Energy security outlook

June 2025 Energy Security Outlook

Energy Security Outlook - June 2025.pdf (PDF 3.61 MB)
The national controlled hydro storage position has slightly improved since last month's update and now sits at 93% of the historic mean as of 22 June 2025.
The NZ Electricity Risk Curves (ERCs) for July and August 2025 and January to August 2026 have dropped relative to the May update. This is primarily due to increased gas production forecasts, along with a higher coal stockpile and increased starting storage at Ahuroa since last month.
The ERCs and Simulated Storage Trajectories (SSTs) in this update include the purchase of gas from industrial users by electricity generators, as per the Methanex/Contact deal ending in June / early July, and the announced early return of NZAS load on 11 August, as agreed with Meridian to shorten the current demand response.
No SSTs cross the Watch curve in 2025. 11 of the 93 SSTs cross the watch curve in January to July 2026. This assumes the market supplements the existing coal stockpile at its maximum import capability to maintain increased thermal generation during low hydro inflows.
The gap between the firmly contracted coal imports and the assumed maximum capability from the start of June through to the start of November is equivalent to 166 kT of additional coal orders.
While the market has responded to reduce hydro storage risk in 2025, continued focus on hydro storage management and ensuring sufficient backup thermal fuel availability will support an increased thermal generation response under extended periods of low inflows over winter.
Our base case Electricity Risk Curves (ERCs) for June assume that a Rankine unit at Huntly will be retired in January 2026 as indicated in Genesis's FY25 Q3 Performance Report. The Rankine Remains scenario examines the impact on ERCs (relative to the base case assumptions) if all Rankine units were to remain available. This lowers the New Zealand Watch curve by up to 632 GWh in May 2026 and results in one SST reaching the Watch curve in 2026.