Review of wholesale market arrangements to unlock benefits of battery energy storage systems

The Electricity Authority Te Mana Hiko (Authority) is seeking feedback on its proposed options to improve wholesale market operations for utility-scale battery storage systems (BESS). This fits into our wider BESS-related work programme, as outlined in our updated BESS roadmap.

Thank you to those who submitted feedback on our draft BESS roadmap. After considering all feedback, we have updated it to set out our BESS-related work programme for the next two years.

We expect BESSs to play an important role in New Zealand’s power system to balance increasing variable renewable generation, such as solar and wind farms. BESSs can charge when the wind is blowing and the sun is shining and then release this energy back into the system when electricity supply is more constrained, contributing to the security of our power system.

Realising these benefits will require regulatory settings that are fit for purpose.

We are consulting on options to address four issues where current market arrangements do not fully reflect the unique characteristics of BESSs:

• Dispatch requirements for BESSs when charging: the rules for following dispatch instructions do not recognise that BESSs are highly controllable assets.
• Bid and offer forms for BESSs: the rules for BESSs submitting bids and offers, and the System Operator’s tools for sending dispatch instructions, do not recognise BESS as single entities that can both generate and consume
• Gate closure arrangements for BESSs: the System Operator’s security assessment tools and the rules for BESSs finalising their bids and offers do not recognise that the optimal operation of BESSs is unpredictable as it depends on limited storage and expectations of future prices.
• Constrained off payments for BESSs: the wholesale market financial compensation rules do not recognise that BESSs are highly controllable assets.

Updating market arrangements to address these issues would help to deliver affordable electricity for consumers, promote a resilient power system, and support efficient investments and competition in the market.

We welcome your feedback on our issues and options paper by 5pm, Tuesday 23 December 2025.

Consultation

BESS roadmap