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Energy supply and use

by Megan Cook

New Zealand produces abundant energy from renewable sources. Hydroelectricity is increasingly supplemented by power generated in wind farms. But the country still relies heavily on fossil fuels. Oil mined off the coast is of high quality and is shipped overseas – imported oil fuels the transport system.

Energy sources

Primary energy

In the early 2000s New Zealand’s energy came from fossil fuels such as oil, gas and coal, and from renewable sources – water, geothermal energy, wind and solar power, and wood. In 2008 primary sources of energy were:

  • oil – 37.7%
  • gas – 22.6%
  • geothermal power – 12.5%
  • water (hydroelectricity) – 11.3%
  • coal – 9.2%
  • other renewable energy, including biogas, wind, wood and solar power – 6.7%.



How much coal, gas or oil equals a petajoule? It depends on chemical make-up. One petajoule is the energy from 44,740 tonnes of sub-bituminous coal (the sort most commonly used in New Zealand), about 25 million cubic metres of gas from the Māui gas field, or 28 million litres of regular unleaded petrol. No matter how electricity is generated there are 278 gigawatt-hours of electricity to a petajoule.


Energy use

New Zealand’s annual energy use was not measured until the 20th century. In 1924 it was 86 petajoules (a measure of energy). By 2000 it was 772 petajoules. A much larger population and an industrialised economy demanded more energy.

Oil, and electricity produced from oil, coal, natural gas, geothermal power and water, became the dominant energy sources in the 20th century. After the First World War use of petrol and diesel transport and a growing range of electrically powered appliances became widespread. New Zealand’s manufacturing and industrial sectors were increasingly mechanised. From the late 1950s some very heavy power users were set up, such as fossil fuel-fed power stations and steel and aluminium smelters.

Government and energy distribution

The building of reticulation systems like power lines and the distribution of energy has been undertaken by private companies, local authorities and central government.

In the late 19th and early 20th centuries energy use was encouraged and controlled by local authorities and private companies. They were the suppliers of oil products, electricity, coal and coal gas. From the 1920s there was increasing government regulation of the energy sector. This was reversed in the 1980s and 1990s when successive governments removed controls in a bid to bring greater efficiency to the sector through competition. In 2007 energy was supplied by private companies, consumer trusts, municipally owned operations and state-owned enterprises.

Energy and climate change

At the end of the 20th century predicted climate change forced a new assessment of energy use and the resulting generation of greenhouse gases. The energy sector – including transport, electricity generation and heating – produced almost half of New Zealand’s greenhouse gas emissions in 2006, and was the fastest growing source of greenhouse gases, increasing emissions by 45% between 1990 and 2006.

New Zealand’s response to climate change varied from one government to the next. The 1999–2008 Labour-led government introduced mandatory targets and an emissions trading scheme. The National government elected in 2008 reopened the debate about targets.

Energy before the 20th century

Māori and energy

All agricultural, building and manufacturing work by Māori relied on muscle power. Goods, and occasionally people, were carried. Waka (canoes) were used for transport and were paddled, or when necessary pushed overland on skids.

Muscle power was supplemented with fire, geothermal heat and, to a lesser extent, wind and water power. Wood fires were used for cooking and heating, and for some manufacture, for example tree trunks were burnt out to make waka. Rama (lamps) were fire lit. People living in the central North Island used geothermal energy to cook food, and geothermally heated pools were bathing spots. Tainui Māori were reported to burn waro (coal).

Water was used to transport goods, for example moa killed inland were taken down by waka to a central butchering area at the mouth of the Waitaki River. Wind-powered sailing waka were also used.

Introduced energy

With Europeans came horses, bullocks, wheeled carts, sailing ships and widespread use of coal. Artificial light was provided by candles or simple lamps, made from or using tallow (animal fat), and camphene (distilled from turpentine made from tree resin). Kerosene distilled from petroleum became cheap enough for general use for both lighting and cooking from the late 1850s. Horses and bullocks carried goods, pulled carts, and were standard farm work beasts.

Cow girls


Johann Wohlers, a Ruapueke Island missionary, described the refusal of local Māori men to drive oxen (bullocks): ‘Men who could sail their boats on the high seas work with oxen! This was too much for their high pride … The girls however, did not consider it beneath them to occupy themselves with the oxen as the men did. They made good drivers, and the Maoris found it astonishingly convenient to have the things they used to bear on their backs carried for them.’1


Wind and water

Wind provided the power for sailing ships, the standard method of travel. Sail continued to be used until the end of the 19th century, alongside coal- and wood-fuelled steamships from the 1850s. Water drove machinery in factories and mills.


Wood was the main fuel for industrial and domestic purposes. Domestic heating, cooking and laundering, and commercial baking, brewing, candle and soap making, wool scouring, and tallow manufacturing all used wood. Industries like flax and timber milling, printing and the new dairy factories used wood-burning steam boilers.

Many people simply gathered wood from the bush or a beach. But people in towns bought their wood from fuel merchants. Some parts of the country were better supplied than others. Southland, Nelson and Wellington were well supplied and Auckland was richly supplied, while Otago and Canterbury had relatively little wood.



Selling wood was a common way of making ends meet, but the income was threatened when uncontrolled fires swept through the countryside in the 1880s. In Waimauku, north of Auckland, 200 tons of firewood was lost; near Masterton stacks of 200 cords (7,200 cubic metres) of wood were only saved when the wind dropped; at Seaward Bush in Southland several large woodstacks were destroyed.


The amount of wood used is not known, although an attempt was made to calculate it in the mid-1880s. Historian Rollo Arnold estimated around 3,000,000 tonnes of wood were used in 1885.


Like wood, coal was used for domestic heating and cooking, and to provide power for everything from factories to steam trains and ships. Coal was also used to make a gas known as ‘town gas’ or ‘coal gas’, which was used for lighting and cooking, heating water and buildings, and driving machinery.

Some communities had a local source of coal, and others brought it in. Domestic coal production in 1895 was 726,000 tonnes, and growing rapidly. By the time production levelled off, in 1912, it was over 2 million tonnes. Another 200,000 tonnes were imported.

    • Quoted in James Watson, Links: a history of transport and New Zealand society. Wellington: Ministry of Transport, 1996, p. 62. Back

Oil consumption

Oil use

After the late 1950s oil supplied more of New Zealand’s energy than any other source. The first big jump in use was between 1944 and 1954: consumption went from 30 petajoules each year to 59 petajoules (a petajoule is equal to 278 gigawatt hours of electricity). By 1974, 201 petajoules were used, and by 2007 it reached 283.5 petajoules per year.

Driving the mid-20th century shift in energy sources was the increasing price of coal – industry and transport moved to oil. Increasing use of road transport also pushed up oil use.

Oil consumers

Once refined, oil becomes many different products, including petrol, diesel and kerosene. Now used as aviation fuel, kerosene was widely used to light homes and workplaces, and sometimes for cooking and heating, in the late 19th and early 20th centuries. In some areas it continued to be used by households until the 1960s.

Farms, power stations, industrial sites, construction sites and households all used oil, but transport used the greatest proportion. In 2005 oil was used by:

  • transport – 84%
  • industry – 6.7%
  • agriculture – 4.9%
  • the commercial sector – 3.5%
  • the residential sector – 0.9%.

Yearly use of oil per person was about 1,570 litres, or 10 barrels in the early 2000s.

Oil companies

In the early 2000s New Zealand had four large oil companies: Mobil (started in 1896), Shell (1912), Caltex (1922) and BP (1946). All four had parent companies overseas.

There have been a number of smaller companies, including Europa, a discount supplier for several decades, heavily reliant on government protection – it was absorbed by BP in 1972. Another discount supplier, Gull, entered the New Zealand market in 1998 and was active in the North Island.

Lead in petrol


Early engines ‘knocked’ when cylinders detonated early. A lead additive in petrol was first introduced in 1933 to reduce knocking and improve fuel and engine efficiency. The lead was also highly poisonous; even low levels had an impact on human health. The additive was finally withdrawn from use in 1996.


Oil imports and refining

Oil importing began in the 1860s, and by 1890 had reached 5 million litres per annum. Most oil imported before the First World War was in the form of kerosene.

Petrol (known as benzine in the early 20th century) was imported in a refined form until the mid-1960s. The government built an oil refinery at Marsden Point, near Whangārei, in 1964, and crude oil imports began. The refinery supplied 67% of New Zealand’s fuel oil in 2007 – 15 to 20 tankers arrived in New Zealand ports each month, carrying oil for the Marsden Point refinery, crude oil and some refined products. Crude oil came from the Middle East (50–60%), and Asia or Australia (30–40%). Most refined oil came from Singapore and Australia. The remainder was locally produced. The Marsden Point refinery was shut down in 2022.

Local oil

Until the 1970s there was very little locally sourced oil. After that it was produced in significant quantities, but its high quality meant producers made more money exporting it. Oil imported for domestic use was lower-grade and cheaper.



LPG has no smell of its own and returns to gas form if it leaks. To avoid the danger of unnoticed leaks, the smell of rotten cabbage is added during LPG manufacture.



Liquid petroleum gas (LPG) is another form of oil energy. Produced in on- and offshore gas fields in Taranaki, LPG is a gas that becomes a liquid when compressed. Almost 180,000 tonnes of LPG were used in 2008 for heating, water heating, and cooking in homes and businesses. Approximately 10,000 cars were using LPG as a petrol substitute.

Oil storage and distribution

Distribution, pre-Second World War

Petrol (then known as benzine) and kerosene were first shipped in drums and tins, transported by horse and cart, and stored in warehouses. The large oil companies developed a bulk distribution system from the mid-1920s to the 1930s. They used tankers to freight oil to New Zealand, stored it in portside storage tanks, and distributed it in tankers by rail and road.

Ringside view


The explosive potential of oil was vividly demonstrated in 1904 when Colonial Oil’s Kaiwharawhara warehouse burnt to the ground. The 60,000 gallons of kerosene stored there produced scattered explosions and dense masses of smoke. With a southerly wind carrying the smoke away, people in the city had a clear view of ‘one of the finest spectacles ever presented in Wellington’.1


Marsden Point distribution

The government-built Marsden Point refinery and its pipelines were a significant development of the bulk distribution system. One pipeline carries aviation fuel to Auckland airport, and a 170-kilometre pipeline runs to the Wiri oil depot in South Auckland.

Oil storage

The Wiri terminal is the largest storage depot in New Zealand, with nine major steel storage tanks up to 39 metres in diameter and 20 metres high, and a number of other structures.

Ships from overseas and coastal tankers carry oil to New Zealand ports. Oil is held in bulk storage depots and can be drawn on by any of the four major companies, Mobil, Caltex, Z Energy (formerly Shell) and BP. The companies jointly manage stock levels and importing.

Gull, the smallest petrol company operating in New Zealand in 2009, imported and stored its oil independently, and had its own storage depot at Mt Maunganui.

Road tankers

Road tankers take oil from storage depots to petrol stations, and to large users, such as power stations using oil to generate electricity. They are operated by the petrol companies, independent distributors, and resellers.

Petrol stations

Until the mid-1920s blacksmiths, grocers, and stock and station agents sold petrol in 4-gallon (18-litre) tins and larger drums. Some of them also repaired the often unreliable early cars. In 1917 a Garage Proprietors Association was formed.

The first petrol pumps (‘bowsers’) were installed in 1926 when the large petrol companies were setting up their bulk distribution networks. The petrol was drawn from underground tanks. The number of petrol stations expanded very rapidly, often offering motorists a choice of brands.

From the early 1950s, petrol companies began to contract petrol stations to sell only their brand. Over time fewer petrol stations included car repairs as part of the business – by the late 20th century on-site car repair was not common in major cities, but petrol stations had begun selling a much wider range of food items, and some were like mini supermarkets.

In the early 2000s petrol stations, marina refuelling and farm delivery services supplied most of New Zealand’s petrol – 97% in 2007.

Petrol rationing

The government has imposed petrol rationing in times of shortage or very high import costs. Petrol was rationed because of shortages during both the First and Second World Wars, and rationing lasted beyond the war’s end. In 1979, during the second petrol price hike of the 1970s, the government introduced rationing again, and it remained in force for 18 months.

    • Evening Post, 10 September 1904, p. 5. Back

Electricity, late 19th to mid-20th century

First uses of electricity

Access to electricity in the late 19th and early 20th century was limited, though in 1879 football teams from Te Aro and Thorndon fought their way to a nil-all draw under electric arc lighting, and from 1883 Parliament was lit with 300 electric lights.

From 1888 cities and some towns used electricity for street lighting and trams. Many businesses and industrial enterprises set up their own generators, and so did some farms, but few households used electricity. In the 1920s the use of electricity for home lighting increased. By the mid-1930s electrical appliances were standard in the homes of the better-off. After the Second World War they became common in all households.

Street-light envy


In 1889 Wellington became the first city in the southern hemisphere to use electric street lighting. William Skey, petrologist and poet, wrote: ‘Tonight a thousand suns resplendent shine, from Lambton’s curve to Newtown’s far confine’. Aucklanders, who were to wait another 19 years for electric street lighting, were less impressed. Wellington’s lights, huffed the Star, had the feeble power of a ‘fat and healthy glow worm’.1


Electricity consumption

In 1924, when national use was first reliably calculated, New Zealand’s electricity consumption was one petajoule – equivalent to the energy provided by around 28 million litres of regular unleaded petrol. By 1964 consumption was 30 petajoules and in 1988 it reached 94 petajoules. By 2007 it was 140.5 petajoules.

In 2007 industry consumed the most electricity, although there were more residential than industrial users. In that year:

  • 1.6 million residential users consumed 33% of total power – or 7.84 megawatts per household
  • 191,000 commercial users consumed 23.3% – or 47 megawatts each
  • 116,000 industrial users consumed 43.6% – or 145 megawatts each.

Electricity supply and transmission

Central government control of reticulation (supply and transmission) of electricity was established in a series of laws passed from the 1860s. At first local authorities, private companies and, in one instance, the Tourism Department, supplied and transmitted electricity. In 1918 they were joined by local electric power boards.

Meaty power


The Southland Frozen Meat Company was one of New Zealand’s more unusual electricity suppliers. The Bluff works supplied that town from 1903. The Mataura works supplied first Gore from 1905, and then Mataura itself from 1912. The company continued its electrical supply sideline until 1933.


In the decades immediately before and after the First World War, local authorities and central government began to set up the national grid, the transmission system needed to carry power to homes and workplaces.

Coverage in cities and towns

All New Zealand’s cities and many towns were connected to the grid and reticulated by 1920. Urban industrial and commercial users were attracted to the comparative cheapness, efficiency and cleanliness of electricity.

From the 1920s suppliers vigorously encouraged the domestic use of electricity. Showrooms displayed the latest appliances, cooking classes were held, and the cleanliness and convenience of electricity was highlighted.

Coverage in rural areas

In the 1920s and 1930s closely-settled and well-to-do farming areas, particularly those next to cities or large towns, were connected, but reticulation of remote hilly areas and the back country did not take place until after the Second World War.

Mandeno’s clothesline


The single wire earth return (SWER) wiring system was developed specifically for country reticulation. Known as ‘Mandeno’s clothesline’, after its developer Lloyd Mandeno, its cabling was No. 8 fencing wire. Mandeno’s clothesline was remarkably successful, and used in a number of other countries, particularly Australia.



There was a flat-rate charge for electricity at first, but meters became standard from 1908. There was no consistency in pricing from one area to another, and the price range was great.


Electricity wasn’t available all day at first, even in areas with good supply and transmission systems. It was standard to supply only from dusk to midnight. Rotorua had electricity from dusk to midnight from 1901; time was extended bit by bit, and by 1913 it had electricity 24 hours a day, except on Sundays.

In the late 19th and early 20th centuries supply was commonly interrupted by inadequate or failing generation and transmission equipment. Once the system was further developed, power cuts more often resulted from stormy weather or supply shortages. During the Second World War power was rationed, and in some areas there were compulsory blackouts.

    • Quoted in Neil Rennie, Power to the people. Wellington: Electricity Supply Association of New Zealand, 1989, p. 35. Back

Electricity after the Second World War

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.

Pole axed

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.

Coal and coal gas

Coal energy

Coal reserves provided much of New Zealand’s energy in the 19th and early 20th centuries. Coal gas lit streets, homes and workplaces, and both coal and coal gas provided domestic heating and cooking. The power for industrial and manufacturing machinery came from coal and coal gas, and generators were run on them when electricity was introduced. Coal also powered trains and coastal shipping.

Coal supplied 45% of energy in the 1940s, but by the early 1970s it supplied less than 20%. The move away from coal was driven by cost and convenience. In 1950 the government stopped subsidising the price of mined coal. The following year, industrial unrest resulted in an uncertain supply. As coal prices rose, rail transport switched to diesel, and the use of road transport increased.

Many households switched to electricity because coal is a dirty fuel, and coal gas smells. Regardless of how electricity was generated it remained subsidised – so for users it was cheaper as well as cleaner.


Over the 20th century, use of coal bounced between 50 and 75 petajoules a year. (A petajoule is equivalent to the energy provided by around 28 million litres of regular unleaded petrol.) In 1924, 75 petajoules were used; in 1988, 58 petajoules; and in 2007, 69 petajoules.

Coal use in 2007 was 3.1 million tonnes. Consumption was through:

  • power generation and industrial use – 65%
  • other uses – 26%
  • commercial use – 6%
  • agricultural, transport and residential use – 3%.

The two biggest users were the Huntly power station, which used up to 2.5 million tonnes a year, and the Glenbrook steel mill, which used 800,000 tonnes a year. Coal consumption is strongly related to the supply of electricity. Thermal power stations, running on coal or gas, back up hydro generation.


In the 19th century coal was mined then transported by rail and coastal shipping. It was taken to homes and businesses by horse and cart. Some rail and shipping companies which were big users of coal owned coal mines.

Coal gas

Coal was converted into a gas used for lighting, heating and cooking. Known as ‘coal gas’ or ‘town gas’, it was widely used in England and Europe, so it was a familiar fuel to many settlers. In New Zealand it was provided by local authorities and private companies from the 1860s on. By 1916 there were gasworks in 56 cities and towns.

Gaslight blackguard


In the 19th century, Dunedin’s coal gas provoked argument and even fighting. The elaborate lamp posts used for street lighting were ridiculed. Residential users objected to the cost of the gas, and the quality and pressure were defective. Municipal or private ownership of the gasworks was an election issue, and the subject of a referendum. A gas company associate threatened a councillor with a thrashing, telling him he was a ‘damned low blackguard’1, and a court case resulted. Argument over coal gas led to a wild brawl in the council chamber.


Distribution of coal gas

Coal gas needed a reliable supply of good-quality bituminous coal. Coal was sourced locally and from Australia. Gas was stored in ‘gasometers’. These large, circular storage tanks could telescope up and down depending on how full they were. From the gasometer, gas was transmitted through underground pipes. Trained gas engineers and fitters were required to lay them.

Reticulating for gas (laying out the pipe system) was expensive, and many areas were never supplied.

The end of coal gas

Although coal gas continued to be supplied until the 1970s, users preferred electricity. By 1920 electricity had taken over street lighting. Municipal gas departments fought a losing battle to persuade housewives to continue to use gas rather than electric stoves from the 1920s.

By the end of the Second World War the decline in the residential use of coal was irreversible. Residential use was maintained only because the government was facing a serious shortage of electricity, and could not supply those still using coal gas. By the early 1960s electricity supply had increased, and coal-gas use declined. It was eventually replaced by natural gas.

    • Quoted in K. C. McDonald, City of Dunedin: a century of civic enterprise. Dunedin: Dunedin City Corporation, 1965, p. 124. Back

Natural gas

New Zealand’s natural gas is a fossil fuel, often found with oil. It has been found in Taranaki inland and offshore – the huge Māui field is the most significant deposit.

Consumption and cost

In 1974, 21 petajoules of natural gas were used. (A petajoule is equivalent to the energy provided by around 28 million litres of regular unleaded petrol.) By 1984 use had increased to 89 petajoules. In 2007, 162 petajoules were used.

Most natural gas is used for industrial purposes. In 2007, 94% of natural gas was used for:

  • electricity generation – 59%
  • methanol and ammonia/urea production – 15%
  • commercial use – 3%
  • residential use 3%
  • unspecified uses – 20%.

In 2007 natural gas cost industrial users $6.30 per gigajoule, commercial users $16.10 per gigajoule, and residential users $35 per gigajoule.


Natural gas is transmitted at a higher pressure than coal gas, and was not able to be used in the existing gas reticulation system without considerable adjustment and the installation of new mains. New steel-walled pipes were welded, and X-rayed to ensure that there were no leaks. Natural gas is odourless and highly flammable – odour was added so leaks would be noticed.

Sticky problem

In the first three years of transmission up to 47% of natural gas was lost through leakage from the piping system. Coal gas has a high tar content, and had sealed damaged areas of pipe as it passed through them. Natural gas dried out these areas. The problem was solved by threading plastic piping through the existing metal pipes.

Industrial and domestic appliances that had used coal gas also had to be converted for use with natural gas. In the Hutt Valley and Porirua alone this meant adjusting 9,000 appliances.

Government and natural gas

Natural gas was managed and distributed by the Natural Gas Corporation (NGC), set up by the government in 1967. In 1978 NGC became part of the state-owned enterprise Petrocorp, which was privatised in 1987. The government deregulated the gas industry as a whole in 1992. Price controls and gas franchise areas (which had defined supply and distribution) were eliminated.

Transmission in 2007

In 2007 two transmission companies, Vector and Maui Development, used more than 3,400 kilometres of high-pressure pipelines to send natural gas throughout the North Island. From high-pressure pipelines, the gas went into 2,800 kilometres of intermediate- medium- and low-pressure pipelines which served local areas.

CNG and synthetic petrol

In the 1980s the government subsidised use of compressed natural gas (CNG), and built the Motunui synthetic petrol plant. It was seeking to use New Zealand’s abundant natural gas to reduce dependence on imported oil.

CNG can be used as a petrol substitute in cars. Once subsidies were removed in 1987, CNG use dropped significantly. The Motunui plant, one of the government’s ‘Think Big’ projects, opened in 1986. It converted natural gas to methanol and then to synthetic petrol. When oil prices fell, the plant switched and produced methanol for export. Production ceased in 2004 and the plant was mothballed.

Renewable energy

With nearly a third of its primary energy supplied from renewable sources, New Zealand does well by international standards – in 2007 the only developed countries using more were Norway and Iceland. New Zealand has abundant hydro, geothermal, and wind resources. Solar power and wood resources are also available.


Most renewable energy resources are used to generate electricity. In 2007, 68% of electricity was generated by renewable sources:

  • hydro – 58%
  • geothermal – 4.9%
  • wind – 3.5%
  • biogas and biomass – 1.3%.

Historically, the major form of renewable energy used in New Zealand has been hydroelectricity, joined from 1958 by geothermally generated electricity.


First considered as a source of electricity in the early 1900s, geothermal energy was not used until after the Second World War, when chronic electricity shortages and a two-year drought in the mid-1940s made generation critical. Wairākei, the first geothermal station, proved to be a very reliable generator. By the end of the 20th century, eight geothermal stations had been built.

Although renewable, geothermal energy is not an efficient generator of electricity. The 10 petajoules of electricity it produced in 2007 used 87 petajoules of geothermal power.


Wind generation is the fastest growing of the new renewables. Capacity in mid-2008 was 320 megawatts, of which 151 megawatts came online during 2007.

Wellington was home to the first large-scale wind turbine. Generating 225 kilowatts, it was connected to the grid in 1993. Hau Nui, the first wind farm, began generating electricity in the Wairarapa in 1997. Micro-turbines generating 1.5 kilowatts have also been used in urban areas.


By 2007 use of solar energy to heat water and, via photovoltaic technology, charge batteries for power supply systems was no longer unusual. Although difficult to track, use was clearly growing. Sales of solar water heating systems suggest that use almost doubled between 2002 and 2007.

Home generation

In the early 2000s increasing numbers of people began producing their own electricity, using small-scale hydro, solar and wind generation systems. By 2009 power companies were setting up reciprocal relationships with these home generators, allowing them to both take from, and supply energy to, the grid.

The number of people undertaking home generation remained minute. The initial cost was considerable and the potential technical difficulties were off-putting for many.

Go it alone


Some farms have been generating their own electricity for over 100 years. It was first done with small hydro generators because there was no national grid. Later, distance from the grid became an issue. Hydro was joined by solar and biogas generators, providing power to trampers, Department of Conservation workers, farmers, lighthouses, and isolated holiday-makers.



Biodiesel is an oil substitute made from vegetable oil, tallow (a byproduct of the meat industry) or ethanol. Biodiesel/fossil fuel diesel blends became available at the petrol station pump on a limited basis in 2007.


Biogas, produced by sewage treatment plants, farm waste, and the food processing industry, has been generating electricity, heat and vehicle fuel for decades. It is generally used on-site by the producers.

Landfill gas generated in local rubbish dumps became a usable and renewable resource in 1992. Dumps in Auckland and Wellington were first to use the gas to generate electricity, followed by sites in or near Rotorua, Hamilton, Christchurch and Palmerston North. Total capacity in 2007 was over 20 megawatts.

From 2004 all new landfills collecting over 1 million tonnes of refuse over their planned life were required to collect their landfill gas, which is used to generate electricity, or reticulated for use by local industry, community facilities or nearby households. A significant portion of methane is flared, as 95% of electricity generated with landfill gas is produced at only three sites. Flaring burns off the methane, and leaves a carbon dioxide residue – methane leaking from rubbish is about 21 times more powerful as a greenhouse gas than carbon dioxide.


Most biomass is ‘black liquor’ and wood residues produced by the timber and pulp and paper industries. Amongst New Zealand’s largest power consumers, these industries produce waste that can then be burnt to provide heat for further processing.

Wood continues to be used by households as a source of home and water heating. Average yearly use in the 2000s was 13.7 gigajoules per home.

Marine wave and current energy

Research into sources of renewable energy is ongoing. The possibility of using tidal, current or wave movements to generate electricity was being investigated in the early 2000s.

Hononga, rauemi nō waho

More suggestions and sources

How to cite this page: Megan Cook, 'Energy supply and use', Te Ara - the Encyclopedia of New Zealand, (accessed 17 June 2024)

He kōrero nā Megan Cook, i tāngia i te 11 o Māehe 2010