Demand for electricity increased rapidly after the Second World War, driven by an expanding economy and increased household use of electrical appliances.
Central government developed supply, building a chain of new power stations. Many were hydroelectric, but in 1958, Wairākei, the first of several stations driven by fossil fuel or geothermal power, began generating electricity. In 1984 there were eight fossil fuel-powered stations, generating almost a fifth of all electricity.
Subsidies from the Rural Electrical Reticulation Council ensured that reticulation was extended to hilly and back country areas. In 1965 the transmission grid began operating nationally when the Cook Strait cable joined New Zealand’s two main islands and began transmitting power from the south to the north.
Supply and transmission
In the second half of the 1980s the government reorganised its energy interests, aiming for greater efficiency in costs and use. The Electricity Division of the Ministry of Energy, which had managed generation and transmission of electricity, was replaced by the Electricity Corporation of New Zealand (known as Electricorp or ECNZ) – an independent but state-owned enterprise. Price controls were removed. Many local supply authorities merged, and many became corporatised.
Transpower, which owned and managed the national grid, was separated from Electricorp in 1994. In the second half of the 1990s the government split Electricorp into four independent energy suppliers – Contact Energy, Meridian Energy, Mighty River Power and Genesis Energy – to introduce competition into the electricity market.
Distribution in the early 2000s
In 2008 there were five major generation companies, 28 distribution companies, and 10 retail companies. Some companies were both generating and retailing electricity.
Electricity generators offered electricity to the market, and retailers and large end-users bid to buy the electricity at prices set half-hourly – the ‘spot market’. Transpower took electricity from generators to each large user and local market. At the national grid exit point, electricity transmission was taken over by one of the distribution companies. They carried electricity to the customer, who bought it through a retail company.
Reticulation in the early 2000s
In 2007 New Zealand’s reticulation system included 56,000 kilometres of overhead lines, and 39,000 kilometres of underground cables. There were 80 kilometres of submarine cables, including one crossing Cook Strait. Transformer capacity was 30,000 megavolt-amperes.
In 2008 the Auckland areas of North Shore City, Waitākere City and Rodney had 64,900 power poles. Poles got hit by cars around 130 times a year. Some accidents caused serious injury to people, the car or the pole, but it’s aesthetics rather than motor vehicles that will finally get the poles, as more and more lines are laid underground.
Failure of electricity supply
From the end of the Second World War until the early 1960s – when supply finally caught up with demand – blackouts were common.
Storms or droughts continue to cause power failures, and sometimes rationing. In 1973 and 1974 the government rationed electricity after droughts in the previous year lowered lake levels limiting hydroelectrical output in the North Island. At the same time an abrupt rise in oil prices meant that the cost of running oil-powered stations skyrocketed.
Equipment failure also interrupts supply. In 1998 the four cables feeding Auckland’s central city district all failed, and for over a month the business zone in the country’s biggest city was without power. This event highlighted the importance of investing in new equipment, and provoked questioning of the market model pursued by governments.