The NZ government has set out a new roadmap to expand geothermal generation, with a target to double output by 2040.
Resources Minister Shane Jones introduced the draft strategy, From the Ground Up, in Taupō in July. The plan outlines the role of geothermal energy in meeting future electricity demand and supporting regional economies. Submissions are open until 12 September.
Geothermal Sector Built on Early Global Leadership
“New Zealand was at the forefront of global utilisation of geothermal energy for electricity generation, and today the sector is a vital contributor to our economy as part of our energy sector, tourism and beyond,” said Jones.
Five-Point Strategy with Regional Infrastructure Funding
The draft strategy has a five-goal action plan designed to modernise infrastructure, support innovation, and streamline regulation. The plan seeks to:
- Improve access to geothermal data and insights
- Ensure regulatory and system settings are fit for purpose
- Advance knowledge and uptake of geothermal technologies
- Enable place-based geothermal clusters
- Drive research and innovation, including in supercritical geothermal technology
According to the strategy, this framework will create “a focused pathway to geothermal leadership” and better harness the country’s rich geothermal resources.
The government has committed $60 million through the Regional Infrastructure Fund, with $5 million earmarked for designing the first deep exploratory well in the Taupō Volcanic Zone.
Supercritical Geothermal Resources Offer Step Change in Energy Output
One of the most transformative aspects of the draft strategy is its emphasis on developing “supercritical” geothermal resources—high-temperature fluids found at depths beyond five kilometres and above 400°C.
“Supercritical geothermal technology… could offer up to three times more energy than current geothermal energy,” the strategy paper notes.
This next-generation geothermal development is concentrated in geologically active areas like the Taupō Volcanic Zone.
Geothermal Energy: Strong Historic Base and National Advantage
New Zealand currently operates 17 geothermal power stations across eight fields, providing a total capacity of 1,207 MW. The Wairakei plant, near Taupō, opened in 1958 and was the world’s second geothermal power station. Geothermal power generated 8,741 GWh—accounting for 19.9% of national electricity production in 2024.
“Our unique geographic position on the boundary of both the Australian and Pacific tectonic plates, coupled with the Earth’s thin crust along that rift, gives us a significant geological advantage in expanding the use of this abundant natural resource,” said Jones.
Commercial and Industrial Opportunities for Geothermal Energy
Wider commercial and industrial use of geothermal energy features in the draft plan. Jones identified new areas for growth, including mineral recovery and applied geothermal science.
“I see potential for our geothermal sector to expand and diversify into areas such as the extraction of minerals from geothermal fluid, the development of globally sought-after innovation and science, and more use of direct geothermal energy to power industrial, commercial and agricultural applications,” he said.
Removing Barriers to Growth Through Targeted Policy Reform
According to the strategy, sector growth is constrained by cost barriers, patchy data, and regulatory hurdles. The policy direction leans toward reform and streamlined public investment.
“We must ensure that regulatory and system settings are fit for purpose,” the strategy asserts—pointing to the need for a more agile, pro-development framework.
Consultation has begun regarding the recent government strategy to expand New Zealand’s geothermal sector until September.