Quarterly update: progress on MDAG recommendations strengthens the security and resilience of the electricity system

This is the Authority’s latest quarterly update on how we are implementing the recommendations in the Market Development Advisory Group’s (MDAG) final report. It covers October to December 2025.

Overall progress

The Authority has implemented 13 of the 31 recommendations and is making steady progress on a further 11 recommendations. No recommendations were completed this quarter.

You can see the status of all of the recommendations in our quarterly report.

This update highlights recent milestones that improve the reliability and resilience of the electricity system. These contribute to security of supply and, over time, lower energy costs for all New Zealanders.

Key milestones include

• Lowering the risk of power supply interruptions: In January we announced the decision to establish the Emergency Reserve Scheme (ERS). The ERS will enable industrial organisations to be paid by electricity purchasers to either reduce their power use or provide extra capacity to the market for short periods on the rare occasions when the electricity system is under extreme pressure, such as when insufficient electricity generation is available. Establishing the ERS will improve reliability and security of supply for the benefit of all consumers. We will support the System Operator to work with industry to develop and implement the scheme. We expect the scheme to be in place towards the end of 2026. (Recommendation 30)
  
  
• Investigating a five-minute variability management tool: The Authority is developing a new ancillary service product (in the form of a five-minute variability management tool) to cover sudden and unexpected reductions in output from intermittent generation sources, such as wind or solar. Investigatory work with the System Operator began in October 2025. (Recommendation 6)
  
  
• Making it faster and easier to connect to electricity networks and removing barriers to solar export: We have improved application processes for access seekers (such as public EV charging stations, data centres, and generators like solar and wind farms) to connect to distribution networks. This completes stage one of our Network connections project, which makes connecting to networks easier, faster, more equitable and more consistent across New Zealand. The new requirements take effect from 1 December 2026.
  
  We have also consulted on proposals to remove barriers so more electricity from small-scale solar, wind and solar farms, and other distributed generation can power the country. (Recommendation 11)

Other important milestones over the last quarter include

• Implementing stronger retail data monitoring: The Authority published its first insights from our retail data monitoring on 15 December with a Disconnections for Non-Payment Dashboard. The disconnections dashboard is part of our work to strengthen monitoring and accountability in New Zealand’s retail electricity market and support better outcomes for consumers. (Recommendation 3)
  
  
• Consulting on requiring half-hourly data for reconciliation: Our consultation on a proposal to require half-hourly metered electricity data to be submitted into the reconciliation process closed on 21 November. This proposal will strengthen price signals and better enable New Zealanders to make informed decisions about using and generating their electricity. We expect to make decisions in late March 2026. (Recommendation 18)
  
  
• Review of the Value of Lost Load: We began a review of the Value of Lost Load in December. This reflects the value consumers place on reliability and is a key parameter that informs grid and other investment decisions that affect security of supply. We intend to release an Issues and Options paper for consultation by mid-2026. (Recommendation 16)

MDAG’s recommendations form an important part of the Authority’s work programme. We will continue to report on our progress through these quarterly updates.

About the Market Development Advisory Group's work