Energy Report Rigged To Excuse Fossil Fuels

23 September, 2025

Climate organisation 350 Aotearoa says the imminent Frontier Economics electricity market report has been fatally undermined by government terms of reference that deliberately exclude climate change and renewable energy.

The controversial terms of reference make no mention of climate or the government's stated goal to double New Zealand's renewable electricity generation, instead referring vaguely to 'current and future demand'.

"It's incomprehensible that in 2025, terms of reference for a key energy report don't mention climate change or renewable energy," says 350 Aotearoa co-director Alva Feldmeier. "This report has been rigged to see no climate, hear no climate, speak no climate. The government is crafting this as a political maneuver to justify fossil fuel subsidies like underwriting gas or coal."

The exclusion contradicts Energy Minister Simon Watts, who highlighted doubling renewables in his own press release about the report, while Minister Shane Jones bizarrely claims "New Zealand is probably the only country transitioning from renewables to coal."

"It's disingenuous for Minister Watts to claim we need to double renewables while simultaneously omitting that from the terms of reference," says Feldmeier. "This confused signalling undermines confidence in our energy system, and consumers and climate pay the price."

Edward Miller, Researcher at the Centre for International Corporate Tax Accountability and Research (CICTAR), says: "Almost a decade of underinvestment in new renewable generation has helped safeguard the role of fossil fuels as the backup security valve in our electricity sector. When needed, these expensive dirty units set the price for cheap renewables, delivering windfall returns and discouraging decarbonisation. This is why in 2022 we argued that thermal fuel generation should be transferred to a state-owned and operated special purpose vehicle with a legislative purpose of sustaining energy security at lowest cost, with an upper price limit on thermal generation."

"Unfortunately, successive governments have approached the electricity sector as a source of revenue rather than as an engine for economic development and decent livelihoods, an approach that is reflected in the terms of reference for the current review," said Miller.

Feldmeier warns the climate exclusion proves findings are predetermined: "If it's acceptable to direct the report to consider detailed pricing goals, it's perfectly appropriate to ask it to consider climate change. There was no justification for excluding the key witness before the trial started."

"While expensive fossil fuels drive up power prices, the government says 'nothing to see here'. For too long has the government coasted on our hydro legacy, while other countries work hard to break free from fossil fuels. It’s time for New Zealand to dial up our efforts to address systemic energy failures, instead of sabotaging reports such as these. Not including renewables forces the report to be written as if the 21st century never happened. This isn't delivering for consumers — it's a smokescreen for fossil fuel subsidies."

New Zealand has been without a comprehensive energy strategy since 2021. As part of its energy campaign, 350 Aotearoa is calling for a new 30-year energy strategy that prioritises people and planet over fossil fuel companies.

Notes:

More details about the report - which is expected to be released before the end of September- can be read here: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-consultations-and-reviews/review-of-electricity-market-performance

The terms of reference can be found here: https://www.mbie.govt.nz/assets/terms-of-reference-for-review-of-electricity-market-performance.pdf

The report’s terms of reference included:

‘Draw on international electricity market experience, while considering distinctive aspects of the New Zealand system, including the absence of generation or retail subsidies and the operational independence of the sector, and identify relevant lessons for New Zealand.’

The government and the gentailers are both in denial that our system is in crisis, and needs systemic overhaul. Energy Companies such as Contact say the market is not broken. One of the Government’s previous energy panel appointees, Professor Peter Crampton, says ‘the markets have largely succeeded in the goal of providing reliable electricity at least cost to consumers.” Even the Government’s own cabinet paper signals ‘we do not wish to signal that the market is fundamentally broken’.

About 350 Aotearoa:

350 Aotearoa is the New Zealand arm of international climate movement 350.org. We coordinate local campaigns providing education, tools and support for community leadership. Our energy campaign challenges fossil fuel dependence and advocates for an equitable zero-carbon economy, including our call for a comprehensive 350-year energy strategy that puts people and planet first.
 

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