Energy

The average New Zealand household uses just under 10,000 kWh of energy per year. Approximately 5,800–8,500 kWh of that is electricity (depending on location), with an average household using around 7,100 kWh. Over 7% of New Zealand’s energy-related greenhouse gas emissions come from households.

All energy consumption has environmental impacts, ranging from the production of greenhouse gases in burning fossil fuels to direct effects on landscapes from dams and other sources of generation.

Most of the total energy consumed in New Zealand still comes from non-renewable sources (fossil fuels), but the story is different for electricity – in recent years, over 80% of our electricity has been produced from renewable sources, the figure standing at 85.5% in 2024. The single biggest source of electricity generation by far is hydro, with geothermal generation now in second position, overtaking natural gas.

There are still many opportunities for making our energy use even more sustainable, however.

Sustainable energy use means designing homes to conserve energy, obtaining energy from sources that do the least possible long-term environmental harm and, where energy is used, to use it efficiently. (Find out more about embodied energy.) Energy efficiency will also reduce long-term energy bills for home occupiers.

Energy-efficient design may incorporate small-scale on-site energy production to meet demand.

In its 2018 Statement of Intent, EECA estimated that more than $470 million could be saved each year by improving the quality and energy efficiency of New Zealand’s housing stock. “While the residential sector only accounts for 6% of New Zealand’s total energy-related emissions…households have a significant impact on our peak electricity use when electricity tends to be at its least renewable and most expensive to produce (for example, winter evenings).”

In July 2019, ECCA published the findings of new research: “Widespread investment in electricity efficiency measures such as LED lighting, heat pumps and electric motors could deliver thousands more GWh of extra renewable electricity capacity at a lower price than investment in new renewable generation alone.”

Engineering New Zealand, in its report Engineering a Better New Zealand: Cleaner Energy, suggests that sometime in the future a smart grid could help provide a solution. A smart grid would automatically turn on smart appliances when supply is plentiful, “…rather than all the dishwashers in New Zealand running every evening.”

“Virtual power plants could help by aggregating small-scale generation … including domestic electric vehicles or solar panels and feeding it back into the grid. For example, to cover a sudden generation need, a virtual power plant could tell your fridge freezer to take a brief break and your electric vehicle battery to join with thousands of others in feeding energy back into the grid.

Virtual power plants overcome the fact that our distribution network was designed to supply power from the transmission network to homes, not the other way around.”

These “distributed energy resources” (DER) could bring/ New Zealand, building energy resilience and reducing carbon emissions. There are also large economic benefits possible. A 2021 cost-benefit analysis for the Electricity Authority estimated that the uptake of DER could be worth around $6.9 billion for New Zealand.

Updated: 30 January 2026