NZ Secures Energy Future with Local Coal Supply Deal for Huntly Power Station

New Zealand’s energy resilience is set to receive a boost as the Government backs a return to domestically sourced coal for electricity generation. Resources Minister Shane Jones has welcomed Genesis Energy’s new agreement with BT Mining, which will see 240,000 tonnes of local coal supplied to the Huntly Power Station over the next two years.

Reducing Reliance on Imports

For more than a decade, Huntly has relied on a mix of coal and gas to cover shortfalls when renewable generation, such as hydro and wind, could not meet national demand. While gas has historically played the central bridging role, tightening gas supply has shifted the burden increasingly onto coal.

In the past 10 years, Genesis Energy’s coal use has varied widely—from 230,000 tonnes to over 1.2 million tonnes annually—a fluctuation that left New Zealand dependent on imported coal. This exposed the country to volatile global markets, shipping costs, and supply chain risks.

Minister Jones described the local supply deal as a strategic safeguard: “By sourcing coal domestically, we are insulating New Zealand against international disruptions, strengthening our energy security, and ensuring our electricity system has greater reliability,” he said.

Strengthening Energy Security

The agreement provides Huntly with a stable and predictable domestic supply, ensuring the station remains capable of stepping in when renewable output is low. It also supports New Zealand’s broader energy security strategy by maintaining a diverse fuel mix—critical during droughts, cold snaps, or infrastructure outages.

Jones emphasised that this is not about prioritising coal over renewables but about recognising the pragmatic role of back-up fuels: “Gas-powered generation has been the backbone of supply during shortages, but as those reserves decline, coal is again filling the gap. Having a local source is simply common sense.”

Regional Economic Benefits

Beyond national energy resilience, the agreement delivers significant regional economic gains for the Waikato. Coal mining has been integral to the Waikato economy since the 1860s, particularly around Huntly.

“This is the resource renaissance,” Jones said. “Coal has been the lifeblood of the region’s economy for more than 150 years. Revitalising mining supports skilled, well-paying jobs, sustains local businesses, and injects fresh activity into communities that have long powered the nation’s energy needs.”

The BT Mining supply contract is expected to create and preserve dozens of direct and indirect jobs in extraction, transport, and associated industries, further reinforcing the value of regional contributions to national energy security.

Balancing Climate Goals with Practical Needs

The Government has signalled that while the long-term goal remains a low-emissions future, maintaining pragmatic transitional measures is essential. Renewable generation currently accounts for around 85 percent of New Zealand’s electricity, but during peak demand or poor weather, back-up supply remains crucial.

Jones stressed that the Huntly agreement is not a reversal of climate ambitions but a necessary safeguard to avoid blackouts and market instability. “We cannot afford to jeopardise our economy or our communities by being overly idealistic. Energy security must come first,” he said.

Looking Ahead

The deal underscores the Government’s push for energy resilience, regional development, and supply chain stability. By tapping into local coal resources, New Zealand reduces its dependence on uncertain global markets while giving the Waikato economy a timely boost.

As renewable infrastructure continues to expand, domestically mined coal will serve as a practical, short-term bridge—a move that secures power for households and industries while safeguarding New Zealand against international shocks.