A recent forum at the EMA with Energy Minister Simeon Brown made it unequivocally clear that solving New Zealand’s energy security problem is a priority for the government.
For the business community, this focus on building affordable backup capacity into the energy system is overdue.
Discussions about energy have largely centred on the transition to renewables. Around 85% of New Zealand’s electricity is generated from renewable sources, and that proportion is expected to grow.
Yet the practical challenge of keeping the lights on during dry years remains unresolved. Brown’s message to EMA Members was that New Zealand can, and should, pursue both objectives at the same time.
The centrepiece is the proposed LNG import terminal at Port Taranaki. But the proposal remains contentious.
Many environmental groups oppose further investment in fossil fuels, while some political opponents argue New Zealand should move directly to a fully renewable system. Brown acknowledged those criticisms but posed a challenge that deserves consideration: what is the credible alternative for ensuring reliable electricity when hydro lakes are low, the wind is not blowing and the sun is not shining?
His argument was not that LNG replaces renewables. Rather, it provides the firming capacity needed for an overwhelmingly renewable electricity system to operate without severe shortages or price shocks.
Without that backup, New Zealand risks either soaring wholesale electricity prices or diverting scarce gas supplies away from industrial users, forcing factories to slow production or shut down altogether.
The EMA’s 2026 Policy Directives place certainty, stability and investment confidence at the heart of New Zealand’s economic priorities. Businesses consistently tell us they can adapt to change, provided they understand the rules and can invest with confidence. What they struggle with is unpredictability.
Energy has become one of the clearest examples.
The cost of building LNG infrastructure will attract scrutiny. Yet businesses are already paying a substantial price for instability.
Brown pointed to estimates that last year’s energy price shocks cost the New Zealand economy billions of dollars, while dry-year risk continues to inflate wholesale electricity prices before a single kilowatt-hour is generated. Against that backdrop, the cost of providing firming capacity becomes part of a broader calculation about protecting economic activity, safeguarding jobs and maintaining industrial competitiveness.
The government is not presenting LNG as the future of New Zealand’s energy system. Brown repeatedly stressed that it is a transitional tool designed to support continued growth in renewable generation. Investment in wind, solar, geothermal and battery storage continues, with New Zealand remaining on track to maintain one of the highest proportions of renewable electricity generation in the developed world.
Reliable backup generation may also make renewable investment more attractive by reducing risk for developers.
That broader strategy aligns closely with several EMA policy priorities. Efforts to accelerate renewable projects through fast-track consenting, strengthen oversight of electricity markets, reform transmission and distribution settings, and introduce stronger obligations on generators to manage dry-year risk all support the certainty businesses have been calling for.
There are, of course, legitimate questions still to answer. The final cost of the LNG terminal, its ownership model and long-term commercial arrangements all deserve close examination.
Businesses will also expect any reductions in wholesale electricity prices to flow through to power bills rather than being absorbed elsewhere in the market. Regulatory reform must continue if New Zealand wants greater competition, investment and innovation across the electricity sector.
But none of that changes the underlying challenge. Economic growth depends on reliable energy.
Manufacturers cannot simply stop production because lake levels are low. Major industrial users need confidence that electricity will be available at prices that allow them to remain internationally competitive.
The EMA has consistently advocated for policies that encourage investment, improve productivity and give businesses confidence to plan for the future.
The transition to a cleaner energy system remains essential. But so does ensuring New Zealand has an energy system capable of supporting growth every day of the year.
If LNG provides the bridge that allows both objectives to be achieved, it should be judged on whether it delivers the certainty and stability New Zealand businesses have been asking for.