Four major New Zealand electricity generators—Genesis Energy, Mercury, Meridian, and Contact—have signed 10-year agreements to establish a strategic energy reserve. The initiative centres on Huntly Power Station and aims to secure electricity supply while stabilising prices in the region. The agreements are subject to approval by the Commerce Commission. Genesis Energy is a diversified energy company generating electricity and supplying natural gas and LPG. Mercury is an electricity generation and retail company operating in New Zealand.
The deals will keep one of Huntly’s Rankine units, previously scheduled for decommissioning in 2026, operational through to 2035. Each generator will purchase 50MW of Huntly Firming Options (HFOs). This provides them with access to backup generation capacity, crucial during periods when hydro or wind output is low, ensuring a more reliable power supply for consumers and businesses alike.
As part of the arrangement, Genesis will construct a 600,000-tonne solid fuel reserve. Initially, this reserve will consist of coal, but the company anticipates transitioning to biomass in the future. This move aligns with broader sustainability goals while ensuring a consistent fuel source for the power station.
Genesis chief executive Malcolm Johns emphasised that these agreements were critical to justify investment in extending the unit’s operational life and maintaining a national fuel reserve. According to Johns, HFOs have already demonstrated their value by helping to avoid price spikes in 2025, allowing hydro reserves to be preserved. The new contracts are expected to take effect from 1 January 2026.
