was also due to report by the end of May on the viability of a streamlined procurement model to accelerate the rollout of commercially viable solar across government properties.[4]

Supercharge renewable energy (ongoing actions via Electrify NZ)

As of 6 July, 30 renewable energy projects have been either listed or referred to follow the Fast-track process under the Fast-track Approvals Act 2024. Of those, six have been approved, a further three are in progress, and the remaining 21 are yet to lodge a substantive application.

A new National Policy Statement (NPS) for Infrastructure, amended NPSs for Renewable Electricity Generation and Electricity Networks, and an amended National Environmental Standard for Electricity Transmission Activities are now in force. The Offshore Renewable Energy Bill was passed last week, with the first tender round for permits expected in the coming months. Parliament’s Environment Committee has been granted an extended deadline of 20 July to report back on the Planning Bill and Natural Environment Bill.

Build stronger markets

Reduce sovereign policy risk for investors

Last November, the Government broadened the scope of the $200m commercial co-investment Gas Security Fund to include investment in existing fields and gas storage. Expressions of interest opened on 12 January, but the fund is yet to be allocated. Minister for Resources, Hon Shane Jones, has indicated he intends to include damages clauses to protect investments from cancellation by a future government.[5]

Work to address policy uncertainty was reportedly under active consideration as at February 2026 [6] but no further announcements have been made.

Create a more powerful Electricity Authority (EA)

The Government is amending the Electricity Industry Act (EIA)[7] to:

increase penalties (from 2027) for serious rule-breaking to up to $10m, or three times the commercial gain, or 10% of the company’s turnover, whichever is the greatest;
introduce instant infringement fines (from 2026) up to $2,000 for minor, repeated breaches; and
improve the EA’s ability to update rules and monitor the market.

The Government will also amend the EIA and Government Policy Statement (GPS) on electricity to give the EA a broader role in managing, monitoring, and responding to dry-year risk, improving information and reporting, and updating existing risk-management tools.[8]

Improve transparency and efficiency of the electricity market

The EA and the Energy Competition Task Force are continuing actions to strengthen performance of the electricity market. For example:

Non-Discrimination Obligations on the gentailers to help level the playing field in the electricity market came into force on 1 July.[9]
The EA is implementing (and will monitor) measures to improve liquidity, price discovery and access to risk management contracts.[10]

Improve gas market transparency

The Gas Industry Company published a supply and demand study in March 2026. The Gas Act 1992 was amended in May to enable regulations requiring more timely disclosure of a wider range of information by industry participants to allow more transparency over gas supplies. MBIE will consult on what information should be collected, how it would be accessed and used, and compliance costs. Regulations under the amended Gas Act could be in place by the end of 2026.[11]

Build reliability and resilience into the market

Measures to strengthen the regulatory framework for dry years include[12]:

giving the EA an explicit function relating to dry-year risk;
improving information available to market participants, and improving the rules and tools that support the management of dry-year risk; and
consulting on a proposed Winter Energy Reliability Obligation designed to strengthen incentives (and responsibilities) to procure, maintain or contract for long-duration firm energy.

Improve the business efficiency of electricity distribution business (EDBs)

Hon Simon Watts (then Minister for Energy) wrote to the EDBs on 6 October 2025 setting out his efficiency expectations and seeking views on improvements by 30 January 2026.[13] Several collaborative initiatives have since been announced.[14] If EDBs fail to meet milestones set by MBIE and the EA, then mandated efficiency measures will be implemented

Policy and regulatory certainty important

There is a lot underway to implement the energy package, but lingering uncertainties could jeopardise those gains.

An election year inevitably heightens concerns about policy reversals. The Government was expected to outline further decisions on tools to address sovereign policy risk in Q1 2026. No measures beyond the Gas Security Fund have been announced. A bipartisan energy strategy would have gone some way towards reducing sovereign risk.

Some key legislative and regulatory reforms underpinning the Government’s energy package remain outstanding. The Planning Bill and the Natural Environment Bill are still progressing through Parliament. The proposed amendments to the EIA have not yet been introduced, and we also await the amended GPS on electricity and gas transparency regulations.