Fact sheet: A proposed reliability obligation to manage dry-year risk
Published: 9 Jun 2026Summary of the discussion document and consultation process.
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PDF, 306KB, 2 pages
A proposed reliability obligation to manage dry-year risk
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Submissions due: 21 July 2026, 5pmMBIE is seeking feedback on whether a proposed reliability obligation would provide the right incentives for the market to better manage dry year risk in New Zealand’s electricity market.
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About the consultation
Electricity supply in New Zealand depends heavily on hydro generation. In dry years, when hydro inflows are low, there is less energy available. At the same time, recent changes in the energy system - including less thermal generation and more wind and solar – have increased our reliance on weather conditions for energy.
When the system works well, electricity is available when we need it and prices remain manageable. When the system is not working effectively, the potential for energy shortages increases and prices can rise sharply or gradually over time, affecting industry, businesses and households.
Current arrangements in our energy system rely on the market to manage dry year risk. However, recent experience suggests the market may not always deliver the energy cover we need ahead of time to help manage conditions in a dry year.
Cabinet has agreed to a strengthened regulatory framework to ensure dry-year risk will not re-emerge in the future, which will be progressed via changes to the Electricity Industry Act 2010, and an updated Government Policy Statement on Electricity.
We are now consulting on a proposal to introduce a new reliability obligation. This would require market participants to secure enough fuel or firm generation capacity ahead of a winter where a shortfall is expected.
We want to understand:
- whether you agree that additional incentives are needed to better manage dry year risk; and
- your views on the proposed two-layered winter energy reliability obligation.
Your feedback will help inform decisions on whether additional incentives are needed and how the proposed obligations should be designed.
We welcome feedback on any, or all, of our consultation questions.
Who we want to hear from
We invite submissions from anyone with an interest in New Zealand’s electricity market, including and not limited to:
- electricity generators, retailers, and other registered market participants
- investors and developers in electricity generation, storage, and demand response
- business groups and industry bodies
- large energy users and industrial consumers
- household consumers, and consumer and community groups
- iwi, hapū, and Māori organisations
- academics, researchers, and advisors.
Read the discussion document
MBIE has published a discussion document to support this consultation. The discussion document seeks feedback on the key issues and our proposed preferred solution, as well as explaining why other options have not been progressed.
The document sets out specific consultation questions, and we ask submitters to refer to the relevant question numbers in their feedback.
We encourage you to submit your feedback via our submission form.
Discussion document: A proposed reliability obligation to manage dry-year risk
Published: 9 Jun 2026This discussion document seeks feedback on whether current electricity market incentives are sufficient to ensure reliable supply in dry years, and whether additional measures are needed. It proposes…
File
PDF, 2.6MB, 65 pages
Submission form: A proposed reliability obligation to manage dry-year risk
Published: 9 Jun 2026Submission document for responses to the consultation on a proposed reliability obligation to manage dry-year risk.
Type
File
DOCX, 1.3MB, 7 pages
How to make a submission
To make a submission on the proposals contained in this discussion paper, either:
- complete the submission form and send it to electricitymarkets@mbie.govt.nz or
- mail your submission to:
Electricity Markets Policy
Building, Resources and Markets
Ministry of Business, Innovation and Employment
PO Box 1473
Wellington 6140
New Zealand
Reference the relevant question numbers in your feedback.
Provide your feedback by 5pm, Tuesday, 21 July 2026
MBIE may publish individual submissions and will publish a summary of submissions on its website. If you do not want your submission, or parts of it, to be published or included in a made public summary, clearly indicate this in your submission or covering email.
All submissions are subject to the Official Information Act 1982 (OIA). This means your submission may be requested by a member of the public. MBIE must release the information unless there is a good reason to withhold it under the Act.
If you consider any part of your submission should be withheld under the OIA, clearly identify those parts and explain the reasons. MBIE will take your views into account and may consult with you if a request is received.
The Privacy Act 2020 applies to all submissions. Any personal information you provide will be used only for the purpose of informing policy development for this consultation.
All submissions will be read by MBIE officials. MBIE may also use AI to summarise content and identify key themes. All AI outputs will be subject to human review.
If you do not want your name or other personal information included in any published material, indicate this clearly in your submission.
When preparing your submission, ensure you do not include any information that would breach confidentiality or disclosure obligations (for example, under employment or non-disclosure agreements).
What happens next
After the consultation closes, MBIE officials will review and analyse all submissions.
MBIE officials will then provide advice to the Minister for Energy on the feedback received and proposed next steps. Any future policy decisions would be subject to the usual government decision-making processes.