Insufficient increase in installed generation, particularly a stagnation in seasonal firming capacity, has created a risk of breaching electricity security standards if new generation is delayed.
For most businesses that translates into two practical questions: what happens to price, and what happens if supply is genuinely constrained.
The price question
Wholesale volatility is already visible. The average spot price reached $105 per MWh in May 2026, up around $49, on higher demand combined with lower wind and roughly 100 megawatts of geothermal offline. Between 2019 and early 2026 the average rose to around $160 per MWh.
Most business users buy on contract and feel this at renewal rather than daily. That makes it a budgeting problem — know when your contract expires, start the conversation early, and model a higher rate rather than assuming a rollover at current pricing.
The supply question
New Zealand has not had widespread involuntary disconnection of commercial users in recent memory, and the system operates with security standards precisely to avoid it. But a tight winter combined with low hydro storage and delayed generation is the scenario the warnings describe.
The tools in a genuinely tight period are demand management arrangements and public conservation campaigns before anything involuntary. Businesses with flexible load are better positioned than those without.
What continuity planning actually needs to cover
Most business continuity plans treat power as either present or absent. The more useful framing distinguishes:
- Short outage — minutes to hours, from a local network fault. Common, and the most likely event by far.
- Extended outage — days, from a severe weather event damaging network infrastructure.
- System-wide constraint — rare, managed through demand reduction rather than disconnection.
- Price event — supply continues, cost rises sharply. The most likely to affect your P&L.
Each needs a different response, and most plans only address the first.
Practical continuity measures
Know what stops. Walk through your operation and identify what fails immediately — refrigeration, point of sale, security systems, doors, lighting, ventilation, IT. Some of those have safety implications rather than just commercial ones.
Uninterruptible power for critical systems. Not the whole site — the systems where an unclean shutdown causes damage or data loss.
Refrigeration is the common exposure. For food businesses, an extended outage is a stock write-off and a food safety question. Know your temperature holding time and have a decision rule for when product must be discarded.
Payments. If your point of sale is down, can you trade at all? Note that in-store surcharging on most card and EFTPOS payments is now prohibited, so any manual fallback needs to comply.
Communications. How do you reach staff and customers if your systems are down, and is the contact list stored somewhere that survives the outage?
Insurance. Business interruption cover generally requires physical damage to your own property. A network outage elsewhere, or a supply constraint, will not trigger it unless specific extensions are in place. Check rather than assume.
Generators, honestly
Standby generation suits operations where downtime cost is high — food storage, health services, some manufacturing. It carries obligations most buyers underestimate:
- Fuel storage engages hazardous substances requirements above thresholds, including location certificates and secondary containment.
- Regular testing under load, since a generator that has not run is an assumption rather than a control.
- Air discharge conditions in some regional plans.
- Electrical work for changeover, which must be done by an authorised person.
Flexibility is worth having anyway
Load that can move in time reduces your cost through demand charges, positions you for arrangements that pay for flexibility, and gives you options in a constrained period.
Refrigeration with thermal mass, batch processes, water heating and EV charging are all candidates. Understanding your half-hourly load profile is the starting point, and your retailer or lines company can usually provide it.
The Electricity Authority publishes market data including demand and hydro storage at emi.ea.govt.nz under a default open licence. Transpower publishes system operator information, and your lines company publishes outage information and network pricing.
Figures: Electricity Authority market reporting, May 2026 and longer-run averages to early 2026. General information only.
