Huntly power station Photo: RNZ
The country's big four power companies are looking to extend the life of the Huntly power station to improve energy security.
Genesis Energy, which owns the station, said it has agreed with Mercury, Meridian, and Contact to look at ways to extend the life of the coal and gas fired units due for retirement in the next few years.
The companies said they were prompted by last year's power supply scare when Huntly was needed to prop up electricity supplies, when gas and renewable sources were low.
The four generator-retailers (gentailers) said they were looking at options such as a strategic fuel reserve and insurance-style commercial arrangements.
Genesis said new arrangements could be in place in 2026, subject to regulatory approval.
Meridian chief executive Neal Barclay said New Zealand "has one of the most reliable energy systems in the world", but last year, combined with ongoing gas shortages, meant alternatives needed to be considered.
"While important, a deal like this is not a silver bullet on its own. It is not available to us until 2026 at the earliest so we need to continue to build more generation capability and explore ways to reduce demand over peak periods and dry years, whether that's through demand response with industrial customers or more flexible options for residential customers," Barclay said.
Mercury chief executive Stew Hamilton said the energy issue was a "complex challenge" with different solutions.
"There's a range of other activity underway to help deliver secure and affordable electricity, such as building more generation quickly," he said.
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