What is our opportunity?
Today, geothermal stands at the threshold of a new era – one in which it can support our transition to a low-emissions, high-value economy.
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A proven resource, ready to scale
If geothermal already generates nearly 20% of New Zealand’s electricity and contributes a small proportion[10] of our direct heat use needs, what’s next? Our reliable, renewable baseload source – available rain or shine – is deeply embedded in our regions, particularly in the central North Island. We are the fifth largest geothermal power producer globally,[11] often sharing expertise across borders.
Yet, much of our current geothermal infrastructure is built on exploration led by the Crown decades ago. Since then, development has been incremental and fragmented. The opportunity now is to shift from legacy to momentum – doubling geothermal energy production and unlocking a broader set of uses across the full heat spectrum.
Why now?
The world is moving towards cleaner, more resilient energy systems. New Zealand’s electricity demand is projected to grow by 68% over the next 25 years,[12] and our industrial sectors need to reduce emissions. Geothermal can meet this challenge, providing low-emissions heat and electricity to food and timber processors, greenhouses, and even powering data centres. Because geothermal is an indigenous resource, rooted in our land, it offers long-term energy security.
At the same time, new technologies like supercritical geothermal could triple energy output from a single well. This frontier innovation, along with mineral recovery from geothermal brine and the adoption at scale of low-temperature heating systems, can open the door to new industries and opportunities.
A platform for inclusive growth
Geothermal development is also a powerful lever for regional and Māori economic development. Many geothermal fields are located on or near whenua Māori, offering opportunities for iwi and hapū to lead and benefit from the resource. Protecting, retaining and growing tourism, wellness and biodiversity initiatives centred on geothermal taonga can further enrich local economies.
What’s holding us back?
Despite its vast potential, New Zealand’s geothermal sector faces some barriers, but has the opportunity to accelerate. Exploration has stagnated since the Crown’s initial drilling efforts, with high upfront costs (estimated at around $10-15 million per well) and fragmented access to geothermal data. Much of the existing field knowledge is unconsolidated, making it difficult for tāngata whenua, smaller players and new market entrants to assess viability or invest confidently. It also means that we may not have the level of data and insights necessary to progress development on geothermal fields or within wider geothermal systems that may be well-suited to energy production (electricity and direct use). Māori landowners, despite being well-positioned geographically, may face additional hurdles in accessing capital and technical expertise. Regulatory settings, designed for conventional geothermal use, have not kept pace with low-temperature applications and are yet to be developed for emerging technologies like supercritical geothermal.
Additionally, the sector faces challenges in scaling low and medium heat applications, which are underutilised despite their potential to decarbonise industries, transition gas users (including in public facilities like hospitals, prisons and schools) and support regional growth.
Without deliberate and coordinated action – through enhanced data stewardship, future-fit regulatory systems, targeted investment in demonstration projects, and enabling Māori participation – New Zealand risks under-leveraging a globally significant geothermal resource. This in turn will limit its potential to drive energy resilience, regional development, economic growth, and climate leadership.
The geothermal strategy envisions a future where New Zealand is a global leader in sustainable geothermal development, delivering innovation, resilience, and inclusive growth for future generations.
By embracing our geothermal potential, we can power a more resilient, inclusive, and prosperous New Zealand, grounded in innovation, collaboration and kaitiakitanga of our natural resource.
Footnotes
[10] In 2023, only 4.2% of geothermal energy was used for direct use purposes – more than 95% was used for electricity generation (figure derived from MBIE’s ‘Energy balance tables’ spreadsheet, referenced in footnote 6).
[11] ThinkGeoEnergy’s Top 10 Geothermal Countries 2024 – Power(external link) — ThinkGeoEnergy
[12] Statement of Government Policy to the Electricity Authority Under Section 17 of the Electricity Industry Act 2010: New Zealand Electricity Industry(external link) — New Zealand Gazette
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