Barriers to developing new electricity generation

The below dashboard shares the findings from the Generation Investment Survey and interviews.

This work has provided valuable insights into what factors create delays, increase costs or add risk to generation investment projects. It helped the Authority identify gaps in our understanding of barriers to new generation and will inform our ongoing efforts to strengthen security of supply.

The dashboard highlights the Authority’s work to help alleviate barriers, including improving access to firming through standardised flexibility products and level playing field work. Our regulatory roadmap on battery-related work will also help manage some of the uncertainty these projects face.

In 2026, the Authority commissioned an independent review of the network connections process after it was identified as one of the main challenges facing generation developers in this 2025 Generation Investment Survey.

The review found Transpower's process for connecting new generation projects to the national grid has improved significantly since Transpower introduced a Connections Management Framework in 2022.

The generation connections process is generally effective, efficient and fair, and is working as intended. It has enabled more projects to progress through the connections process, reduced backlogs and helped focus resources on projects that are ready to proceed.

It also identified five focus areas for ongoing attention: refining process settings, improving transparency and predictability, strengthening commercial responsiveness, improving performance measurement, and managing future system pressures as demand for connections grows.

The suggested focus areas are with Transpower to consider as part of its ongoing management and improvement of the connections process. The Authority is not responsible for implementing the review's findings but will continue to monitor the performance and effectiveness of the connections framework.

The Electricity Authority is committed to supporting investment in electricity generation to help meet New Zealand's future electricity needs.

Battery energy storage systems (BESS) are becoming increasingly important as New Zealand transitions to a more intermittent and variable renewables-based power system. In the survey, battery and hybrid projects were noted as an emerging area that requires further exploration.

We are working to ensure we have the right settings to unlock the benefits of BESS, while also managing the challenges they bring, as this will affect all aspects of the power system. See our regulatory roadmap for BESS.

In the survey, developers expressed appreciation for the Authority's efforts on Task Force 1D, Part 6 on network connections, and the Government's proposed change to increase the amount of generation distributors can generate.

In January 2025, the Authority consulted on requiring gentailers to offer minimum volumes of long duration contracts that could be used to firm new generators' PPAs. Based on feedback, we believe an allocation approach is not the best solution. Instead, we think it is more effective to consider improved access to firming via the work on standardised flexibility products, the proposed level playing field measures (particularly the non-discrimination obligations), and complementary initiatives to encourage PPAs which will enable new investment without the risks associated with allocating firming volumes. We are increasing monitoring of bids and offers in the over-the-counter market, which will give us further insight into the PPA market and the impact of these initiatives.

We have consulted on the drafting of Part 6 of the Code to implement eight rule changes to make it more efficient to connect to distribution networks and upgrade existing connections. The findings from the 2023 Generation Investment Survey helped inform these proposals, including a new requirement on distributors to publish a network connection pipeline.

We issued a clause 2.16 notice to collect and publish information on significant load and generation projects wanting to connect to distribution networks. Making this information publicly and easily available will help ensure the right investment in new generation happens at the right time and in the right place.

It will also complement our Generation Investment Pipeline of planned transmission-connected generation projects to create a more complete view of electricity supply and demand, helping inform policy decisions and industry efforts to strengthen security of supply.