Markets

Energy project modelling in the New Zealand electricity market

New Zealand’s electricity market is an energy-only market with nodal pricing, where spot prices are set at more than 200 points on the grid and hydro, geothermal and wind supply most power. Gridcog models how solar, batteries and multi-party projects earn under New Zealand’s wholesale prices, reserves and lines company tariffs.

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  • A record 96.4% of New Zealand’s electricity came from renewable sources in the last quarter of 2025, and solar output rose by more than 70% on a year earlier.

    MBIE, March 2026

  • Wholesale prices are set at more than 200 nodes, and New Zealand is one of a handful of energy-only markets with no capacity payments.

    Gridcog

  • Three 100 MW / 200 MWh grid-scale batteries came online between early 2025 and October 2026, at Ruakākā, Glenbrook and Huntly.

    ESS News and Enerdata, 2025–2026

  • In Revolve’s Gridcog model for Mangawhai Hills, about 700 homes with roughly 7 MW of rooftop solar generate around 105% of their annual consumption, and stacking battery value cut the size of the grid connection needed.

    Revolve, February 2026

How the market is set up

How is the New Zealand electricity market set up?

As a nodal, energy-only market across two islands joined by a high-voltage direct current (HVDC) link. Generators and buyers trade at grid injection and grid exit points, prices move with transmission constraints and losses, and there is no capacity market: revenue comes from energy, reserves and contracts.

RoleWhoWhat it means for projects
01Regulator
Electricity Authority (Te Mana Hiko)Sets the market rules (the Electricity Industry Participation Code) and publishes market data
02Grid owner and system operator
TranspowerOwns and runs the national grid, dispatches generation and buys reserves
03Lines companies
29 electricity distribution businesses, regulated by the Commerce CommissionSet the network tariffs most sites pay, and connect distributed projects
04Large generator-retailers (gentailers)
Genesis, Contact, Meridian and MercuryOwn most generation and retail customers; subject to new non-discrimination rules from 1 July 2026

How does New Zealand compare with Australia’s NEM?

Both are energy-only markets, but they price location and time very differently.

New ZealandAustralia’s NEM
Locational pricingNodal: more than 200 pricing nodesZonal: five regions, adjusted by marginal loss factors
SettlementHalf-hour trading periodsFive-minute settlement
Capacity paymentsNone (energy-only)None (energy-only)
Frequency and reserve servicesInstantaneous reserve and frequency keepingFrequency Control Ancillary Services (FCAS)
Australia’s National Electricity Market (NEM)Western Australia’s Wholesale Electricity Market (WEM)Zonal pricing, capacity markets and the electricity market shakeup

Wholesale pricing

How does wholesale pricing work in New Zealand?

At each node, in real time. Since 1 November 2022, prices have been calculated in real time from dispatch, and the final price for each half-hour trading period is a time-weighted average of those prices. Prices differ between nodes as transmission constraints and losses bind, so where a project connects matters.

Hydro storage drives the market. In August 2024, low hydro storage and limited gas supply pushed wholesale prices up, before wet weather, lower demand and more wind brought them down again by November. That exposure to dry years is a big part of the case for flexibility and storage.

In May 2026, the Electricity Authority published a discussion paper on moving to five-minute settlement to suit fast-responding assets such as batteries, but its view is that market conditions don’t support the change yet.

An intro to wholesale energy marketsCapacity markets vs energy-only marketsWholesale market price data in Gridcog

Reserves

What reserves and ancillary services are there in New Zealand?

Instantaneous reserve is the main one for batteries. Transpower, as system operator, buys reserve in the wholesale market for every half-hour trading period, to cover the sudden loss of a large generator or transmission asset (a contingent event).

A battery can offer reserve both by cutting its charging, as interruptible load, and by discharging, and New Zealand has run a national instantaneous reserve market since October 2016.

Comparing contingency frequency control markets in Australia and the UKBattery energy storage system (BESS) modelling
ServiceWhat it doesResponse
01Fast instantaneous reserve (FIR)
Arrests the drop in frequency after a large lossWithin six seconds (one second for interruptible load), sustained for at least 60 seconds
02Sustained instantaneous reserve (SIR)
Restores frequency after the initial dropWithin 60 seconds, sustained for at least 15 minutes
03Frequency keeping
Holds frequency close to 50 Hz in normal operationContinuous
04Other services
Over-frequency reserve, voltage support and black startContracted by Transpower

Batteries and new rules

How are batteries changing the New Zealand market?

Quickly, and the rules are catching up. WEL Networks and Infratec commissioned a 35 MW battery at Huntly in late 2023; by October 2026, three 100 MW / 200 MWh batteries were operating, all in the North Island, where most fossil fuel backup sits.

The Electricity Authority is changing how batteries trade. From 30 October 2026, batteries must be dispatchable when charging. From 31 March 2028, owners will submit charging bids and discharging offers on a single form, with state-of-charge constraints and a one-hour gate closure for all batteries.

Battery energy storage system (BESS) modellingCo-located battery storage
BatteryOwnerSizeStatus
01Huntly
WEL Networks and Infratec35 MW / 35 MWhCommissioned late 2023
02Ruakākā
Meridian Energy100 MW / 200 MWhOnline early 2025
03Glenbrook-Ohurua Battery 1
Contact Energy100 MW / 200 MWhCommissioned May 2026
04Huntly
Genesis Energy100 MW / 200 MWhOpened October 2026; a second 100 MW / 200 MWh unit is due in 2028

Market reforms

What is changing in the New Zealand market?

A package of competition and flexibility reforms. After the August 2024 price spike, the Electricity Authority and the Commerce Commission set up the Energy Competition Task Force, and several of its measures now apply.

Volume and shape: the cost of electricity and the value of flexibilityDemand response and flexible loads
MeasureWhat it doesStatus, November 2026
01Non-discrimination obligations
The four large gentailers can’t treat independent retailers worse than their own retail armsIn force from 1 July 2026
02Standardised super-peak product
A hedge contract for peak periods, to help retailers and flexible assets manage price riskVoluntary trading since January 2025; regulation consulted on in 2025
03Emergency Reserve Scheme
Paid demand response for emergencies, run by Transpower as system operatorConfirmed on 13 January 2026; expected towards the end of 2026
04Peak export rebates
Distributors pay rebates to eligible small consumers who export at peak timesFrom 1 April 2026; to be based on long-run marginal cost from 1 April 2027
05Time-of-use and buy-back plans
Retail plans with cheaper off-peak prices and fair rates for peak exportsExpected for most consumers by 1 July 2026

Network tariffs

How do network tariffs work in New Zealand?

Through 29 lines companies, each with its own tariffs, plus transmission charges passed through from Transpower. That makes tariffs one of the biggest variables in a distributed project: Revolve’s team found New Zealand’s tariffs can be unusual, with demand rules and sub-tariffs that differ from one network to the next.

Transmission pricing has also changed. The regional coincident peak demand (RCPD) charge, which rewarded sites for cutting load at regional peaks, was removed from September 2021 as part of the move to a new transmission pricing methodology. The Electricity Authority estimates the removal added around 150 MW to daily peak consumption in 2022. The new methodology, in force since 1 April 2023, charges grid users in proportion to the benefit they are expected to get from transmission investment.

Network demand charges: how tariff complexity affects the flexibility business caseCo-incident peak demand charges

Modelled in Gridcog

What can a battery fleet do for a New Zealand community energy project?

Shrink the grid connection it needs. Revolve, an Auckland-based energy engineering consultancy, used Gridcog to model Mangawhai Hills, a regenerative residential development north of Auckland on a private network with a single connection to Northpower.

By stacking the value from the batteries, Revolve reduced the size of the grid connection the development needed, which lowered both upfront capital costs and network operating costs. Gridcog let the team compare scenarios, such as a small grid connection with a battery and solar against a large connection with high capital costs and a smaller battery, from the point of view of the developer, the lines company, residents and the PPA provider.

Mangawhai Hills, modelled by Revolve in Gridcog

  • About700

    Homes on the private network

  • Around10 kW

    Rooftop solar per home, with a hybrid inverter and a battery

  • About7 MW

    Total solar

  • About105%

    Solar generation against annual consumption

  • Backup, arbitrage and peak shaving

    Battery fleet designed for

Embedded networks and private wireMicrogrid modellingRead the Revolve case study

Modelling a community, C&I or grid-scale project in New Zealand?

Model your project in Gridcog

How Gridcog models NZ

How does Gridcog model the New Zealand electricity market?

Node by node, tariff by tariff and party by party. Gridcog simulates how a New Zealand project uses and trades energy, then runs cashflows, IRR and NPV for everyone involved.

New Zealand spot prices from the Electricity Authority, downloaded, cleaned and loaded into the Gridcog Library, so projects can be modelled at the node they connect to.

New Zealand network tariffs, including unusual demand rules and sub-tariffs, built into the Library by Gridcog’s Industry team.

Compare the same project from the perspective of the developer, lines company, residents and PPA provider, with energy and money tracked between them.

Shared assets, private networks behind a single grid connection, and battery fleets sized to cut the connection a site needs.

Demand, renewable output and market conditions that change year by year over a 25-year model.

Customers

Who uses Gridcog for New Zealand projects?

All case studies

Revolve

‘Gridcog was unique among the packages we found because it could handle flexible time series data changing over each year of a 25 year period.’

Shay Brazier, Founder and Technical Director

Auckland-based energy engineering consultancy working on community energy, commercial and industrial projects, and utility-scale solar and storage

Three to four people use Gridcog regularly for energy flow and commercial modelling, including the Mangawhai Hills development.

Experts

Who are Gridcog’s New Zealand market experts?

  • Catalina Villaro

    Senior Energy Analyst

    Built Revolve’s complex New Zealand demand rules and sub-tariffs into the Gridcog Library. Ask her about distributed energy and settlement reform.

  • Genna Boyle

    CCO and Head of EMEA

    Began her career in energy trading at Contact Energy in New Zealand, then helped set up the trading team at Limejump and went on to lead its commercial team.

  • Fabian Le Gay Brereton

    CEO and Co-Founder

    Co-founded Gridcog and leads it as CEO. Ask him about entering a new market and merchant exposure.

Who models New Zealand projects in Gridcog?

Consultants, developers, networks and property developers.

Energy modelling software for consultantsModelling software for renewable developers and IPPsModelling for distribution networksEnergy modelling for property

Frequently asked questions

The Electricity Authority (Te Mana Hiko) regulates the market and writes its rules. Transpower owns the national grid and acts as system operator, dispatching generation and buying reserves. The Commerce Commission regulates the 29 lines companies that run local networks. Four large gentailers, Genesis, Contact, Meridian and Mercury, own most generation and serve most retail customers.

It means wholesale prices are set separately at each point where power enters or leaves the national grid, more than 200 nodes in all. Prices differ when transmission constraints bind or losses rise, so two projects in different places can earn different prices for the same half-hour. Australia’s NEM, by contrast, sets one price per region.

No. New Zealand is one of a handful of energy-only markets, alongside Australia’s NEM, Texas’s ERCOT, Alberta and Singapore. Generators and batteries earn from selling energy and reserves, and from hedge contracts, rather than from payments for being available. Scarcity in dry years shows up as high wholesale prices instead.

The reserve Transpower buys to cover the sudden loss of a large generator or transmission asset. Fast instantaneous reserve must respond within six seconds and last at least 60 seconds; sustained instantaneous reserve responds within 60 seconds and lasts at least 15 minutes. Batteries can provide it by reducing their charging or by discharging.

The Electricity Authority decided in September 2026 to change how batteries trade. From 30 October 2026, batteries must be dispatchable when charging. From 31 March 2028, owners will submit charging bids and discharging offers on a single form, with state-of-charge constraints giving the system operator visibility of available energy, and all batteries will have a one-hour gate closure.

A company that both generates and retails electricity. In New Zealand, Genesis, Contact, Meridian and Mercury are the four large gentailers. Since 1 July 2026, Electricity Authority rules require their wholesale arms not to treat independent retailers worse than their own retail businesses, part of a package of measures to boost competition.

They were removed. Regional coincident peak demand (RCPD) charges, which rewarded sites for cutting load at regional peaks, ended in September 2021 as Transpower moved to a new transmission pricing methodology, in force since April 2023. The Electricity Authority estimates the removal added around 150 MW to daily peak demand in 2022.

Yes. Gridcog models New Zealand projects at the node they connect to, with spot prices from the Electricity Authority, lines company tariffs built into the Library, multiple parties and private networks, and time series that change over 25 years. Revolve uses it for community, commercial and utility-scale projects, including Mangawhai Hills.

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Model your New Zealand project in Gridcog

Request a demo and we’ll show you how Gridcog models your solar, battery or community energy project in New Zealand, from nodal prices to lines company tariffs.

The team behind Gridcog

Fabian Le Gay Brereton, Chief Executive Officer and Co-Founder of Gridcog

Fabian Le Gay Brereton

Chief Executive Officer & Co-Founder

Previously co-founded Greensense, acquired by ERM Power (now Shell Energy).

Pete Tickler, Chief Product Officer and Co-Founder of Gridcog

Pete Tickler

Chief Product Officer & Co-Founder

Co-founded Greensense and led digital innovation at ERM Power (now Shell Energy).

Genna Boyle, Chief Commercial Officer and Head of EMEA at Gridcog

Genna Boyle

Chief Commercial Officer & Head of EMEA

More than 10 years in energy strategy, trading and renewables, with senior roles at Battery Optimiser and Limejump.

Which other markets does Gridcog model?

Gridcog supports 40+ markets, including Australia’s NEM and WEM, Great Britain, Ireland, Germany, France, Spain, the Nordics and, in Europe, Poland, Italy, Portugal, the Netherlands and Belgium.

All markets

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