24 Apr 2026
The electricity sector is responding to mitigate recent electricity supply challenges caused by the decline in natural gas and the transition to a more highly renewable electricity system, new Transpower analysis shows.
However, the draft annual Security of Supply Assessment (SOSA), released this week for electricity sector consultation, shows that this accelerated delivery of new generation and battery storage systems must continue into the 2030s to stay ahead of growing demand for electricity and mitigate risks like unplanned thermal outages or an even steeper decline in gas supplies.
Chief Executive James Kilty said Transpower produces the annual assessment of the balance between electricity supply and demand over the decade ahead to help guide investment decisions by the electricity sector and support management of security of supply risks.
“Last year’s assessment identified emerging risks for electricity supply this winter due largely to the faster than expected decline in natural gas availability in recent years,” Mr Kilty said.
“The draft assessment we are now consulting on indicates that the sector has taken a meaningful step toward mitigating these risks with new generation and battery storage systems coming online and efforts to secure additional gas supply.
“Immediate challenges remain around the potential for further reduced gas supply, risks around reliability of our aging thermal generation fleet and a repeat of the prolonged dry conditions we experienced in 2024 and early 2025, but the sector is working hard to stay ahead of them.
“For this year in particular we are entering winter with above average storage levels in New Zealand’s hydro lakes. Our key message is to maintain the investment momentum and ensure existing thermal generation remains available and sufficiently fuelled to respond to near term risks.”
Focus needed on delivery risk
Delivery risk is a key issue to manage over the medium-term with security of supply concerns reappearing in the early 2030s even if the existing pipeline of projects that are expected to proceed are delivered on schedule.
“This means the sector needs to lift the pace of new investment coming online over the medium-term, including committing earlier to new projects, to support increased demand growth and reduce our exposure to risks like lower gas supplies or ageing plant failure,” Mr Kilty said.
The assessment also puts focus on Transpower delivering its own programme of work in support of new generation and electrifying customers.
Mr Kilty said that Transpower has worked hard over the last 18 months to accelerate the connection and commissioning of new generation and batteries to the national electricity transmission grid and into local distribution networks.
The sector is on track to commission more than 1100 megawatts of generation, batteries and capacity upgrades this year, which will be a record, as the build phase of Aotearoa’s energy transition really picks up pace.
Notes for editors
Transpower prepares and publishes the Security of Supply Assessment (SOSA) annually in its System Operator role as required under the Security of Supply Forecasting and Information Policy (SOSFIP).
This assessment provides a ten-year view (2026 to 2035) of the balance between supply and demand in the New Zealand electricity system.
Market participants, policy makers and other stakeholders use it to inform risk management and investment decisions, including about development of new generation and transmission infrastructure.
The analysis uses electricity demand and supply forecasts to assess whether there will be enough energy and capacity to meet security standards over the coming decade. The Electricity Authority sets these energy and capacity security standards, and these represent an efficient level of reliability—that is, where the expected cost of electricity shortages is equal to the expected cost of new generation.
The assessment is based on existing electricity generation as well as planned generation at different stages of the development process.
Current and high-quality information from the electricity sector and other stakeholders on existing and future investment in generation, energy storage and demand response is a critical part of the development process.