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Review of electricity market performance

The Government has announced a package of actions in response to the review of the performance of electricity markets. The review began in January 2025.

Background

MBIE commissioned Frontier Economics to undertake an independent review of electricity market performance following the Government’s decision on the scope of a review in November 2024.

The Terms of Reference for the review and Cabinet documents are available below. The purpose of the review was to advise on the impact of market structure, market design and market rules on electricity market performance and on options to improve market performance.

Terms of reference for a review of electricity market performance

Cabinet paper: Electricity Market Performance Review [PDF, 232 KB]

Cabinet minute: Electricity Market Performance Review – Minute of Decision [PDF, 219 KB]

Independent experts involved in the review

MBIE engaged four independent experts through a competitive tender process to support the review:

Lead reviewer: Frontier Economics
Peer reviewers:
- NERA UK
- A team of international experts: Prof James Bushnell, Prof Severin Borenstein, Prof Toby Daglish, and Dr Gordon Leslie
New Zealand Expert: Concept Consulting (engaged until 31 March 2025)

Outcome of the review – Government’s key actions

The Government has announced a package of actions in response to the review of the performance of electricity markets:

Launching a formal procurement process for a Liquefied Natural Gas (LNG) import facility. The Government will first be seeking registrations of interest from potential providers and proposals for accelerated delivery of this facility.
Increasing generation through supporting commercial investments by the Crown’s mixed ownership model companies.
Leveraging government energy demand to boost investment in new energy supply.
Strengthening the Electricity Authority.
Improving gas market transparency.
Introducing new rules for market participants and more sophisticated security of supply assessments from Transpower to ensure the lack of dry year back-up supply can’t re-emerge.
Delivering improvements in electricity distribution business (EDB) efficiency and increasing thresholds for EDB investment in generation.

Key documents