Energy Abundance for New Zealand

Hon David Seymour, ACT Leader
Wednesday, 5 November, 2025
Energy Resources Aotearoa

Introduction

What a great day to talk about energy. Guy Fawkes celebrations release it spectacularly. Unfortunately when it comes to the energy sector, people are far from double happy with skyrocketing bills. They say the market is a fizzer and it can’t hold a roman candle to past glories. What are we to make of all this?

Let’s start with the fundamentals. We have a stable democracy and the rule of law, we have high life expectancy, abundant natural beauty, we are prosperous and enjoy a high quality of life. We are lucky that, as a rule, most people, most of the time, do what they say they’re going to do. People who’ve done business around the world will tell you how valuable that is.

What do we have to complain about? You can often judge the happiness of the nation by the issues that are driving people. Cast your mind back to happier and simpler times. It’s hard to believe that not that long ago the biggest debate around the BBQ was whether we’d be better off with a tea towel design for a flag, and whether John Key could get Pandas to Wellington Zoo. If only we could get back to 2016.

However, the last six or so years have taken their toll. It started with March 15th, 2019, an event that shook us to our core. Then came Covid, and the then Government’s very expensive medicine.

Now we’re in a position of economic recovery – things are improving, last week’s business confidence survey ticked up, while interest rates are going down and food prices have stabilised for the first time in years.

Ships don’t turn on a dime, though. It will be a while before we’re relaxed enough to put a flag debate ahead of paying rates and insurance, putting food on the table or keeping the lights on. That last one, keeping the lights on is something that is on a lot of families’ minds.

Identity Politics vs Problem Solving

The long trouble of the last six years has had another effect. It’s worn our patience. It’s left us more open to blaming someone than usual. Identity politics has primed us to point the finger. Instead of humanity facing challenges, like how do we get to the moon, we are divided into identities where it’s always someone else’s fault.

I reject this. Humans have more in common than any difference made up by identity politics. It’s harder to solve real, practical problems when you’re busy finding reasons to resent your fellow New Zealander. We need a return to shared, pragmatic problem-solving approach where life is a positive-sum game, not a blame game.

I heard one commentator on RNZ state that ACT wants to stop prices ever dropping via the Regulatory Standards Bill. They went on to say that, because the Regulatory Standards Bill protects property rights from regulations that would devalue private property, electricity can never get cheaper. This was a revealing comment, and not just because they don’t understand the RSB. It reflects the zero-sum mentality that we must violate property rights to get ahead. In fact, the opposite is true.

It's true, the Regulatory Standards Bill makes it harder to pass laws that impair property rights. But there is another way to improve affordability, that is investment in more generation capacity. It leads to more competition, which leads to lower prices. If we want energy abundance, we should recognise generation requires long-term investment. That means not seeking to undermine property rights but to strengthen them.

How We Got Here

New Zealand has long punched above its weight when it comes to energy. Thanks to our natural resources and the foresight of past generations, we’ve enjoyed some of the lowest electricity prices in the developed world. Hydro, geothermal, and gas – combined with a market structure that incentivised efficiency – meant power that was not only affordable but reliable and clean.

In that era of abundance, there were even protests outside Parliament to declare a 'Climate Emergency' – it’s not that long ago people were protesting that New Zealanders used too much energy!

Today people don’t care about slogans like a "just transition". Instead, they want reliability, affordability, and certainty. They want their lights to turn on when they flick the switch. They want their homes to be warm in winter and cool in summer. They don’t want power prices that drain the last dollar from their account, and the last jobs from their town.

New Zealand’s cheap energy spigot seemed to be turned off a couple of years ago. Why? Three things happened at once.

• NZ’s natural gas reserves turned out to be much less plentiful than we thought.

• The hydro lakes were much emptier than usual due to lack of rainfall.

• The Commerce Commission allowed lines companies to increase their prices, due to higher interest rates.

The first two changes pushed up the spot price of electricity. That is the price that electricity retailers and major industrial users pay – if they hadn’t already locked in long-term contracts. The third change – though barely mentioned – was the most important in driving up household power bills. The lines price increased by 2.08c/kWh in Q3 2025 compared to the same quarter the previous year. This equates to a $12/month (6%) increase to electricity bills. In the same period the energy price increased by 1.29c/kWh. That’s a $7.50/month (3.7%) increase to electricity bills.

Don’t Panic

Energy challenges hurt Kiwi households and businesses last winter. But they are temporary challenges. New Zealand’s long-term energy future should not be decided based on a couple of bad years. Too many people have rushed to scapegoat particular companies – or indeed, particular technologies. Many want to tear down the electricity system that has served us well, in order to deal with short term pain. Such vandalism could make a future bad year even worse.

Meanwhile, the Greens mentioned in Parliament they were looking into wooden windmills. Yes, you heard that right – wooden windmills. If you look at the Dutch and where they are on the technology curve, they may well be a decade ahead of us already. Under the Greens, they could be four centuries ahead of us. This from the same crowd who oppose mining the rare earths that modern renewables depend on and want to ban the very petroleum products used to build turbine blades.

The sugar hit solution would be to take this bad year, panic, and try to tear the system down. That’s the wrong path. It’s bad economics, bad engineering and, in the long run, bad politics.

What the Government is Doing

The Government is making progress to improve the underlying policy settings, though. We repealed the Labour-New Zealand First Government’s disastrous ban on offshore oil and gas exploration – a ban that cost this country billions. That policy was economic vandalism dressed up as virtue signalling. It forced us to import more coal, pushed up prices, and told the world New Zealand was closed for business.

We’re restoring investor confidence by telling the world that New Zealand takes energy security seriously.

The Offshore Renewable Energy Bill, will create a framework to unlock investment in offshore wind and marine energy. This is the kind of forward-focused, rules-based approach New Zealand needs. We’re laying the foundation for private capital to flow – with clear regulations, firm timelines, and proper protections, and it should pass before Christmas.

Because if we want affordable, low-emissions electricity, we need to unleash the full mix: wind, hydro, solar, geothermal, gas, and – yes – coal.

Now, some might scoff at that. But let me tell you something: every renewable energy company that’s come through my office has said the same thing. "If we can’t get a firm thermal contract to underpin our investment in renewables, we won’t build the renewables."

We are also replacing the Resource Management Act – one of the biggest barriers to energy development in this country. The RMA has choked investment in generation, in transmission, and in infrastructure. It allowed anti-development activists to delay, deny, and derail projects that would have lowered power bills and strengthened supply.

Under these reforms, energy infrastructure will actually get built. Transmission upgrades will get delivered. Projects that generate value for New Zealanders will get out of the courts and into construction.

More Ideas Where Those Came From

Although the RMA and Oil and Gas Ban are the most important things to fix, they are not the only barrier in the way of energy abundance. I have five concepts that are worth considering. They’re not government policy. But we all need ideas for a better tomorrow.

1. Freeing the Gentailers

The Government has over half a trillion dollars of assets on its balance sheet, but capital constraints make it hard to build the roads and hospitals we need. This has occurred because politics paralyses us from making pragmatic, problem-solving decisions.

Owning a 51% share of three power companies is an odd investment for the Government. It is a large enough share to control them – after all, we must think of the KiwiSaver funds that hold the rest – and it is enough to block them from making the investments that could power New Zealand’s future.

The Government has announced that – for now – it won’t stand in their way and that we will front the capital for a good plan for more investment. But why should we need to be asked? And what if a future government isn’t so willing to front the equity?

ACT says the Government should sell down the stake in the power companies and set them free to invest without the political tides that ebb and flow too frequently for serious investment decisions.

2. Backing Firm Thermal – Including Coal

Coal isn’t trendy. But it is reliable. Until someone finds abundant new gas fields or brings new storage technologies to scale, coal will provide essential firming capacity. As gas supply tightens, the role of coal will only grow.

That role should be put in perspective though. In NSW, about 50% of generation is coal. If our approx. 5% is excessive, then the convicts really have reinvented themselves as climate criminals. Viewed globally, using some coal to enable more renewable is not a bad deal.

The previous government not only banned new coal boilers, it made resource consenting for coal mining harder than ever – while simultaneously importing record amounts of coal. This is being fixed in RMA reform, we need to treat coal mining like any other sort of mining, on its merits. Climate impacts are already assessed under the Emissions Trading Scheme.

3. Keeping Coal and Gas Boilers Firing

Much of the economy is electrifying naturally – electric cars, heat pumps, etc. This is welcome. Electricity is, after all, a cleaner and usually more efficient energy source. But it isn’t always the perfect energy source for every job. Sometimes, the best source of industrial heat is coal.

As with electricity, what if we used 10% coal? What would our emissions look like? How would that compare to Aus, China, USA? Surely a little sin justifies an otherwise blameless existence?

Despite this, Megan Woods and the Labour government chose to ban all new coal boilers and phase out existing boilers by 2037. This won’t reduce emissions of course – the Emissions Trading Scheme takes care of that – but it will push up costs for businesses and mean more electricity generation capacity needs to be built, unnecessarily.

Under the RMA replacement regime, such a ban won’t exist.

4. An Adult Conversation About Nuclear Based on Science

We should also be enabling innovative future sources of energy. Stretching the geothermal resource further is one obvious place to look – and the government is spending $80 million doing just that. Small modular reactors are another.

SMRs are small, safe-by-design nuclear reactors. And I think New Zealand – and nuclear technology – are now mature enough to give nuclear energy a second look.

It doesn’t need to cost the earth. Countries like France and South Korea have shown that, with sensible regulations, nuclear power can be delivered in an affordable, timely manner. This will be even more true with factory-built SMRs, as they are developed.

But it doesn’t need to be taxpayers’ money at stake. Government just needs to get out of the way and allow the best technology to win.

5. Allowing the Lakes to be Used to Their Full Extent

Our hydro lakes are an extraordinary asset. But current resource consents force operators to hold lake levels artificially high – even in dry years. That drives up costs and reduces flexibility. It’s time to revisit those rules and allow better balancing between environmental needs and energy affordability.

Conclusion

A typical energy project in New Zealand still takes 8-10 years to go from proposal to power. In Australia or Canada, it’s often half that. We have to close that gap – not with more subsidies, but with smarter regulation.

Hearings and appeals to reconsent the Clyde and Roxburgh dams, and Wairakei, ran from 2001 to 2007. It took 18 years to re-consent the Raetihi hydro dam - and when that consent was finally renewed, the number of consent conditions had increased from 4 to 136.

We are making progress regulation by regulation, project by project. We’re reforming the regulatory settings. We’re investing in core infrastructure. And we’re ensuring that New Zealand’s energy system remains secure, affordable, and reliable.

We’ve been through tough years from tragedy to pandemic to economic strain, but we’re still standing, still thinking straight, and still capable of building something better. The same country that once turned rivers into reliable hydro, that found energy deep in the earth, that connected every home to the grid before most nations even dreamed of it, is more than capable of meeting today’s challenges.

What we need now is not hysteria, but humility and hard work. Not slogans about “transitions,” but certainty about investment. Not another grand plan from Wellington, but the freedom for New Zealanders to get on and do what they do best by innovating, building, and delivering.

If we stay true to that spirit, we can ensure that our children will never worry about whether the lights come on or whether they can afford to heat their homes. They’ll live in a country where energy is abundant, where industry thrives, and where prosperity is shared because we refused to let panic rule over principle.

We’ve hit a few bumps in the road, but the track ahead is sound. Let’s cull the hysteria, trust the evidence, and get back to the practical business of powering New Zealand. Fairly, affordably, and for generations to come.

Thank you.