The growing role of geothermal in New Zealand’s electricity mix

Geothermal generation provides steady baseload supply

By using natural heat from the earth, geothermal generation provides a steady supply of electricity to New Zealand’s electricity system that isn’t dependent on variable weather conditions. Alongside geothermal’s low fuel cost, this makes geothermal generation an important source of firm baseload electricity for New Zealand's power system.

Since the output of geothermal plants is steady, each megawatt of geothermal capacity generates more electricity over time than other forms of generation. The two new projects add a combined 96MW of capacity and their constant is are contributing to higher monthly generation.

Monthly proportions of geothermal generation have increased

New geothermal capacity has increased geothermal's share of monthly electricity generation. In January and February 2026, geothermal made up 25.6% and 26.3% of total generation respectively (Figure 2). By comparison, geothermal made up 24.3% and 23.1% in the same months in 2025.

These recent geothermal proportions represent a notable increase from November 2025, when geothermal fell to 17% of monthly generation. This is due to a higher number of planned plant outages, which typically occur at this time each year, as electricity demand eases following winter.

Geothermal generation is set to continue to grow

Another 101MW of geothermal generation from Contact Energy’s Te Mihi Stage 2 near Taupō is set to commission in September 2027. This is enough electricity to power 120,000 homes. New geothermal and other generation being built in New Zealand can be tracked through the Electricity Authority’s Generation Investment Pipeline dashboard.

The Government has also announced $50m from the Regional Infrastructure Fund to “help de-risk and ensure geothermal projects are well positioned to lift productivity and strengthen regional resilience”, further supporting the continued expansion of geothermal generation.