Aug 25, 2025
Submission
Rewiring Aotearoa submission on The Draft Fuel Security Plan

Electrification is the single biggest opportunity to improve fuel security in New Zealand and that's why we think we need a bold national energy independence plan, not just more incremental changes to our current fuel security plan.

About Rewiring Aotearoa

Rewiring Aotearoa is an independent non-partisan non-profit funded by New Zealand philanthropy. It is a registered charity working on energy, climate, and electrification research, advocacy, and supporting communities through the energy transition. The team consists of New Zealand energy, policy, and community outreach experts who have demonstrated experience both locally and internationally. We’re always fighting for the New Zealanders who use the energy system, and our goal is to help build a low cost, low emissions, high resilience electrified economy for Aotearoa NZ.

Submitter information

MBIE may upload submissions and potentially a summary of submissions to its website, www.mbie.govt.nz.  Rewiring Aotearoa is not aware of any grounds under section 9 of the Official Information Act for this submission to be kept confidential.

Response to consultation questions

Introduction

1. Do you support our vision for the fuel system (see box on page 1)? Why / why not? 

In part, although we suggest the following amendments to reflect the role that electrification can have to minimise fuel security risk:

Our vision is to have an energy system that is resilient to disruptions, so that people have access to energy where and when they need it. 

The reason we propose these changes is because the supply of liquid fuel cannot be considered in isolation from other energy sources in New Zealand.  Electrification is the single biggest opportunity to improve fuel security by rapidly reducing our reliance on imported fuel supply. This was demonstrated in MBIE’s Fuel Security Study, which illustrated the potential of different mitigation options with accelerated electrification of transport having the highest potential usefulness to improve resilience.  

NZ spends around $40 million per day running the 10 million machines that use fossil fuels, most of which are imported fuels. 8.4 million of these machines can be switched for electric machines, where the technology is already there, it’s economically viable to do so when you consider the lifetime cost of use, and the machines are readily available in New Zealand. A key benefit of making this transition is the fuel security benefit, reducing reliance and economic burden of imported fossil fuels. 

For households, financing electrification of appliances and vehicles can save households money from day one, as the cost of finance repayments and electricity is cheaper than using fossil fuels to run our machines.

In MBIE’s Fuel Security Study the benefits of each mitigation option are measured by its volume "usefulness"— the amount of fuel it adds to improve fuel resilience, adjusted by its scenario usefulness score, which reflects how effectively it addresses different disruption scenarios and whether this is on a one-off or continuous basis.  Accelerated transition to electrification of transport provided the highest score for volume of usefulness.  It was also concluded to be one of the three most cost-effective strategies for enhancing fuel resilience by the Study.

A study authored by Paul Conway (Chief Economist, Reserve Bank of New Zealand), Rewiring Aotearoa and peer reviewed by Geoff Simmons (Chief Economist, Parliamentary Commission for the Environment) highlights the full range of benefits and significant opportunity for New Zealand from electrifying New Zealand households by replacing fossil fuel appliances and vehicles with electric alternatives, along with adding rooftop solar and batteries. It presents an opportunity to save thousands on cost of living, and could save New Zealand around $10.7 billion per year by 2040.

This opportunity can benefit New Zealand today, as well as serve as an investment with lasting future advantages. By making the switch to low-cost, locally generated electricity and reducing reliance on expensive imported fossil fuels, the nation can improve its balance of trade while enhancing its resilience.

This study further highlights our point that we should not simply be setting objectives for fuel supply but thinking strategically about the energy system as a   whole, to plan action that can unlock the full spectrum of benefits for New Zealand now and into the future.

2. Have we identified the correct objectives for our liquid fuel security (see box on page 1)? 

Yes, although we suggest an additional objective: 

Our objective is to maintain energy supply by: 

  •  improving energy independence 
  • reducing vulnerabilities in our fuel supply chains 
  • shifting to domestic electricity supply where it benefits New Zealanders
  • minimising the impact of fuel disruptions

As we note above it is important to consider the energy system as a whole to plan action that unlocks the most benefits for New Zealand now and into the future.

The reason we propose this additional objective is to highlight the important opportunity for electrification to help maintain fuel supply, by: 

  • greatly reducing demand, freeing up fossil fuel supply for critical hard to decarbonise uses and 
  • providing alternative domestic energy supply that is resilient and secure to power essential services and keep our economy running.

For example, as we highlight below electrification of light passenger vehicles is technically and economically feasible now, and as outlined above, can provide significant savings for New Zealand homes. This could reduce our total imported liquid fossil fuel demand by over one third.  

3. Do you agree that the plan should be considered within the next 10 years, ie out to 2035? Why / why not? 

A plan to improve national fuel security should be implemented now and include rapid electrification to ensure New Zealand has the secure fuel supply it needs to maintain essential services, economic activity and maintain passenger transport needs in the face of imported fuel supply shocks.  This could include a focus for the first five years on what is technically and economically feasible now and provides the largest reduction in liquid fuel demand -  for example unlocking electrification of light passenger vehicles.

As noted in MBIE’s Fuel Security Report “International risks include supply chain disruptions from geopolitical conflict and natural or physical disasters that impede shipping”. Increasing regional conflicts and strains in international relations and collaboration mean geopolitical risks of imported liquid fossil fuel supply is increasing. Stable domestic supply of electricity and electrification of demand is an increasingly valuable way to mitigate this increasing risk as part of New Zealand’s Fuel Security Plan. 

Electrification provides a wide range of benefits to New Zealanders alongside improving the security of energy supply.

Focus area 1: Resilience against global supply shocks
4. Do you believe Focus area 1 addresses the challenges the fuel sector is facing? Why / why not?

The measures proposed will improve resilience against global supply shocks but will not fully address the challenges the fuel sector is facing.  These measures will not significantly improve resilience for New Zealand to a long term fuel supply shock - accelerated electrification that unlocks domestic energy security and resilience will provide a much more significant and permanent solution to supply shocks.  

For example, requiring diesel fuel suppliers to hold an additional 5 days of supply in reserve will help but cannot provide long term supply to keep the New Zealand economy running, nor can it fully buffer New Zealand to the impact of price shocks and volatility associated with imported liquid fossil fuels.

5. Do you believe the actions under Focus area 1 will improve New Zealand’s fuel security? Why / why not? 

Only in a limited way. The actions in Focus area 1 will provide limited material improvements to New Zealand’s fuel security. Focusing on accelerated electrification of passenger transport, freight, farming and emergency services will have a much more material impact, permanently addressing fuel security for much of the New Zealand economy, and greatly reducing overall energy costs and energy price volatility. 

6. Are there any additional actions under Focus area 1 the Government could take to reduce dependence on imported fuels and improve our energy independence?

Accelerated mass electrification of passenger transport and essential services including freight, farming, and emergency services. 

This could be delivered via A National Energy Independence Plan, that addresses foreign oil dependence and volatility permanently. The proposed approach set out in the Draft Security Plan provides a step towards resilience. We propose an alternative, evidence-based and practical plan to "Achieve Independence, Resilience and Competitive Advantage by 2040". 

This Plan would reshape the narrative of stepwise incremental actions, toward bold actions that provide fuel security for NZ. This could include rapid mass electrification policies and actions across central government.

Much of the action needed to unlock mass electrification would not require subsidies and relates to making low cost finance accessible to all households so they can invest in EVs.

Many of the  purchasing decisions related to electrification of liquid fuel demand are made by households - eg: the light passenger vehicle they choose to purchase. We know that for most households they can save money by purchasing a new EV, and save even more if the range of a second hand EV is sufficient for their needs. However, the upfront cost of EVs can be higher than ICEs while the running cost of EVs are significantly lower. Making low-cost finance available to all households and educating households on the savings from EVs are key actions that could unlock widespread electrification of transport.  

Focus area 2: Domestic resilience
7. Do you believe that Focus area 2 addresses the challenges the fuel sector is facing? Why / why not? 

We agree with the description of risks associated with risk of many single points of failure associated with domestic liquid fuel supply. However, we do not think the actions proposed will adequately address the challenges the fuel sector faces related to resilience of our domestic liquid supply chains. We have seen through impacts of earthquakes and extreme weather events over the last decade how long it can take for landslides to be cleared to reopen road transport. Inland centres that cannot access ports and are heavily reliant on one main highway for delivery of liquid fuels are extremely vulnerable.  

Increasing electrification for crucial services and transport and local supply of electricity (eg: through solar and batteries) can play a material role in addressing domestic resilience as a permanent alternative to focusing on liquid fuel supply.

8. Do you believe actions under Focus area 2 will improve New Zealand’s fuel security? Why / why not? 

Actions under Focus area 2 will go some way to help and additional storage will be important particularly to improve security for aviation fuel supply supplied by pipeline. However, electrification of many parts of our transport sector, along with investment in solar and battery systems co-located with demand (eg: developed alongside EV charging networks and large EV charging depots) can provide a much more resilient energy system. Extreme weather events or natural disasters that could impact port infrastructure, pipelines, storage terminals and roading networks to distribute imported liquid fuels, could also impact electricity transmission and distribution networks. 

However, because electricity supply can be co-located at demand sites (through investment in solar and battery systems) electrification provides greater domestic energy resilience than liquid fuel supply.The cost of solar and batteries is continuing to fall and can provide increasing cost savings for households, businesses and communities that invest. The IEA’s Batteries and Secure Energy Transitions report predicts a 40% reduction in battery storage technology costs by 2030.  Savings from solar are expected to grow as solar capital costs continue to fall and cost of centralised supply of electricity increases. At today's prices rooftop solar investment financed at 5.5% drops the household’s variable cost of electricity supply (from a combination of grid and solar) to around a third of the current variable delivered cost of electricity supply from the electricity grid for households. The benefits of solar and batteries for households will persist over the life of the investment as grid supply costs increase.  

This is shown in the chart above of household electricity price estimates where the variable cost per unit of electricity for a household is significantly lower for a household with a solar system (yellow line) and household with solar and battery system (green line). 

Historic and expected variable electricity prices are shown in the blue dashed line (which factors in price increases associated with regulated investment of distribution networks approved out to 2030).

9. Are there any additional actions under Focus area 2 the Government should do to enhance domestic resilience of critical infrastructure?

The National Energy Independence Plan mentioned above should include measures to enable development of distributed energy supply and storage co-located in strategic demand centres, EV charging depots and across rural locations.

Focus area 3: Supporting domestic alternatives
10. Do you believe Focus area 3 addresses the challenges the fuel sector is facing? Why / why not? 

No. Focus area 3 centres on addressing challenges associated with developing low-carbon alternative fuels such as biofuels, hydrogen and sustainable aviation fuels, when the biggest opportunity to unlock domestic fuel alternatives is to implement mass electrification of transport. This could be done rapidly predominantly utilising existing technology, saving the country billions.

The table below is from the Report “Investing in Tomorrow” published by Rewiring Aotearoa and shows the annual savings from electrification of homes and vehicles in New Zealand over time.

11. Do you believe actions under Focus area 3 will support investment in domestic production of low-carbon alternative fuels? 

No, not in a way that most benefits New Zealanders and materially provides for fuel security.  

We think the focus of these actions does not capture the biggest opportunities for New Zealand to address fuel security - electrifying much of our transport needs and off-road vehicles

Electrification of light passenger vehicles is technically and economically feasible now, and as outlined above, can provide significant savings for New Zealand homes. This could reduce our total imported liquid fossil fuel demand by about one third.  

There is a large opportunity to electrify much of the light commercial vehicles, medium, heavy and specialised vehicles on-road vehicles. These machines collectively also use around one third of total imported liquid fossil fuel demand. 

Electric trucks, utes and other LCV are in the early stages of commercial supply in New Zealand and options are expected to expand with larger battery ranges and suitability for a wider range of uses.  Demonstration and targeted support for essential service transport electrification could help improve energy security and resilience to domestic fossil fuel supply chain disruption. For example, there are already over 50 electric rubbish trucks in operation in New Zealand with the potential to replace the entire fleet with electric alternatives. Likewise, opportunities exist for electrification of our passenger bus fleets with Auckland already having a dedicated bus charging depot and around 250 electric buses.

Off-road vehicles used for construction and mining also have emerging electric alternatives. Whilst investment is still at the demonstration stage in New Zealand, initial trials are showing positive results including overall cost savings.  

12. Are there any additional actions under Focus area 3? Is there more the Government can do to support development of domestic production of low-carbon alternative fuels?

There are a range of opportunities for New Zealand to benefit from domestic production of electricity and support electrification of both on and off-road vehicles and aviation where the technology is still developing or not widely available.

Innovation advantage for electric agritech

The agricultural sector is heavily reliant on imported diesel. Aotearoa NZ possesses a strategic advantage for investment in electric agritech innovation. This advantage stems from our large agricultural sector and comparatively high diesel fuel prices relative to other advanced economies, making electrification economically viable over the lifetime of the machines.

A key opportunity in farm electrification lies in developing electric, task-specific implements and vehicles such as sprayers powered by electric tractor batteries which are well-suited to sectors like kiwifruit. Agritech innovation presents an opportunity to improve fuel security and resilience, reduce domestic fuel costs and emissions while creating exportable technological advancements. Electric tractors and self-propelled machinery could also serve as mobile energy storage units. Their large battery capacity could provide backup power when the machines are not in use, further enhancing the overall value proposition for investment by the agricultural sector. 

Innovation on short distance electric aviation

New Zealand is well placed to trial short distance electric aviation.

Electric aircraft are still in their early stages in Aotearoa NZ, with a few key testing and demonstration projects slated for 2025 that are worth monitoring.  These examples are small in scale and far from being commercially viable. 

Updating civil aviation rules and regulations is therefore essential to streamline the approval process and foster innovation in electric aviation. Modernising regulatory frameworks will enable the safe integration of electric aviation into existing airspace, while also sending clear signals to accelerate development by lowering entry barriers and encouraging investment. Further, placing emphasis on electric aviation also provides an effective demonstration of how even difficult sectors, like aviation, could be electrified and showcase the potential for electrification in other hard-to-decarbonise industries.

A dedicated electric aviation sandbox should be established to streamline approvals for both developing new electric aircraft and converting existing fossil-fuel models. While some regulation is justified, the current system is often burdened by unnecessary complexity. This sandbox would create space for innovation, attract international investment, talent, and companies, and showcase best-practice regulation to support the electrification of domestic aviation.

The Civil Aviation Service has recently developed a policy statement for exemptions from operation policy. A similar approach could be explored for sandboxing to support aviation innovation if it could provide a streamlined exemption process. 

Aotearoa NZ is also well suited geographically to this, with many short flights and many tourism flights, for example South Island Glacier flights. It is an area where Aotearoa NZ could lean into its own strengths as a high tourism nation, to act early and reap the rewards. 

Focus area 4: Resilience in a transitioning market
13. Do you believe Focus area 4 addresses the challenges the fuel sector is facing? Why / why not? 

In part, but it does not capture the most significant pathway to address challenges the fuel sector faces. For example, by implementing a National Energy Independence Plan mentioned above, Government could provide more predictable and rapid declines in liquid fuel use. Implementing a more strategic and planned approach to electrification of much of our transport energy demand (where this is already technically and economically feasible), provides greater certainty over future utilisation of fuel infrastructure. This can inform Government oversight over where there are requirements to maintain remaining fuel infrastructure, for example for harder to decarbonise areas such as aviation. It can also help Government and industry identify where assets will no longer be needed and manage risk of asset stranding.

14. Is there a role for government to minimise risk of stranded assets or underinvestment? 

Yes, through greater strategic action supporting electrification of liquid fuel use, the Government can improve certainty over utilisation and timelines for asset retirement.

15. Are there other actions the government should be doing under Focus area 4?

Implementing a National Energy Independence Plan mentioned above, Government could provide a more predictable forecast of the decline in liquid fuel use. It could identify ongoing roles for liquid fuel infrastructure to support electrification or decarbonisation of liquid fuel use that is not currently economically or technically feasible.

Read moreDownload the document here

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