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Summarised by Centrist
New Zealand is grappling with rising electricity prices, driven by market pressures and structural inefficiencies, as businesses and households brace for higher costs in 2025.
Wholesale electricity prices have surged, leaving independent retailers and manufacturers struggling to manage risk and remain competitive.
From April, households will see an average $15 increase in monthly power bills, while large businesses face steeper hikes due to rising transmission and distribution charges approved by the Commerce Commission.
Electricity companies warn that future prices are unlikely to ease, with the futures market showing sustained increases for years ahead. Huia Burt, CEO of Electric Kiwi, likened the situation to refixing mortgages, saying, “We have to fix electricity prices in advance, but the costs are very high.”
Rising energy prices have already forced closures in key industries, such as pulp mills, as manufacturers find operations unsustainable. Margaret Cooney of Octopus Energy warned that without reform, the dysfunctional electricity market risks tipping New Zealand’s economy.
While the government has launched an Energy Competition Task Force to address inefficiencies, progress has been slow.
Globally, the explosion of data centres, driven by AI and other energy-intensive technologies, is adding to electricity demand. According to the International Energy Agency, global electricity consumption is expected to rise by an amount equal to the total annual power consumption of all of Europe and Africa combined by 2030.
Read more over at RNZ and Oil Price.com
