REFERENCE CODE GDPE0765ICR PUBLICATION DATE M ARCH 2015 NEW ZEALAND POWER MARKET OUTLOOK TO 2025, MARKET TRENDS, REGULATIONS AND COMPETITIVE LANDSCAPE

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1 REFERENCE CODE GDPE0765ICR PUBLICATION DATE M ARCH 2015 NEW ZEALAND POWER MARKET OUTLOOK TO 2025, MARKET TRENDS, REGULATIONS AND COMPETITIVE LANDSCAPE

2 Executive Summary Hydropower Dominates New Zealand s Power Mix Hydropower was the dominant source of electricity in 2014, accounting for XX% of New Zealand s installed capacity. Thermal power, consisting of coal, gas, and oil sources, accounted for XX% of installed capacity in 2014 and was followed by renewable power, which contributed the remaining XX%. Wind and geothermal power are the predominant varieties of renewable power in New Zealand. Hydropower is a mature technology in the country, and most of the existing potential sites are not under consideration for future development, owing to public concern over the environmental impact of hydropower resource exploitation. As a result, the share of hydropower in the power mix may decrease further in the future, but it will remain the dominant power source. Power Market, New Zealand, Cumulative Installed Capacity by Fuel Type (%), 2014 New Zealand Power Consumption and Generation, Annual power generation increased from XX Terawatt hours (TWh) in 2000 to XX TWh in 2014, at a Compound Annual Growth Rate (CAGR) of XX%. Annual power consumption also increased, from XX TWh to XX TWh, at a CAGR of XX%, owing to a rise in demand from the industrial sector. Power Market, New Zealand, Annual Power Consumption and Generation (TWh), Annual power consumption and generation (TWh) Annual power consumption Annual power generation Source: GlobalData, Power Database [Accessed on February 19, 2015] Large hydro and pumped storage Thermal Renewable Source: GlobalData, Power Database [Accessed on February 19, 2015] 2

3 Table of Contents 1 Table of Contents 1 Table of Contents List of Tables List of Figures Introduction GlobalData Report Guidance New Zealand, Power Market, Snapshot New Zealand Power Market, Macroeconomic Factors New Zealand, Power Market, Supply Security New Zealand, Power Market, Generation Infrastructure New Zealand, Power Market, Transmission Infrastructure New Zealand, Power Market, Opportunities New Zealand, Power Market, Challenges New Zealand, Power Market, Market Analysis New Zealand, Power Market, Supply Structure New Zealand, Power Market, Leading Power Generation Companies New Zealand, Power Market, Financial Deals Deal Volume and Value Analysis, Deals by Type, New Zealand, Power Market, Demand Structure Consumption by Sector, Q New Zealand, Power Market, Regulatory Scenario

4 Table of Contents 5.1 New Zealand, Power Market, Key Electricity Policies Electricity Industry Act Renewable Energy Policy New Zealand, Power Market, Capacity and Generation Overview New Zealand, Power Market, Cumulative Installed Capacity by Fuel Type, New Zealand, Power Market, Share in Cumulative Installed Capacity by Fuel Type, 2014 and New Zealand, Power Market, Power Generation by Fuel Type, New Zealand, Power Market, Transmission and Distribution Overview New Zealand, Power Market, Transmission Overview New Zealand, Power Market, Distribution Overview New Zealand, Power Market, Competitive Landscape: Snapshot of Leading Power Generating Companies Key Company in the New Zealand Power Market: Contact Energy Limited Company Overview Business Description SWOT Overview Appendix Market Definitions Power Installed Capacity Electricity Generation Electricity Consumption

5 Table of Contents Thermal Power Plant Hydropower Plant Nuclear Power Renewable Energy Resources Abbreviations Bibliography GlobalData s Methodology Coverage Secondary Research and Analysis Primary Research and Analysis Disclaimer

6 Table of Contents 1.1 List of Tables Table 1: Power Market, New Zealand, Gross Domestic Product ($bn), Population (million) and Annual Power Consumption (TWh), Table 2: Power Market, New Zealand, Deal Value ($bn) and Number of Deals, Table 3: Power Market, New Zealand, Deals by Type (%), Table 4: Power Market, New Zealand, Annual Power Consumption (TWh), Table 5: Power Market, New Zealand Power Consumption by Sector (%), Q Table 6: Power Market, New Zealand Energy Efficiency and Conservation Strategy, Table 7: Power Market, New Zealand, Cumulative Installed Capacity by Fuel Type (MW), Table 8: Power Market, New Zealand, Share in Cumulative Installed Capacity by Fuel Type (%), 2014 and Table 9: Power Market, New Zealand, Power Generation by Fuel Type (GWh), Table 10: Power Market, New Zealand, Transmission Line Length (Ckm), Table 11: Power Market, New Zealand, Distribution Line Length (Ckm), Table 12: Power Market, New Zealand, Contact Energy Limited, SWOT Analysis, Table 13: Abbreviations

7 Table of Contents 1.2 List of Figures Figure 1: Power Market, New Zealand, Gross Domestic Product ($bn) and Annual Power Consumption (TWh), Figure 2: Power Market, New Zealand, Deal Value ($bn) and Number of Deals, Figure 3: Power Market, New Zealand, Deals by Type (%), Figure 4: Power Market, New Zealand, Annual Power Consumption (TWh), Figure 5: Power Market, New Zealand, Power Consumption by Sector (%), Q Figure 6: Power Market, New Zealand, Cumulative Installed Capacity by Fuel Type (MW), Figure 7: Power Market, New Zealand, Share in Cumulative Installed Capacity by Fuel Type (%), 2014 and Figure 8: Power Market, New Zealand, Power Generation by Fuel Type (GWh),

8 Introduction 2 Introduction New Zealand has developed from an agrarian economy into a more industrialized one in the past XX years. It is an island nation and has a parliamentary democratic form of government, which is governed by the country s cabinet. It is a member of the United Nations, the Asia-Pacific Economic Corporation, the Financial Action Task Force, the International Atomic Energy Association and the United Nations Industrial Development Organization. New Zealand s economy is liberalized, and the country attracts a fair amount of foreign direct investment. The US, Australia and China are among its major investors. The government is endeavoring to strengthen existing trade relationships with other nations and is in talks with India over the formulation of a free trade agreement. This is due to its still being dependent on imports for machinery, transportation equipment and other heavy industrial goods. New Zealand s Gross Domestic Product (GDP) increased at a rate of XX% in 2014 to $XX billion, at constant prices. Its economy depends on exports and was affected by the global economic recession, declining at a negative rate of XX% in However, in 2010 it emerged from the global downturn and registered a growth rate of XX%. In 2012, its growth was even higher, at XX% over 2011 (IMF, 2014). New Zealand remains vulnerable to weak external demand for its key exporting sectors. Therefore, the government is now focusing on developing industrial infrastructure to raise domestic productivity. Hydropower is the primary source of power generation, contributing XX% of installed capacity in 2014, while thermal power is perceived predominantly as a backup power, contributing XX%. Renewable energy accounted for XX% of installed capacity. The country is self-sustained in meeting its electricity demand and does not share any cross-border grid connections or sub-sea cables with other countries. New Zealand is expected to record substantial growth in the wind energy segment, both onshore and offshore, as the average price of power generated from wind sources are now lower than the average price of power generated from gas sources. 9

9 Introduction 2.1 GlobalData Report Guidance The executive summary captures the key growth trends in the New Zealand power market. Chapter three provides a snapshot of the key parameters that affect the country s power sector, as well as key points about the power market. Chapter four provides a power market analysis for New Zealand. Chapter five provides details of the regulatory scenario for the power market and the inward foreign investment scenario in New Zealand. Chapter six provides information regarding New Zealand s cumulative installed capacity and annual generation trends, as a whole and by individual generation source. Chapter seven describes the power transmission and distribution infrastructure in New Zealand and includes information on interconnectors with neighboring countries. The section also covers electricity imports, exports and upcoming grid-related projects in New Zealand. Note: All 2014 market numbers provided in the report are estimates, except where actual data were available. 10

10 Market Analysis Consumption by Sector, Q The transport sector is the largest power-consuming sector and in Q accounted for an estimated XX% of consumption, followed by the trade, commerce and other services sector, with XX%. The residential sector accounted for XX%, and the industrial sector accounted for XX%. Figure 5: Power Market, New Zealand, Power Consumption by Sector (%), Q Other Industrial Transport Trade, commerce, and other services Residential Source: GlobalData Table 5: Power Market, New Zealand Power Consumption by Sector (%), Q Sector Industrial Trade, commerce, and other services Residential Transport Other Source: GlobalData Share 22

11 Capacity and Generation Overview 6 New Zealand, Power Market, Capacity and Generation Overview Hydropower was the dominant source of electricity in 2014, accounting for XX% of the country s installed capacity. Thermal power contributed XX% of installed capacity, followed by renewable power, which contributed the remaining XX%. Wind and geothermal power are the predominant sources of renewable power. Hydropower is a mature technology in the country, and most existing potential sites are not under consideration for future development, owing to public concerns related to the environmental impact of hydropower resource exploitation. Owing to this, the share of hydropower in the power mix may decrease further. Nevertheless, it will remain the dominant power source. 6.1 New Zealand, Power Market, Cumulative Installed Capacity by Fuel Type, New Zealand s installed capacity was XX Megawatts (MW) in Large hydro and pumpedstorage power is the largest source in terms of capacity, followed by thermal and renewable power. New Zealand s installed large hydro and pumped-storage capacity increased from XX MW in 2001 to XX MW in 2014 and is expected to reach XX MW in Installed thermal capacity increased from XX MW in 2001 to XX MW in It is expected to increase at a CAGR of XX% to XX MW in Installed renewable capacity increased from XX MW in 2001 to XX MW in 2014 and is expected to reach XX MW in 2025, increasing at a CAGR of XX%. 25

12 Capacity and Generation Overview The following figure and table show New Zealand s installed capacity, by fuel type, in the period. Figure 6: Power Market, New Zealand, Cumulative Installed Capacity by Fuel Type (MW), Cumulative installed capacity (MW) Source: GlobalData, Power Database [Accessed on February 18, 2015] Large hydro and pumped storage Thermal Renewable 26

13 Appendix 9 Appendix 9.1 Market Definitions Power Power refers to the rate of production, transfer or energy use, usually related to electricity. It is measured in Watts (W) and expressed in kilowatts (kw), Megawatts (MW) or Gigawatts (GW). It is also known as real or active power Installed Capacity Installed capacity refers to the generator s nameplate capacity as stated by the manufacturer, or the maximum rated output of a generator under given conditions. It is given in Megawatts (MW) on a nameplate affixed to the generator Electricity Generation Electricity generation refers to the process of generating electricity from other forms of energy. It also refers to the amount of electricity produced, expressed in Gigawatt hours (GWh) or Terawatt hours (TWh) Electricity Consumption Electricity consumption is the sum of electricity generated, plus imports, minus exports and transmission and distribution losses. It is measured in Gigawatt hours (GWh) or Terawatt hours (TWh) Thermal Power Plant A thermal power plant is a plant in which turbine generators are driven by burning fossil fuels Hydropower Plant A hydropower plant refers to a plant in which the turbine generators are driven by falling water Nuclear Power Nuclear power refers to the electricity generated by the use of thermal energy, released from the fission of nuclear fuel in a reactor. 41

14 Appendix Renewable Energy Resources Renewable energy resources are those that provide energy that is naturally replenished but limited in the amount of energy that is available per unit of time. Biomass, geothermal, solar, small hydro and wind are examples of renewable resources. 9.2 Abbreviations Table 13: Abbreviations CAGR Ckm FDI GDP GW GWh kv kw MW NPS REG NZEECS TWh Source: GlobalData Compound Annual Growth Rate Circuit kilometer Foreign Direct Investment Gross Domestic Product Gigawatt Gigawatt Hour kilovolt kilowatt Megawatt National Policy Statement for Renewable Electricity Generation New Zealand Energy Efficiency and Conservation Strategy Terawatt hour 9.3 Bibliography CIA (2014). New Zealand: The World Factbook. Central Intelligence Agency. Available from: [Accessed on February 18, 2015] EECA (2011). New Zealand Energy Strategy : Developing our energy potential, and the New Zealand Energy Efficiency and Conservation Strategy Ministry of Economic Development, August Available from: 42

15 Appendix IMF, World Economic Outlook Database [database], International Monetary Fund, Available from: 000&ey=2019&scsm=1&ssd=1&sort=country&ds=.&br=1&c=196&s=NGDP_R%2CNGDP_RP CH%2CNGDP%2CNGDPD%2CLP&grp=0&a= [Accessed on February 18, 2015] MBIE, Electricity Data tables [database], Ministry of Business, Innovation and Employment, October 18, Available from: [Accessed on February 18, 2015] 9.4 GlobalData s Methodology GlobalData s dedicated research and analysis teams consist of experienced professionals with backgrounds in marketing, market research and consulting in the power industry, and advanced statistical expertise. GlobalData adheres to the codes of practice of the Market Research Society ( and the Strategic and Competitive Intelligence Professionals ( The following research methodology is followed for all country outlook reports Coverage This report gives detailed information on New Zealand s power market. It examines New Zealand s power market structure and provides historical and forecast numbers for generation, capacity and consumption up to The report provides insights into the market s regulatory structure, import and export trends, competitive landscape and leading active and upcoming power projects Secondary Research and Analysis The capacity, generation and consumption data is collected and validated using a number of secondary resources, including, but not limited to: Government agencies, ministerial websites, industry associations, the World Bank, statistical databases Company websites, annual reports, financial reports, broker reports and investor presentations Industry trade journals, market reports and other literature 43

16 Appendix GlobalData s proprietary databases, including the Capacity and Generation Database, the Power Plant Database and the Transmission and Distribution Database In addition to this, the following secondary information is collected and analyzed to project New Zealand s power market scenario through until 2030, analyzing factors such as the following: New Zealand s macro-economic scenario Government regulations, policies and targets Government and private sector investments Contract and deal announcements Utility expansion plans The sector s historic track record Other qualitative insights built through secondary research and analysis of company websites, annual reports, investor presentations, industry and trade journals, and data from industry associations Primary Research and Analysis Secondary research is further complemented through primary interviews with industry participants to verify and fine-tune the market numbers obtained through secondary research and get first-hand information on industry trends. The participants are drawn from a diverse set of backgrounds, including equipment manufacturers, industry associations, government bodies, utilities, distributors, and academia. The participants include, but are not limited to, C-level executives, industry consultants, academic experts, business development and sales managers, purchasing managers, plant managers, government officials, and industry spokespeople. 44

17 Appendix 9.5 Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData. This report is a licensed product and should not to be reproduced without prior permission. 45