New Zealand Electricity Market (NZEM)

New Zealand. Status: operational.

Wholesale design: Centralised pool with generator offers, purchaser bids, nodal scheduling/pricing/dispatch and half-hour final spot prices. Financial hedges are traded separately.

Operator
Transpower New Zealand as System Operator; Electricity Authority as regulator and pricing manager governance body
Nominal frequency
50 Hz
Where energy trades

Where does energy trade in New Zealand Electricity Market (NZEM)?

Energy in New Zealand Electricity Market (NZEM) trades in 2 layers: spot energy and hedge contracts.

What a battery can sell

What ancillary services can a battery sell in New Zealand Electricity Market (NZEM)?

New Zealand Electricity Market (NZEM) has 6 ancillary-service products, across 4 families — operating reserve, reactive power & voltage, black start & restoration and other services: Black Start, Fast Instantaneous Reserve, Frequency Keeping, Over-Frequency Reserve, Sustained Instantaneous Reserve, Voltage Support. Response timing, direction and eligibility for each are in the cards below, as the official sources state them.

Facts below are stated as the official sources state them. A missing line means the source does not state that value — never that the value is zero.

Operating reserve

  • Fast Instantaneous Reserve FIR

    operational

    Arrest frequency decline after the largest credible generating or transmission contingent event and prevent frequency falling below the security limit.

    Direction
    raise generation; interrupt load
    Full activation
    6 s
    Sustain
    at least 60 s
    Trigger / range
    Contingent event; interruptible load is expected to respond within one second after frequency reaches 49.2 Hz.
    Eligibility
    Technically approved partly-loaded or tail-water-depressed generation, storage where compliant, and interruptible load.
    Typical procurement
    Procured quantity is driven by the largest credible contingent event and transfer constraints for each trading period.

  • Over-Frequency Reserve OFR

    operational

    Automatically reduce generation following a frequency rise, including an HVDC-related contingent event.

    Direction
    lower generation
    Trigger / range
    Contracted over-frequency relay setting; no single national threshold is stated in the procurement-plan overview.
    Eligibility
    Generation capable of automatic disconnection or reduction and meeting contract tests.
    Typical procurement
    System Operator net purchase assessment; stable typical MW not published in the cited plan.

  • Sustained Instantaneous Reserve SIR

    operational

    Restore and stabilise frequency after a contingent event long enough for redispatch.

    Direction
    raise generation; interrupt load
    Full activation
    60 s
    Sustain
    at least 15 min
    Trigger / range
    Contingent event; interruptible load frequency relay settings are contract/Code specific.
    Eligibility
    Technically approved generation, storage where compliant and interruptible load.
    Typical procurement
    Based on the largest credible contingent event for each island/trading period.

Reactive power & voltage

  • Voltage Support VS

    operational

    Provide reactive-power and voltage-control capability needed to keep grid voltage secure.

    Direction
    reactive injection; reactive absorption
    Trigger / range
    System Operator voltage requirement and contract-specific setpoints.
    Eligibility
    Contracted facilities meeting voltage-support technical requirements.
    Typical procurement
    Reactive requirement is location- and system-condition-specific, commonly expressed in MVAr rather than MW.

Black start & restoration

  • Black Start BS

    operational

    Start without grid supply and energise transmission assets and other generation during system restoration.

    Direction
    restore generation
    Trigger / range
    System restoration instruction.
    Eligibility
    Stations passing black-start technical assessment and contract testing.
    Typical procurement
    Procurement is station-count/location based rather than a published stable MW range.

Other services

  • Frequency Keeping FK

    operational

    Manage short-term supply-demand imbalance and keep frequency at or near 50 Hz.

    Direction
    raise; lower
    Sustain
    at least 30 min
    Trigger / range
    System Operator regulating instructions; no single fixed frequency trigger.
    Eligibility
    Technically reviewed generators or other eligible resources with an ancillary-service procurement contract.
    Typical procurement
    Net purchase quantity is assessed separately for each island and trading period.

    The current official overview describes quick variation in response to instructions but does not publish one universal full-activation time. Providers must maintain capability for the 30-minute trading period.

Getting paid to exist

Does New Zealand Electricity Market (NZEM) have a capacity mechanism?

No. New Zealand Electricity Market (NZEM)'s capacity/adequacy arrangement: No central capacity market.

No central capacity market

none operational

Resource adequacy is supported by spot prices, contracts, instantaneous reserve and System Operator security arrangements rather than a forward capacity auction.

Auction held in 2025
No — No capacity auction for this market was found to have been held during 2025 in the sources reviewed.

The 2025 ancillary-services tender was a service-contract tender for 2026-27 and not a capacity-market auction.

Caveats

Technical notes

Frequency keeping and instantaneous reserves clear half-hourly; over-frequency reserve, voltage support and black start are procured under ancillary-service contracts.

Where this comes from

Official sources

Service specification

Market explainer

Capacity-mechanism explainer

Current as of · from the Global Electricity Market Catalogue v1.2.0 (compiled to , CC BY 4.0). Facts belong to the linked official authorities; verify the current rules before design or bidding decisions.

Questions

Common questions about New Zealand Electricity Market (NZEM)

Who operates New Zealand Electricity Market (NZEM)?
New Zealand Electricity Market (NZEM) covers New Zealand and is operated by Transpower New Zealand as System Operator; Electricity Authority as regulator and pricing manager governance body.
Was a qualifying capacity event held in New Zealand Electricity Market (NZEM) in 2025?
No. No central capacity market: no qualifying 2025 event is recorded. No capacity auction for this market was found to have been held during 2025 in the sources reviewed.
How is energy traded, priced and settled in New Zealand Electricity Market (NZEM)?
New Zealand Electricity Market (NZEM): Centralised pool with generator offers, purchaser bids, nodal scheduling/pricing/dispatch and half-hour final spot prices. Financial hedges are traded separately.
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