Electricity industry structure

Electricity generation

New Zealand electricity is mostly generated from hydro, gas, coal and geothermal power stations. Recently there has been an increase in the development of wind generation, as New Zealand looks to use more sustainable resources in electricity generation.

Power stations generate electricity which is then transmitted through high voltage transmission lines. These lines make up a network which is known as the national grid.

Electricity transmission

The system which transfers electricity from power stations to distribution companies, via the transmission system, is known as the national grid. Voltages are typically 110 to 220 kV and it includes the DC link between the North Island and the South Island. This system is owned and operated by Transpower, which is a state-owned enterprise.

The high-voltage electricity, which travels through the national grid, is converted to lower voltage at substations that are located throughout New Zealand for local distribution.

[image] Electrical industry structure — Illustration on the Electricity Industry structure, starting at generation, to transmission, industrial companies, substations, distribution, retail, and lastly domestic users (houses). Image courtesy of Transpower

Electricity distribution

The electricity distribution networks are owned and operated by a number of companies that provide network connection and services between the national grid and customer premises.

These networks include sub-transmission lines and cables that operate at voltages such as 33 kV, 50 kV and 66 kV.

They also include distribution line voltages that vary between 11 kV and 22 kV which are then converted for most consumers to receive voltages between 230 to 400 volts.

Electricity retailers

An electricity retailer is a company which buys electricity at wholesale prices from a power generation company and then sells this electricity to consumers, such as individual households and businesses.

The retailers contract the transmission and distribution companies to carry electricity to the consumer. The amount a retailer charges to the end user includes the cost of the electricity supplied to the consumer, as well as charges for transmission and line charges. Consumers are able to choose which retailer they wish to buy their electricity from.

The Consumers' Institute of New Zealand operate PowerSwitch which can assist consumers in making this decision.

A list of Electricity Retailers can be found on the PowerSwitch website(external link)

Visit the Electricity Authority website for information on buying and selling electricity(external link)