New Zealand electricity industry

History

The first high voltage electricity transmission line was built in New Zealand in 1886. It ran between Skippers Canyon in Central Otago and a mining company six kilometres away.

In 1888, Reefton became the first town in New Zealand, and in the Southern Hemisphere, to have a public electricity supply. Wellington became the first city to have a public supply in 1889. By 1917, the Government had monopolised the rights to all forms of electricity generation and, the following year, established several Electric Power Boards to supply their districts with electricity.

The country's first major hydro scheme at Coleridge was developed by the government to supply Christchurch and Canterbury with power. North Island development of electricity resources began in 1919 when the Government bought the Horahora power station. In the next 10 years, the Government also purchased hydro power stations at Mangahao and Waikaremoana. These developments meant that electricity was available to many more New Zealanders, growing from 50,000 to over 250,000 by 1929. But World War II slowed down progress and, as a result of the huge increase in demand after the war, a 30-year hydro building programme was established. Dams were built at Tongariro, Lake Manapouri, the Mackenzie Basin and on the Clutha and Waikato rivers.

More power stations were built in the years between 1958 and 1978, including: Meremere (coal); Wairakei (geothermal); Marsden A (oil); New Plymouth (gas, with oil as a backup); Huntly (dual gas/coal); Otahuhu A (gas turbine) and Whirinaki (gas turbine). By 1965, the North and South Islands were linked by huge submarine electricity cables across Cook Strait.

In the 1990s, highly efficient combined cycle gas turbine stations were built at Stratford and Otahuhu and the largest cogeneration plant in the country was built at Southdown.

Structure

The New Zealand electricity industry has undergone significant reform in the last 20 years. First, the Electricity Corporation of New Zealand (ECNZ) was established in 1987 as a state owned enterprise to operate as a commercial, profit-making organisation. ECNZ was the sole provider of electricity in New Zealand, including generation, transmission and retail. Electricity was distributed through local electricity supply authorities.

Then, in 1994, Transpower was separated from ECNZ and created as a state owned enterprise. In 1996, ECNZ was split into two more state owned enterprises - ECNZ and Contact Energy - and a wholesale electricity market was established. Another major reform was the privatisation of Contact Energy in 1999.

The last significant reform was the separation of the lines and energy businesses of the former Electricity Supply Companies and the split of ECNZ into three competing state owned enterprises: Meridian Energy Limited, Genesis Power Limited and Mighty River Power Limited. These reforms were designed to introduce a more dynamic and competitive environment into the generation, distribution and retailing of electricity.