At Total Utilities, we’re passionate about helping Kiwi businesses navigate the complexities of energy procurement—especially in a market where prices continue to climb and certainty is hard to come by.
Recently, we partnered with a nationwide truck dealership and service agent facing a familiar challenge: a looming electricity contract renewal with a significant price increase from their existing retailer. With multiple sites across Aotearoa and rising operational costs, they needed a smarter, more strategic approach to energy management.
That’s where we came in.
Through a competitive tender process, market benchmarking, and strategic negotiation, we secured a new electricity contract with an alternate supplier—15% lower than the renewal offer. But the benefits didn’t stop there.
The Results:
✅ 15% reduction in electricity costs ✅ Improved contract terms and flexibility ✅ Enhanced long-term energy certainty across multiple locations
This outcome is a testament to the power of informed decision-making and proactive energy strategy. By leveraging market insights and our deep industry expertise, we helped our client not only save money but also gain confidence in their energy future.
Why It Matters:
Energy is often one of the top operating expenses for businesses, yet many organisations renew contracts without exploring alternatives. In today’s volatile energy landscape, taking a strategic approach can unlock significant savings and resilience.
If your business is approaching a contract renewal or simply wants to understand its energy options better, we’d love to kōrero. Whether you’re a single-site operator or a nationwide enterprise, we’re here to help you make smarter energy decisions.
📣 Let’s Talk
If your business is approaching a contract renewal, managing multiple sites, or simply wants to explore smarter energy options—now is the time to act. Reach out to Total Utilities for a no-obligation kōrero about how we can help you reduce costs, improve certainty, and future-proof your energy strategy.
Stay informed. Stay prepared. As New Zealand continues its transition to a low-carbon future, Total Utilities will keep bringing you the latest insights and opportunities to stay ahead.
The Current State of Affairs and the Impact of Deferred Investments
Well, not that much sadly, but the optimist in me sees green shoots of regulatory progress, some generation development activity (at last), but a continued chorus of gas concerns from the choir of Generator/Retailers (gentailers) who benefit hugely from fossil fuel generation being the margin, price setting unit for spot prices.
Of course, mother nature plays her hand in New Zealand Electricity prices, increasingly so as we live with the outcome of deferred investment in new generation and the low level of attractiveness of New Zealand for new investment due to the market power exercised by a largely state owned incumbent generation sector.
Well, there have been some announcements that might ordinarily be cause for optimism; the formation of the Energy Competition Taskforce which brought together the three historically benign regulators in the Electricity Authority, the Commerce Commission and MBIE to address the mounting (mountain?) of evidence that New Zealand Electricity market isn’t delivering the outcomes we would expect for a nation so well-endowed in natural energy resources.
To their credit the task force has already implemented changes that might help, albeit at the margin with developments like adding super peak prices to the ASX energy futures market which has seen some improved liquidity and price disclosure across super peak products, and perhaps a lower peak/off-peak differential in pricing, though this may be more a reflection of increased fossil fuel pricing in off-peak periods. IE higher overall prices.
The task force has also announced a consultation on several potentially significant changes grouped as “level playing field measures”. The “proposed nondiscrimination obligations” would require Gentailers not to treat themselves substantially differently from their non-integrated competitors, or to treat different competitors substantially differently. Given the openness with which the vertically integrated incumbents have posted losses on retail while making record overall profits over the last few years this seems blindingly obvious, as a measure. It would see gentailers having to build a portfolio of internal transfer prices for hedges which would make it far more transparent for the regulators to assess hedge access (market power) issues.
Should this measure still not result in the market delivering competitive outcomes, a second measure sits behind this as a backstop, he proposed “virtual disaggregation measures” refers to splitting the flexible generation capacity of participants who exceed a certain market share into two components: a portion that would be required to be offered, and a portion that would be used by the participant as they see fit.
The Role of Government Dividends
It remains to be seen the extent to which the task force resists the inevitable strong lobbying against these measures from the incumbent players and if implemented how long it takes before we see a return to meaningful retail competition and real customer innovation.
My bet is that we will see all sorts of ballyhoo from the incumbents about how hard they are doing great, and of course, the elephant in the room is the dividends received by the government from their state-controlled gentailers, Genesis, Meridian and Mercury. I’m yet to see an economic analysis to support any assertion that the value of those dividends outweighs the value to our economy of cheap abundant energy delivered through an undistorted or workable efficient market….
However, the Q4 2024 MBIE Energy consumption Stats show that the current market isn’t working for Kiwi businesses with a 9% year-on-year fall in electricity demand from the industrial sector.
Some of this will no doubt be the closure of Winstone Pulp International and the Oji Fibre Solutions’ Penrose plants citing energy cost as a major factor in those decisions, and part is also likely the ramp down of Tiwai at Meridian’s request.
There was much heralding of the benefits to New Zealand of the new Tiwai deal, especially by Meridian:
“This is a fantastic outcome for New Zealand and the Southland region. It’s further proof that large industrial businesses can utilise New Zealand’s renewable energy advantage and create low carbon sustainable products, high value jobs and export dollars for our country.”
But now it would seem that it’s even better for New Zealand when Tiwai doesn’t run. Curious that!
Future Outlook
Another winter of extreme prices in 2025 poses yet another threat to consumer confidence in New Zealand’s electricity market, ultimately threatening the social license that incumbent generators and even distribution businesses have enjoyed for so long.
The reality is that in 2025, for perhaps the first time, grid supply companies may be facing the legitimate threat of substitution as New Zealand’s (and global) grid energy supply becomes more expensive than the delivered cost of rooftop solar for residential consumers.
Recommendations for Businesses
The same trends apply to supply for business consumers, I would go so far as to say that any business in New Zealand facing new supply costs should feel obliged to seek a quote on rooftop solar and battery.
The economics of rooftop solar in terms of delivered cost of energy will continue to improve as regulatory reforms evolve to incentivise consumers to participate in flexibility, and reward investment in distributed energy resources. While escalating grid and distribution costs are now locked in for the next five-year period we should expect to see this continue to increase. From a global perspective, New Zealand is no different to most nations looking to electrify their economies. According to Bloomberg New Energy Finance research, US$21 trillion dollars of grid investment is required to reach net zero emissions targets.
We can expect to see more and more businesses taking their destiny into their own hands as our incumbent grid suppliers seek to maximise returns from legacy assets against the improving economics of generation technologies that can generate energy at the point of consumption.
Since 2018, the New Zealand Electricity market has been defined by falling natural gas supplies, record quantities of coal to be burned at Huntly, inconsistent hydro storage levels and rising costs. All of these factors have led to price instability, and the timing of your next electricity contract negotiation can have a significant impact on the prices offered.
Example: Food and Beverage Industry In this example, our proactive approach to procurement achieved the green pricing before the customer’s contract end date.
In total, eight retailers bid for forward energy supply.
Had they waited until the last minute, the likely number of participant retailers would have been reduced to 3 or 4.
Advance pricing is 32% lower than last-minute pricing.
Example: Hotel Industry In this example, our proactive approach to procurement achieved the green pricing before the customer’s contract end date.
The customer was able to smooth out their energy contract costs over the term of supply.
Advance pricing is 38% lower than last-minute pricing.
Waiting until the last minute to renew your electricity contract could be risky.
Why Act Early?
Allowing your electricity contract to expire or delaying securing a new one can expose your business to unnecessary risks and higher costs. Electricity prices are highly volatile due to factors like hydro storage, so timing your contract negotiation is crucial.
Waiting too long can lead to significantly higher electricity prices. Delaying until the last minute often leaves you with fewer options and less favorable terms. By acting early, you can negotiate better terms and avoid disruptions in service or unexpected cost increases.
Strategic Planning
Start looking at prices six months before your contract ends. This gives you time to find the best deal or reassess the market closer to contract expiry.
Optimal Contract Term
The best term for your electricity contract depends on market conditions and your business goals. Longer-term contracts can offer price stability and potentially lower rates, while shorter-term agreements provide flexibility but often come with higher costs and risks.
Total Utilities procures a range of contract terms and provides recommendations that balance short-term flexibility with long-term price security, ensuring your contracts align with your business strategy and market conditions.
Shop Around
In addition to acting early, it’s essential to compare different offers. The electricity market is competitive, and prices can vary significantly between providers. By comparing offers, you can ensure your current supplier’s renewal offer is competitive.
Proactive Procurement Total Utilities offers services to help you:
Why Total Utilities? With over two decades of experience, Total Utilities conducts around 300 market reviews annually, providing strategic advice tailored to your business needs. They help optimise utility costs and ensure reliable procurement.
In today’s business landscape, whether your priority is energy efficiency, cost reduction, or sustainability, a successful long-term strategy relies on a degree of certainty about the future. When market conditions are volatile, a rigorous approach to data becomes more crucial than ever. Long-term uncertainty makes it challenging to plan and even harder to sell sustainability strategies within the wider business. However, a data-driven approach provides businesses with something tangible to build on.
The Role of Data and Analytics
For those looking to manage energy more effectively, data and analytics often focus on consumption, carbon emissions, and cost. Establishing baselines for all data sets and systematically tracking them as you make operational changes or implement new technologies is essential. This approach ensures you know what’s working, what isn’t, and why.
Addressing Energy Costs in New Zealand
With increasing pressure to control energy costs due to systemic market constraints in New Zealand, businesses must find ways to reduce energy usage. Simply absorbing costs is not a viable option. Understanding where your energy is going is crucial. By identifying operational inefficiencies, you can discover where savings can be made, helping you make smarter decisions.
Leveraging Real-Time Energy Intelligence
Combining self-powered, wireless sensors with real-time energy intelligence software provides the overview you need and allows you to analyse data to develop a data-driven strategy for the future. This approach can help mitigate costly downtime, reduce waste, enhance agility, and boost productivity.
Benefits Across Various Industries
Using end-to-end energy management tools to build energy intelligence offers benefits for various industries, types of operations, and facilities:
Industrial Manufacturers: Avoid equipment downtime by predicting failures, maximise energy savings, detect operational inefficiencies, and optimise overall equipment effectiveness. Typical results include reducing maintenance costs by 60%, equipment downtime by 50%, and equipment capital investment by 3-5% by extending the useful life of machinery.
Multi-Site Retail and Grocery Stores: Cut costs by reducing energy waste, optimise equipment and maintenance, enhance brand reputation through sustainability, and monitor the entire operation from one dashboard. Typical results include eliminating 30% excess energy consumption and a 10% reduction in energy costs, boosting net profit margins by up to 16%.
Commercial Buildings and Business Campuses: Predict failures and operational anomalies through real-time alerts, reduce energy waste, measure retrofit effectiveness, and continuously improve operational effectiveness. Typical results include cutting equipment maintenance costs by 40% and extending equipment lifetimes.
Panoramic Power: Your All-in-One Energy Intelligence Solution
Our expert team can help you unlock significant energy savings with a short-term return on investment (ROI). Typically, we can identify up to 25% savings with an ROI of less than 2 years.
We offer the easiest-to-install, and fastest for ROI energy management solution, that scales effortlessly from a few devices to full-site or multi-site operations. Experience actionable insights and real-time analytics that drive efficiency and sustainability. Our solutions work for everyone, helping your organisation kickstart cultural transformation towards a sustainable future.
If 2024 taught us anything, it’s that unpredictability is the new norm. From gas shortages and hydro lake levels nearing rock bottom to record highs and lows in pricing, the year had it all.
One thing is clear: the current market structure isn’t serving commercial and industrial customers well. Short-term issues have impacted long-term pricing, forcing customers to pay a premium for future energy, even when conditions might improve.
In a previous article, I delved deeper into how coal sets the overall price in a largely renewable energy grid. You can read more about it here.
Looking Ahead to 2025
As we step into 2025, hydro storage levels are at 85% capacity, which is 22% higher than usual for this time of year. Wholesale electricity spot pricing remains low, with thermal generation contributing only about 3-5% to the grid. Current prices are around 4-5c/kWh, a significant drop from last January’s 25c/kWh. However, with limited natural gas availability and coal firming the market, price volatility is more pronounced, especially during dry periods when wind generation drops.
Average Daily Wholesale Spot Pricing
The ASX Energy Futures Market
Forward market pricing remains stubbornly high on the ASX Energy Futures market, which sets the overall forward price for retail contracts for large commercial and industrial customers. The current quarter (Jan-Mar 2025) is priced around 12c/kWh in the North Island and 7.4c/kWh in the South Island.
The ASX Energy Futures market is dominated by the big four generators: Contact, Genesis, Mercury, and Meridian. These generators offer volume into the market for participants, which can include other generators, retailers, major energy users, or investment houses.
Long-Term Pricing Trends
Over the past year, long-term pricing on the ASX has steadily increased as natural gas supplies dwindle. The market seems to be factoring in more risk as coal becomes the dominant fuel for managing limited hydro storage.
North Island pricing for 2026, 2027, and 2028 has risen by 19%, 26%, and 11% respectively since January last year. Similarly, South Island prices have increased by 28%, 35%, and 14%. Notably, pricing for 2028 only became available on the market from October 1st last year. The forward price curve has also shifted from a staggered reducing price to an almost flat price within any given year.
North Island Pricing ASX Energy Futures
The Future of Firming Fuels
This trend suggests that coal will remain the firming fuel of choice for the foreseeable future, despite calls for liquid natural gas imports as a lower carbon emission option. The industry appears divided on future firming solutions, adding to the uncertainty.
As we navigate through 2025, staying informed and adaptable will be key to managing the ever-changing energy landscape.
Navigating the Future of Renewable Energy and Market Volatility
The announcement of new renewable generation projects is exciting, but it comes with its own set of challenges. Much of the new capacity is in solar and wind, both of which are intermittent and cannot be relied upon for firming. While battery storage is becoming more economically viable, it hasn’t reached the point where it can fully replace traditional firming methods. New hydro or geothermal developments, which could provide the necessary baseload generation to support intermittent sources, are facing lower priority due to high costs and resource consent issues.
What to Expect in the Coming Year
As we look ahead, the energy market is expected to remain volatile. Both Transpower and the Gas Industry Company have warned that natural gas production may fall below demand during the upcoming winter. This shortfall will likely keep energy prices unstable. Additionally, the commissioning of new generation projects is progressing slowly, meaning the reliance on fossil fuels for firming will continue in the short term.
Preparing for Contract Expiry in 2025
If your electricity contract is set to expire in 2025, it’s crucial to start planning early. Seeking market pricing well in advance of your contract’s expiry date allows you to set realistic budgets and mitigate the impact of short-term volatility.
Consider exploring solar options, whether on-site or off-site. Both approaches enable you to purchase solar energy as a commodity, reducing your exposure to price fluctuations in the broader energy market.
How Total Utilities Can Help
Total Utilities is here to assist you in navigating these complexities. We offer advisory services to help you evaluate your options and make informed decisions about your energy contracts and renewable energy investments. For more detailed advice, you can read our article on managing utility contract expirations here.
By staying proactive and informed, you can better manage the uncertainties of the energy market and make strategic decisions for your business’s future.
In the past three to five years, legislative changes have prompted many New Zealand businesses to evaluate their contributions towards the country’s net carbon zero targets. Despite their commitment to sustainability and reducing CO2 emissions, many companies find themselves stuck at the implementation stage due to a lack of necessary data.
The Importance of Data in Sustainability
The journey towards sustainability is fundamentally dependent on data. Data is crucial, from setting decarbonisation goals to determining the actions needed to achieve those goals and monitoring progress. Most sustainability projects involve significant investments in onsite energy generation, transitioning to renewable energy sources, diversifying the energy mix, or investing in more efficient machinery.
Granular data collected at the machine, process, and facility levels empowers decision-makers to justify their investments and confidently implement sustainability initiatives.
Establishing Baselines and Monitoring Progress
Once an investment decision is made, organisations need to establish baselines and monitor progress. Highly accurate IoT devices can measure energy use and emissions across critical machinery, creating a baseline for tracking progress and identifying areas for improvement. Monitoring energy consumption, operational efficiency, and emission levels allows organisations to set realistic, data-backed sustainability targets, monitor initiatives over time, and collect the data needed to meet reporting obligations.
Case Study: The Power of Data in Action
A national retail chain, a client of Total Utilities, demonstrates the power of data in action. The Panoramic Power Energy Intelligence solution helped identify out-of-hours energy waste equivalent to 51,000kg of Scope 2 CO2 emissions. By using Panoramic Power sensors to measure the energy consumption of their HVAC system, they identified an opportunity to optimise these assets during non-operational hours, achieving $105,000 per year in total energy cost savings.
Criteria for Effective Data Utilisation
For data to successfully drive sustainability initiatives forward, it must meet the following criteria:
Generate Insights: Organisations striving for net zero need more than just raw data; they need actionable insights. A robust data tool is required to generate these insights, allowing key stakeholders to visualise the full energy picture, identify sources of waste, and determine where interventions will have the most significant economic and environmental impact.
Be Readily Shareable: Companies worldwide often suffer from data silos, where relevant data does not reach those who need it for daily operations. A data tool that facilitates easy sharing across departments and stakeholders empowers both site and management levels to carry out their tasks efficiently and accurately.
Ease Reporting Obligations: Organisations face increasing pressure to collect and maintain accurate emissions and resource consumption data and report on decarbonisation efforts. A data-driven energy monitoring strategy provides a clear view of energy and carbon performance and generates detailed reports required for regulatory and legislative compliance with Scope 1, 2, and 3 emissions.
Harness Energy Intelligence and Boost Your Sustainability Initiatives
When organisations have confidence in their data, they can better manage their energy use. Data will be the cornerstone of successful sustainability journeys going forward. By collecting, analysing, and acting on data-driven insights, manufacturing organisations can bridge the gap between commitments and implementation, achieve net-zero goals, and build a more sustainable future.
How Total Utilities Can Help
Our expert team can help you unlock significant energy savings with a short-term return on investment (ROI). Typically, we can identify up to 25% savings with an ROI of less than 2 years.
We offer the easiest-to-install, and fastest for ROI energy management solution, that scales effortlessly from a few devices to full-site or multi-site operations. Experience actionable insights and real-time analytics that drive efficiency and sustainability. Our solutions work for everyone, helping your organisation kickstart cultural transformation towards a sustainable future.
