Genesis Energy says the use of coal for electricity generation has peaked, despite high levels of burning this year.
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It said coal plays a key back up role for power, but its use is dropping as other sources increase.
The company's shareholders were told this morning that Genesis will run a trial in burning biomass at the Huntly power station next year.
If successful, the company would seriously look at biomass supply, transport and storage options, chief executive Marc England said.
But he said coal will still be needed for the next few years.
"Reliable gas supplies will likely remain a challenge for the sector through a transition to a lower carbon future. Similar but greater issues are now playing out in Europe with tight gas supplies playing havoc with energy markets in several countries."
England said coal needs to be used to fill any shortfall in hydro, wind or gas.
"However, the good news is, while we had to burn a lot of it this year, we believe the electricity sector has reached peak coal. With new renewable generation being enabled by Genesis and our competitors we expect much less coal-based thermal back up generation over the next few years."
He said the North Island blackouts in August were a reminder that short-term demand spikes may need different market or generation solutions going forward.
"We're co-operating with the various enquiries into that event as part of the industry's shared accountability for the outages."
