New Zealand's prolonged recession has thrown up one short term spinoff - breathing space to get more than $10 billion in new power generation on stream.

Although consumption was trending down last year as the economy slowed, the country has gone from a famine - low lakes and high prices forcing some users to cut production - to something of a feast for the early part of this winter; lake levels at historic highs and wholesale power prices tracking at a fifth of what they were at the same time last year.

The fall in power consumption has been dramatic. In the first quarter of this year it dropped by 5 per cent compared with the same quarter last year. It was the lowest figure in over five years, reflecting the economic downturn dampening electricity consumption, and reduced use at the biggest single user, the Tiwai Point aluminium smelter, in the first half.

From 2 per cent annual growth for the past two decades (fuelled most recently by heat pump installations in homes, dairy conversions and energy hungry hotels) this reduced demand is set to continue into next year with conservative assumptions pointing to to a pickup in 2011, but just by 1.5 per cent.

That has generators reworking their numbers - projects that were marginal while the economy was growing don't stack up in today's terms and taking the longer view requires a leap of faith with uncertainty hovering around carbon pricing, interisland transmission pricing and the ministerial review of the electricity sector. So though there's a demand lull there's also a commitment pause.

Already a handful of big wind farm projects are in the doldrums - mainly due to high prices for imported equipment and resource issues; consents for gas fired power stations in and near Auckland are parked and it is understood Contact Energy would have pushed ahead with its Ti Mihi geothermal plant by now if not for the slump in demand.

Investment in new generation typically has a 20- to 50-year outlook. So what's on the drawing board to meet demand which over the past year typically has peaked at around 6400MW on some cold days during winter?

Government figures show some projects with the potential to generate 5275MW are either being built, have received consent or have applied for consent. The 45 plants due for completion over the next decade range from tide powered pilot plants to one of the biggest wind farms in the southern hemisphere.

Hydro generation is both the strength and weakness of the New Zealand system as it supplies at least 65 per cent of power but is notoriously vulnerable to low rainfall given limited storage capacity of around 10 weeks' winter electricity demand. Existing transmission constraints (requiring multibillion-dollar catchup infrastructure work by Transpower) aggravate tight supplies which would become critical in the event of a major equipment failure.