Source: New Zealand Government
Introduction
It is my pleasure to welcome you, in my capacity as Minister for Resources and Regional Development, to the launch of From the Ground Up: a draft strategy to unlock New Zealand’s geothermal potential.
Our geothermal resources present significant opportunities for each of your portfolios, and I have valued your contributions and commitment to this work.
Thank you to our generous hosts, the New Zealand Geothermal Assossiation. I commend you on this year’s Geothermal Week event and the theme of global opportunity is fitting given what I want to discuss today.
Also with us today are the Mayors of Rotorua and Taupō, Tania Tapsell and David Trewavas, as well as experts and leaders representing a spectrum of interests. Welcome and thank you for being here.
A legacy at the forefront of harnessing geothermal resources
Our unique geographical position perched on an active boundary between the Indo-Australian and Pacific tectonic plates has bestowed us with a world-class geothermal resource – and we boast a long history of utilising it as an abundant heat and energy source.
Our tīpuna who settled in the central North Island used geothermal waters for heating, cooking and healing.
A taonga for Māori, waiwhatu (geothermal) also carries significance as the meeting place between the physical and spiritual worlds.
The Pink and White Terraces were New Zealand’s largest attraction before the Mount Tarawera eruption, enticing many to make the long journey to bathe in the waters. Spa baths were established in the Rotorua area from about 1870 fed by natural springs and shallow wells and playing a major role in healing injured soldiers returning from war.
The international effort to generate electricity from geothermal steam began well over a hundred years ago with the earliest experiments carried out at Larderello in Italy, where the world’s first geothermal power station was opened in 1913.
New Zealand army engineers serving in Italy during WW2 were sent to inspect the station but when they arrived in June 1944 it had been destroyed by retreating German forces. When they visited again in 1948, the power station had been rebuilt and was producing over 140 megawatts of electricity.
Back home, we were grappling with the second dry year in a row and hydro-electric dams weren’t able to meet energy demand. It was quickly becoming apparent that we needed another source of power, independent of imported oil.
In 1949 exploratory drilling began at Wairākei, just north of where I am speaking to you today. Explorations were fruitful, and the power station was built between 1958 and 1963. It was only the second in the world, and the first to attempt to harness wet steam.
Further geothermal capacity was added in the 1980s with power stations constructed at Ōhākī and Kawerau, and by the early 2000s, New Zealand had seven geothermal power stations – six in the Taupō Volcanic Zone, and one at Ngāwhā in Northland. Geothermal provided about 7 per cent of our total electricity.
Our engineers invented a steam–water separator and had to pioneer ways of overcoming numerous challenges, and it was because of their hard work that New Zealand expertise became highly sought-after by countries interested in developing their own resources.
This is a legacy that every Kiwi can be proud of.
A vital and valued sector – but potential left on the table
Today, geothermal accounts for just under 20 per cent of our electricity generation. We are the fifth largest generator of geothermal in the world. Unlike hydro, wind or solar power, it isn’t reliant on the weather, and provides a clean, consistent and resilient power source.
Beyond electricity generation, direct geothermal energy is an enabler of industrial, commercial and agricultural activity. Currently there is over seven petajoules in direct geothermal heat use in pulp and papermaking, wood processing, dairy manufacturing and greenhouses each year.
Notably, as a key contributor to the Māori economy, geothermal resources support the economic aspirations of iwi, hapu and ahu whenua trusts providing opportunities for innovation and powering diverse investment portfolios.
Geothermal aquaculture is one such investment and demonstrates the versatile applications of the resource.
The Huka Prawn Park, now owned by Te Kiri o Moehau Partnership, is the only geothermally heated prawn farm in the world, warmed by discharged water from the Wairakei power station.
Ngāti Tuwharetoa Geothermal Assets is the the largest direct heat supplier in the world for geothermal steam.
The Tūaropaki Trust with their Mokai Geothermal Power Station and other direct heat use ventures, including a hydrogen production pilot plant using geothermal energy; dairy processing facility utilising geothermal heat; and covered crop operation using the Mokai geothermal resource.
Our geothermal resources have bolstered our national science and innovation capabilities. We are renowned globally for our deep knowledge in geothermal energy, technology, exploration and modelling. In turn, this has strengthened our international relationships and trade as we support other nations to develop their resources.
Finally, we can’t forget the value of geothermal in attracting visitors to our shores. 27 per cent of international tourists visited a geothermal attraction in 2024. Rotorua stands out as a shining example – its tourism industry has been built on the back of this natural resource, creating jobs, attracting visitors, and showcasing Māori culture.
There is no doubt that geothermal is an integral part of New Zealand’s energy landscape and identity – but I will put to you that some of the most exciting chapters of our geothermal story are still ahead.
With a solid foundation in place, we’ve proven what’s possible.
This Government has not shied away from the fact that New Zealand has an energy shortage, and our security and resilience is at risk because of it. Our electricity demand is expected to rise by 68 per cent over the next 25 years. Significant growth in renewable generation such as solar, wind and hydro will do the heavy lifting but these sources will always be constrained by the weather.
Our industries are suffering and shuttering, especially in the face on constrained natural gas supply and our transition to a low emission future. We need proven, scaleable solutions to meet our energy needs to prevent further erosion.
We are laser focused on resurrecting our economy. Economic growth is key to raising living standards, creating higher-paying jobs, and delivering the vital infrastructure and public services New Zealanders want and deserve.
As I’ve already discussed, our geothermal resources are synonymous with regional development, tourism and Māori development – all drivers for economic growth. The strategic growth of this resource across different applications will have crosscutting benefits.
So, what’s holding us back from geothermal being the answer to all our problems?
Let’s start with our lack of exploration data. Beyond the Crown’s exploration campaign between the 1950s and 1980s, there is very little centralised data for a potential entrant to get started with. Much of our existing field knowledge is fragmented and sits in isolation, making it hard for smaller players and tāngata whenua to assess viability. It also means we are limited in our ability to map and progress bigger picture development within wider geothermal systems. This hampers our potential.
A lack of investment is another limitation. An exploration well can set you back $10 million to $15 million. Installed geothermal generation is some of the cheapest power in New Zealand – but getting there is not. These investments are costly and can take time. Ensuring landowners have access to up-to-date information to guide investment decision-making, and Māori and entrant investors have access to the right capabilities is vital.
How we regulate geothermal development is clunky and out of date with how a modern geothermal sector operates. We have work to do to ensure we have a fit-for-purpose regime for the future. In saying this, I want to reassure my whanaunga from up the road, this does not mean allowing power stations near Pōhutu and other protected fields – I am committed to conserving these taonga for generations to come.
When we talk about what is holding us back, above all else, I say that we have lacked ambition and a holistic, cohesive plan for how we utilise our geothermal resources in our energy mix and beyond. And that ends today.
A cohesive strategy with no shortage of ambition
This Government refuses to let our geothermal potential languish.
Today I am launching a draft strategy that provides the vision to position New Zealand as global leader in sustainable geothermal development, delivering innovation, resilience and inclusive growth for future generations.
Through this strategy, we are:
Extending New Zealand’s position as a world leader in geothermal innovation.
Accelerating energy resilience through increased electricity generation and harnessing geothermal heat to support New Zealand’s energy transition. We will double geothermal energy use by 2040, and
Strengthening regional economies by advancing geothermal development in collaboration with tāngata whenua, and unlock industrial growth, tourism and trade to support New Zealand’s goal of doubling exports.
We are proposing a significant work programme to deliver on these goals. Actions in the year ahead include establishing a baseline of publicly available data, exploring options to deliver a geothermal centre of excellence to encourage collaboration and research, and ensuring new planning and environmental legislation enables sustainable use of our geothermal resources.
A new horizon – exploring supercritical
I also want to touch on what will be a new horizon for our geothermal sector – supercritical.
The energy generated from supercritical geothermal technology could be up to three times greater than current geothermal energy and our investment in exploring this new horizon could help secure New Zealand’s future energy needs.
The Government has ring-fenced $60 million from the Regional Infrastructure Fund to find out how we can extract this super energy from the earth.
Some $5 million of that funding has been drawn down for work on the detailed design and cost to drill the first of three exploratory deep wells in the Taupō Volcanic Zone.
This is a great place to drill for supercritical energy because large sources of geothermal heat exist at shallow depths and Earth’s crust is much thinner.
The Ministry of Business, Innovation & Employment and Earth Sciences New Zealand, formally GNS Science, are working closely with two major geothermal electricity generation providers, Mercury and Contact, as well as continuing to tap into the latest international research and collaboration opportunities.
We are in discussions with local iwi and hapū about partnering on the first well site and have made good progress on locking down a location. I look forward to sharing more on this soon.
Once a site is confirmed, work will ramp up on the technical design of the well and while there is a significant amount of detailed work to progress, I expect we will start drilling for supercritical energy in 2026.
Our next steps
Consultation on the draft strategy is now open.
Those that are here today representing the sector, iwi and enabling disciplines are well placed to provide insights and ensure the final strategy unlocks a better future.
A plan of this scale can only be progressed in partnership. I am looking at you as our partners to help us get this right.
Visit MBIE’s website or get a copy of the draft strategy when you leave here today, for details on how to have your say.
Conclusion
The opportunities in front of us are limitless and with advancing science, we can lead the world once again in sustainable geothermal development, and on the potential of supercritical geothermal.
