The Government has announced a comprehensive review of the electricity market to assess its ability to deliver reliable and affordable energy to households and businesses.

This review comes in response to challenges highlighted during the past winter’s power crisis.

Energy Minister Simeon Brown and Associate Energy Minister Shane Jones emphasised the importance of ensuring the market supports economic growth while meeting future electricity demands.

“New Zealand’s economic growth and prosperity rely on Kiwi households and businesses having access to affordable and secure electricity at internationally competitive prices,” said Mr Brown.

The review will focus on areas such as investment in infrastructure, market competition, and effective regulation.

Key objectives include fostering timely investment in electricity generation and infrastructure, achieving efficiency, and maintaining competitive wholesale and retail markets to manage costs effectively.

Mr Jones noted that with increasing electrification across sectors, demand for electricity is expected to grow significantly.

"We have already made significant progress in enabling investment in renewable electricity generation," he said, adding that effective regulation would play a critical role in maintaining market confidence.

The terms of reference released for the review outline four key principles for an effective electricity market:

• Incentivising investment to meet current and future demand.
• Achieving efficiency across production and allocation.
• Ensuring competitiveness to keep costs manageable.
• Regulating markets where competition is not feasible.

The Government recently introduced the first Government Policy Statement on electricity to clarify its role in the sector.

The upcoming review will complement ongoing efforts to strengthen energy security and manage electricity prices.

The review is set to commence early next year.