Outcome 4: Strong and resilient economy delivering energy security and value from resources

New Zealand's long-term economic resilience depends on secure and affordable energy supplies and the sustainable development of its natural resources. Reliable energy systems are essential for households, businesses and critical infrastructure, while responsible resource development supports jobs, investment, regional growth and export opportunities and provides critical material inputs to the economy. Strengthening these foundations helps improve productivity, enhance resilience to supply disruptions and support sustainable economic growth over the long term.

MBIE progressed reforms to strengthen energy security and support reliable electricity and gas supplies. This included responding to the Independent Review of Electricity Market Performance and delivering the Government's Energy Package, progressing the strengthening of the regulatory tools available to the Electricity Authority, assessing options for additional dry-year generation capacity, advancing procurement of a liquefied natural gas (LNG) import facility, consulting on a Winter Energy Reliability Obligation and measures to improve gas market transparency by completing legislative change to enable enhanced collection and publishing of gas market information.

MBIE also continued work to improve market conditions for new renewable generation and firming capacity.

Despite current high retail electricity prices, increasing supply and addressing dry-year risks is expected to support more affordable and reliable electricity over time for households and businesses. Over the course of the year, wholesale market and futures prices for electricity have reduced substantially.

The ban on new gas activity was repealed, opening for new permit applications in September 2025. Six new permit applications for gas opportunities have been accepted for assessment, with one reaching approval in July 2026. Together, these provide a significant pipeline of potential new gas reserves to boost the country's energy security over the coming years. The $200 million Gas Security Fund was established to support additional gas supply and storage, while improved gas market information, including publishing gas reserves data earlier, helped inform sector investment decisions. Together, these measures are intended to improve confidence in New Zealand's energy system and support future investment in gas infrastructure. Significant progress has also been made on implementing a new decommissioning regime to ensure responsible end-of-life management of petroleum fields, brought forward by the sharper decline in reserves remaining.

During the year, MBIE progressed initiatives to strengthen New Zealand's minerals sector and support more resilient critical mineral supply chains. This included joining the Forum on Responsible Mineral Supply Chains (FORGE), supporting international efforts to strengthen critical mineral supply chains and ring-fencing $80 million of Regional Infrastructure Fund funding for critical minerals projects.

Implementation of the Minerals Strategy to 2040 continued, with work focused on improving investment readiness, increasing understanding of New Zealand's mineral resources, reducing exploration uncertainty and supporting opportunities in mineral processing, recycling and other value-added activities.

Together, these initiatives are strengthening the foundations for a more productive and internationally connected minerals sector, supporting innovation, investment and the Government's objective of doubling the value of New Zealand's minerals exports by 2035. Significant progress has been made this year, with export revenue reaching $2.5 billion in 2025 – a 71% rise since 2023, alongside a 5.5% rise in jobs in the minerals sector. Interest in new minerals development was high, with a 22% increase in permit applications to New Zealand Petroleum and Minerals in 2025 and MBIE delivered 44% more permit decisions compared with 2024 and was faster at doing so.

MBIE continued work to ensure that New Zealand gets a fair return from minerals development, collecting royalties of $243 million. MBIE published an independent review of the royalties regime, comparing New Zealand’s settings to international benchmarks for government take – royalties plus wider tax on minerals companies.

Looking at New Zealand’s wider natural resources, MBIE consulted on regulation to enable the development of natural (geological) and orange (induced) hydrogen, a potential future energy source that could be affordable, secure and reliable.

MBIE also developed a new Geothermal Strategy to unlock New Zealand’s geothermal potential. It aims to double geothermal use by 2040, supporting increased use of geothermal resources for energy, tourism and wider regional economic development, as well as export opportunities and research, innovation and development of next-generation technologies.

MBIE continued work to uphold its Treaty of Waitangi obligations and commitments across the Resources portfolio, including supporting active Treaty settlement negotiations and implementing 4 new Treaty settlements. MBIE also maintained ongoing engagement with iwi and hapū on Crown minerals matters under the Crown Minerals Act 1991, including consultation on policy development and permitting decisions. This involved collaboration with iwi and hapū on broader resources policy initiatives, such as the development of New Zealand’s Geothermal Strategy.

New Zealand’s proportion of renewable electricity generation continued to increase, with renewables delivering about 95% of generation in the December 2025 and March 2026 quarters.

MBIE progressed Electrify NZ to accelerate investment in renewable electricity generation, reduce regulatory barriers and support greater electrification across the economy. This work helps strengthen energy security, support productivity growth and reduce emissions.

Renewable generation continued to diversify through growing contributions from geothermal, wind and solar generation, improving system resilience and supporting future electricity demand. MBIE also progressed development of an offshore renewable energy regulatory regime to provide greater certainty for investors and support future renewable energy projects.

A significant new frontier development was launched with $60 million committed to drilling New Zealand’s first superhot geothermal well. While traditional geothermal wells typically extend to around 3 and a half kilometres, superhot geothermal wells are expected to be drilled deeper, potentially up to 6 kilometres, where temperatures and pressures can significantly increase energy output, up to 3 times greater than conventional geothermal systems. Drilling of the first exploratory well is scheduled to start in mid-2027, subject to final design, procurement timelines and regulatory approvals.

Renewable energy initiatives continued to advance, including the Chatham Islands renewable energy wind turbine project, which is expected to reduce diesel consumption by up to 68% while improving local energy resilience and reliability.

Together, these initiatives supported energy security, enabled investment in renewable energy and strengthened the transition to a more resilient and lower-emissions energy system.

Substantial progress has been made in enabling consumers to adopt distributed energy resources and ensure that the system is smart. Shifting electricity consumption away from peak times helps to avoid high prices and our overall network costs, while increasing rooftop solar helps to reduce consumers' power bills.

MBIE has delivered an active programme of work this year, including increasing the voltage range and export limits on networks, supporting the Energy Competition Taskforce to deliver better pricing and plans for rooftop solar and shifting time of use and delivering policy decisions to require that EV chargers supplied in New Zealand will need to meet a minimum standard of ‘smart functionality’ and be clearly labelled. This also includes supporting a Solar on Schools programme to enable schools to gain the benefits of solar and batteries and various other solar information and support via EECA so that consumers can make better informed decisions.

System-wide response to protect fuel supply and economic continuity

New Zealand’s fuel supply system supports freight, aviation, emergency services and everyday business activity. In 2026, conflict in the Middle East disrupted global oil markets and supply routes, increasing risks to fuel availability and prices in New Zealand.

Fuel importers took action to secure supply, while MBIE led the government response. MBIE worked with fuel importers, infrastructure operators, other government agencies and international partners to assess supply risks, coordinate response activities and support the continued operation of the fuel market. In particular, MBIE established regular monitoring of fuel stocks and expected shipments, improving visibility of supply and supporting government decision-making. It also provided regular public updates, supported diplomatic engagement and coordinated planning across government and the fuel sector.

The National Fuel Response Plan was updated to guide action at different levels of disruption, including arrangements to prioritise fuel for critical services if required. To strengthen fuel security, the Government also secured an additional 90 million litres of diesel. MBIE entered into arrangements to lease storage tanks and purchase diesel to establish this reserve.

The response required close coordination across government and industry in a complex and changing environment. It also identified opportunities to improve data, decision-making, contingency planning and coordination arrangements for future disruptions.

Fuel remained available nationwide during the period. The work undertaken strengthened monitoring and preparedness. At the time of preparing this report, MBIE is carrying out an internal review of lessons learned from the response to help ensure it is well placed for future disruptions.

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