Return of domestic coal for back-up generation

Reintroducing domestically sourced coal as a back-up fuel for electricity generation during shortages is a pragmatic move that will bolster New Zealand's energy resilience and the Waikato regional economy, Resources Minister Shane Jones says.

Genesis Energy has entered into a two-year agreement with BT Mining to supply 240,000 tonnes of locally sourced coal to the Huntly Power Station, diversifying its fuel supply and reducing reliance on imported coal.

"Gas-powered generation at Huntly has long been how we bridge the gap when renewable sources can't meet demand but, as gas supply tightens, coal generation is now taking a bigger role in ensuring we can keep the lights on," Mr Jones says.

"Over the past decade, Genesis Energy has used between 230,000 and 1,200,000 tonnes of coal per year to generate electricity when we need it most. This fluctuating annual demand has led to a reliance on imported coal, leaving us exposed to international market volatility.

"This new agreement to source coal locally will help safeguard New Zealand against global disruptions, strengthen our fuel supply chain and provide greater certainty for our electricity system."

Mr Jones also highlighted the significant regional economic benefits of the deal, particularly for the Waikato.

"This is the resource renaissance. Coal has been a cornerstone of the region's economy since commercial mining began at the Huntly coalfield in 1860. Mining this important resource supports skilled, well-paying local jobs and injects economic activity into local communities, reinforcing the vital role of regional New Zealand in securing our energy needs," Mr Jones says.