Energy Security Outlook

The Energy Security Outlook (ESO) is a monthly report that helps track how secure New Zealand’s electricity supply might be over the next two years. It uses two key tools, the Electricity Risk Curves (ERCs) and Simulated Storage Trajectories (SSTs), to show how likely it is that we’ll have enough electricity, especially during dry periods when hydro lakes are low.

For more information on how it works and why it matters, we have published an 'ESO 101' document that covers how ERCs and SSTs help forecast electricity risks, what triggers action when supply looks tight, and how extra hydro storage can be used if needed.

Energy Security Outlook 101

August 2025 Energy Security Outlook

Energy Security Outlook - August 2025.pdf (PDF 3.57 MB)
The national controlled hydro storage position has declined rapidly since last month's update and sits at 77% of the historic mean at 25 August (down from 98% at 24 July). South Island storage is lower at 74%.
The Electricity Risk Curves (ERCs) have lifted for the first half of 2026 relative to the July update, predominantly due to a decrease in the gas production forecast. There was little change to the risk curves for the remainder of 2025 when the curves are set by the Alert and Emergency floors reflecting energy held in contingent hydro storage.
No Simulated Storage Trajectories (SSTs) cross the Watch curve in 2025. Eight of the 93 SSTs cross the Watch curve in January-July 2026. This assumes the third Rankine unit retires in January 2026 and the market supplements the existing coal stockpile at its maximum import capability to maintain increased thermal generation during low hydro inflows.
The market response earlier in 2025 to reduce hydro storage risk continues to be effective in limiting the impact of a rapid decline in hydro storage levels in recent weeks. Looking ahead to winter 2026, the risk to electricity supply can be decreased through hydro storage management and ensuring sufficient backup thermal fuel and capacity to support increased thermal generation under extended periods of low inflows.
In this month's scenario we look at the impact on the ERCs if the third Rankine unit were to remain available in 2026, which is currently awaiting Commerce Commission approval. This lowers the NZ Watch curve by up to 680 GWh and results in no SSTs crossing any ERCs.

The graphs below compare New Zealand and South Island controlled storage to the relevant Electricity Risk Status Curves.