New Zealand’s future electricity demand is set to increase significantly, according to a recent report by the Ministry of Business, Innovation and Employment (MBIE).

The Electricity Demand and Generation Scenarios (EDGS) report highlights a substantial rise in electricity usage due to a shift from fossil fuels, the uptake of electric vehicles, and new demands like large-scale data centres.

"By 2050, it is expected around half of all energy demand will be met by electricity," said Mike Hayward, MBIE Markets Manager.

Modelling shows wind and solar power as the most cost-effective means to meet this demand, with innovations likely to improve their efficiency.

The EDGS scenarios, used by the Commerce Commission to evaluate Transpower’s future investment proposals, predict an 80.9% increase in demand by 2050, from 39.6 TWh to 71.7 TWh.

“The 2030s will see considerable change in electricity demand and generation,”

Hayward stated, noting the retirement of coal and natural gas plants.

While renewable energy will predominantly meet new demand, gas will still play a supportive role.

By 2035, it is expected that 92.1% of New Zealand’s electricity will come from renewable sources, rising to 96.3% by 2050.