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How is NZ's electricity made?

The birth of an electron: how electricity is generated in NZ

Ever wondered where your electricity comes from? It turns on the lights, powers the air fryer and charges up your electric scooter, waiting patiently behind your light switch or electrical sockets until you need it.

And according to the Ministry of Business, Innovation and Employment (MBIE), during 2022, NZ’s total electricity use totalled a hefty 43,500 gigawatt hours.

So what generates all this electricity for us here in Aotearoa – and just how clean is it for our environment?

Hydro: produces no carbon emissions

Hydroelectricity, or the energy harnessed from falling water, is NZ’s main source of electricity. In 2022, 60% of our electricity was generated this way.

Hydro generation works by damming water from a lake or river so that when the water is released, it’s driven down a pipe and over the blades of a large turbine with such force that it causes the turbine to spin. The turbine is connected to a generator, which converts the turbine movement (kinetic energy) into electrical energy. The water then flows straight out into a river below.

Here in NZ, we currently have over 100 hydroelectric power stations. The mighty Waikato river powers 9 stations, producing around 10% of New Zealand’s electricity!

Hydro stations powered directly off river flow are at the mercy of the river level, which can vary across seasons and with different weather patterns.

Hydro dams, like Benmore and Clutha, hold enough water that they can be used as and when they’re needed (they each have a generator that prevents the storage dams from getting too high or too low), although building dams like these does have an environmental impact.

Wind: produces no carbon emissions

Wind turbines generate electricity much the same way as hydro generation, except they use energy from the wind to spin the turbines. The faster the wind blows, the faster the turbines spin. And that, of course, means more electricity!

NZ’s 19 wind farms currently produce around 7% of our electricity, enough to power around 450,000 Kiwi homes every year.

However, with the volatile and changeable nature of hydroelectricity, wind farms may take on a much bigger role, especially given that we’re not short of a strong gust or two.

Wind generation also needs to co-exist with another form of generation, like hydro, because we can’t store the energy produced by turbines. So when the wind stops, or the turbines are locked, back-up generation is used.

Solar: produces no carbon emissions

Let’s talk about the shining star in our renewable energy lineup – solar! Solar generation converts energy from the sun into electricity via solar panels, which range in size from residential rooftop installations to solar farms that stretch over hectares of farmland.

Solar energy is on the rise in Aotearoa – while it currently contributes less than 1% of our generation (that’s around 43,700 solar panels installed across Aotearoa), that’s estimated to increase to 6% by 2035.

Like all things, solar power does have its limitations. Because it’s dependent on sunlight, no energy can be produced on cloudy days or during nighttime.


Battery Energy Storage Systems (BESS) are new to NZ, offering a way to store electricity and provide system support in case of failure at a large generating plant, or during times of very high demand.

The batteries are typically charged overnight when levels of renewable generation are high, and this means that BESS can help to maximise the benefits of intermittent generation like solar power.

This technology is still pretty fresh in NZ, with our first large-scale BESS launched in 2023 in Rotowaro, Huntly. Once commissioned, it’ll provide enough electricity to power around 2,000 homes and provide quick back-up reserves when we need it.

Geothermal: produces some carbon emissions

NZ is close to the hot mantle below the Earth’s surface, which heats the ground and creates those iconic Kiwi hot pools and geysers.

But our geothermal features also provide around 18% of our electricity, via 20 power stations that pipe high-pressure water and steam from wells under the ground to a generation plant, like Wairakei, just north of Taupo. Just as with hydro and wind generators, the energy from the steam then spins a turbine, creating electricity.

Because geothermal is a reliable and consistent source of energy unaffected by weather, it’s used as baseload generation which means it generally runs continuously, and takes a long time to start up and shut down.

But we need to be careful with our geothermal energy, and it’s always closely monitored. It’s a renewable resource, but with clear environmental impacts. Our large-scale harnessing of geothermal activity has seen several geysers and hot pools become extinct, and it has the potential to impact land subsidence, as well as contaminate our rivers and land with wastewater chemicals.

Geothermal energy also releases some carbon emissions, but thanks to advances in technology it’s getting cleaner – most current and all future geothermal stations are being fitted with a Carbon-Capture and Storage (CCS) system that captures those emissions and reinjects them back into the ground.

Co-generation: produces a moderately high level of carbon emissions

Also known as co-gen. This is the process of using excess energy from the industrial sites of businesses or landfills to produce steam to generate electricity, which is usually then used again on-site.

The business saves money by generating their own electricity and steam supply, and puts all of their excess heat to good use. If electricity is produced over and above this, it can be fed back into the national grid for the rest of us to use – pretty cool, huh!

Co-gen currently produces around 2% of our electricity, and occurs mainly in the upper North Island, in larger, industrial and manufacturing businesses in the wood-processing, steel and dairy industries, and in hospitals.

Gas: produces lots of carbon emissions

This non-renewable resource creates electricity through thermal generation: when it’s burnt the heat is converted to steam, and the pressure of the steam is used to drive a steam turbine.

There is currently lots of discussion about the role that gas will play in NZ’s low-emissions future.

NZ’s gas fields are located only in the Taranaki region (both on and off-shore), providing around 10% of our electricity.

Coal: produces lots of carbon emissions

Like gas, coal is also a non-renewable resource and a fossil fuel, meaning it’s made from plant and animal matter found in the Earth and millions of years old. It also produces energy through thermal generation.

Huntly Power Station has NZ’s only coal-fired generating units, as well as the largest gas turbine. The gas turbine generates electricity most of the time, while the coal units are usually only used when hydro storage is low, or demand is high and there no other renewable sources are available. Coal generates around 3% of our electricity.

Diesel: produces lots of carbon emissions

Also known as oil, diesel is used similarly to coal and gas, producing energy through thermal generation or the burning of diesel.

It’s far from our ideal choice as an electricity generator, producing very high greenhouse emissions, and is only called into action to generate electricity very occasionally here in NZ when the renewable forms of generation can’t meet market demand due to low supply.

What’s my role in all of this?

Because electricity can’t be stored en masse (yet!), the ways we individually use our power can have an impact on the generation type – cleaner or dirtier – that’s creating our electricity.

Good news though – each and every one of us can influence the mix of electricity in our grid, and we’ve got just the tool to help you do it: Carbon Tracker. It shows you the carbon emission being generated from our power use at any given time, so that you can make use of cleaner, greener electricity.

You can read more about off-peak power, and your influence on our generation mix, here!