Photo: AFP
The country's electricity regulator has laid out proposals to aid investment in renewable generation and to promote competition in the wholesale electricity market.
The Electricity Authority (EA) has released a consultation paper, putting forward a number of ideas for itself and other government entities.
It follows on from the EA's 2021 review of the wholesale market, and its move to prohibit large contracts unless certain conditions were met.
Among the proposals to keep wholesale generators in check, the EA would continue proactive monitoring and enforcement of trading in the spot market, and explore better information sharing processes and obligations with the Commerce Commission on information that may raise concerns about the market.
To help with new generation, the paper has proposed the Overseas Investment Office publish guidance for investors in renewable generation, and consider providing a help desk to support developers navigate the law.
It also suggested the Ministry of Business Innovation and Employment (MBIE) bring forward the completion of the [https://www.mbie.govt.nz/dmsdocument/20265-terms-of-reference-gas-transition-plan
gas transition plan], energy strategy and the New Zealand battery project.
Additionally, the paper proposes MBIE investigate the merit of providing "a one-stop shop for overseas investors in electricity generation".
"We believe the best way to promote a competitive market at the moment is to facilitate more and faster investment in new generation assisted by our enhanced monitoring of the
market and compliance with the Electricity Industry Participation Code," the EA's general manager of market policy Andrew Doube said.
"The entry or threat of entry by competitors is one of the most powerful forces to mitigate the exercise of market power and we are seeing a surge in investment interest from independent developers keen on pursuing new generation projects.
"We want to get the settings right to ensure as many of these projects see the light of day."
Doube said with around 400-500 megawatts of new supply or demand needed every year until 2050, it was important that any barriers to potential investment were addressed.
He was confident that a number of recently announced renewable projects would succeed and address the supply shortages.
"In addition to investment in new generation, the authority believes rigourous monitoring of trading conduct is vital to constrain the exercise of market power and the recent increase to the maximum penalty for breaches of the code to $2 million will help encourage compliance."
Doube said fundamental structural change was not justified and may lead to unintended consequences such as hindering the investment pipeline.
Feedback on the proposals close at the end of November.