By Sean Doherty,Manufacturing Commentator | NZ Industry Trends

 

New Zealand’s electricity market is producing two parallel realities. For the country’s four major generator-retailers, business has never been better.

For manufacturers, the same market is steadily destroying the economics of making things in this country.

If the balance is not corrected soon, the closures already under way will accelerate – and some of the damage will be permanent.

Generators cash in while industry burns out

In the six months to December 2025, New Zealand’s four major gentailers – are forecast to deliver a combined operating profit of approximately $1.86 billion, an increase of around 45% on the same period a year earlier.

These are not one-off results. In 2023, the same four companies posted combined operating profits of $2.7 billion – roughly $7.4 million in profit every single day.

The Electricity Authority’s own energy margin dashboard shows big generators regularly earning weekly gross margins in excess of $70 million, peaking at around $119 million in some high-price weeks.

Consumer NZ chief executive Jon Duffy has put the problem plainly: “We hear the same lines every year. Big profits are needed to fund investment. But the investment is always coming, never here in sufficient quantity“.

The numbers back him up. Analysis by the NZCTU and 350 Aotearoa found that over the past decade, the four gentailers paid $10.8 billion in dividends to the government and shareholders while investing only $4.5 billion into plant, property and equipment.

Transpower data showed that as of late 2025, only around 986 MW of new generation had been committed and financed – far short of the 1,500 GWh of new capacity needed every year until 2031.

The system, in other words, is structured to reward generators most when supply is tight and prices are high – and the incentive to over-build capacity that would push prices down is weak.

No more free photos: Make cheap, reliable power the price of political access

The damage is already real. A string of manufacturers have shut their doors citing high power prices, and a 2025 MBIE‑commissioned study by Sense Partners found that elevated electricity and gas prices from 2017–2025 left the economy about $5.2b in lost GDP — resulting in lower wages, exports and investment.

For manufacturing, that means shelved capex, crushed margins and a slow shift of production offshore.

This election year, MPs will want photos in your factories. Make power prices the only conversation that matters. Tell them: without structurally lower, predictable electricity costs, there will be fewer jobs, weaker productivity growth and fewer factories left to visit next time.

If they want access to your factory and your people, they must be prepared to back real electricity market reform and a new mandate for state‑owned generators that puts NZ manufacturing competitiveness ahead of profit.

That can only happen if the government uses its 51% shareholding in three of the biggest generators to instruct their boards to explicitly prioritise long‑run price competitiveness and capacity build‑out, rather than maximising dividends.