Operation Laser Kiwi: help us take New Zealand-made energy on the road
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The OECD has just released its 2026 report on New Zealand's economy. And when it comes to energy, it basically gave us a 'must try harder' grade. On the proposed LNG terminal - which, remarkably, is still not dead yet despite all evidence suggesting it should be - the OECD said, as we have said, that it would not serve its intended function of lowering prices.
LNG was not a long-term affordability solution, it risked locking in fossil‑fuel dependence and would further exacerbate New Zealand’s already high vulnerability to liquid fuel import stoppages and price volatility.
"In addition, it would create a single-point-of-failure risk because there is only one viable port of entry in Taranaki."
Countries that are less reliant on gas for electricity have been able to keep their electricity prices low. It suggested energy security could be achieved by rapidly scaling non‑gas seasonal (dry-year) firming, such as batteries, biomass, pumped hydro, geothermal and demand response.
And we also believe solar needs to play a role as it will help keep water in the hydro lakes.
In conjunction with more large and small-scale renewable generation, part of our New Zealand-made Energy plan is about helping gas users transition to electricity and the OECD agrees that's crucial.
"Many medium‑sized industrial users can technically switch to electric boilers and heat pumps, but face upfront investment and network upgrade hurdles. Targeted support, such as concessional loans or accelerated depreciation, may be justified where electrification has a viable business case."
This is a far better option than sneaking in LNG, making electricity users pay for it and hoping for more domestic gas, which the OECD says is unlikely to be found.
The report also found that the gentailers’ financial strategies are not aligned with the country's needs. And while the gentailers have said publicly that they are building more now than during 'Think Big', the OECD says they are paying out far too much in dividends ($12 billion over the decade to 2025) and not investing enough in generation.
To date, it says the Government has helped by offering to participate in equity raises.
"Gentailers have consistently paid out 90–240% of net income in dividends ... Financial analysts would normally consider payout ratios of above 80% as too high, endangering the financial health of companies with significant investment needs."
The gentailers are not going to lower bills. LNG is not going to lower bills. But Energy Impact Loans through the Ratepayer Assistance Scheme will. As we head into winter, many families are in for another shock. So why is this Government not pushing it through?
Find out more about the scheme here⚡ https://loom.ly/Kowww4c
Opportunity will establish a $1 billion Industry Energy Resilience Fund so New Zealand businesses can switch away from fossil fuels faster, cutting emissions while strengthening energy security and reducing costs.
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