Unlocking the benefits of battery energy storage systems

Wholesale market arrangements for battery energy storage systems: Code amendment consultation

Upcoming Open Closed Decision

View submissions Submissions closed 30 June 2026

Decision

Thank you to everyone who provided feedback. After considering all submissions, we've decided to amend the Code to improve wholesale market operations for utility-scale battery energy storage systems (BESSs) and support related software updates.

BESSs can play a critical role in maintaining security and resilience, especially as New Zealand transitions to a more variable power system. They can help balance intermittent generation from solar and wind, support efficient investment, and reduce electricity prices for all consumers. To unlock these benefits, regulatory settings governing BESSs must be fit-for-purpose.

We have decided to proceed with the proposed amendment, with some changes.

We will implement the amendment in two phases because the software upgrades will take time to deliver:

Initial phase – from 30 October 2026

BESSs will be required to be dispatchable when consuming
As an interim measure, BESS owners will be able to trade based on their expected capabilities and update trade quantities after gate closure if expected capability changes

Final phase from – 31 March 2028

BESS owners will be able to trade their full capacity with the introduction of state-of-charge constraints
BESS owners will submit bids to charge and offers to discharge using a single trade form and receive a single dispatch for their system.
All BESSs will have a one-hour gate closure regardless of their connection type and operational state.

The main change from our proposal is that the move to a one-hour gate closure for embedded BESSs will now be deferred until 31 March 2028.

We intend to:

release a Code amendment consultation in late 2026 that will cover wholesale market arrangements for BESS-hybrid stations. This will follow from the Common quality and wholesale market arrangements for BESS and BESS-hybrids issues and options paper
before 31 March 2028, hold workshops to take BESS owners through the details of the final phase of the Code amendment.

Decision paper

Wholesale market arrangements for battery energy storage systems - Decision paper

Consultation

Following our wholesale market arrangements for battery energy storage systems issues and options paper, we sought feedback on the proposed Code amendment necessary to address key issues with existing wholesale market arrangements for BESS.

Webinar on the Code amendment consultation and Common quality and wholesale market arrangements for BESS and BESS-hybrids issues and options paper

We ran a webinar providing an overview of our proposals. This highlighted the key issues for feedback, along with questions and answers from participants. Watch the webinar

Consultation paper