Energy Minister Megan Woods says "commercial decisions" by New Zealand's power companies were to blame for last night's shortages.
"This wasn't a physical constraint of generation," she said.
"We did have the ability to generate the amount of electricity that we needed to keep the lights and the heaters on for New Zealanders last night but commercial decisions were made not to."
Woods told Parliament this afternoon that the electricity market had "clear warnings" about yesterday's cold weather.
Extra capacity could have been used but was not.
• At 6.43am, Transpower had released a notice to power companies and asked for either more generation, or less load on the network. At 1.02pm, it followed up by warning there was not enough generation for the evening peak.
• At 6.40pm, it issued a request to shed load by 1 per cent. At 7.10pm, it issued the emergency notice, saying it had not received enough generation offers.
Woods said the timeline of events made three things clear.
"The electricity market had clear warnings about the potential for the shortage, secondly, there was inadequate communication with the public and, thirdly, there is enough generation in the system."
Woods said she had been given assurances on New Zealand's power generation ability.
"I would like to assure New Zealanders that we have received those assurances from Transpower.
"Given how quickly the situation changed yesterday, this is an issue I will continue to seek assurances on," Woods said.
"The assurance that I can give New Zealanders that we did have the physical capacity, [to generate].
"Commercial decisions were made not to bring on that generation."
Woods said additional fossil fuel exploration would have not prevented last night's shortage.
She said electric vehicles charging were not to blame for the outages.
"Last night if every EV and every hybrid vehicle was plugged in and charging it would have required 42 megawatts," - equal to the power use of a town such as Mosgiel and equivalent to a quarter of a standard wind farm.
The energy minister said she had been warned about generation concerns this year because of low lake levels, but that those issues had been resolved.
"In the past six months I have received a range of advice," she told MPs.
Genesis Energy confirmed it decided to not turn on an extra boiler at the Huntly power station - because it did not expect it would be needed.
Last night was one of the coldest nights of the year.
Meridian had cancelled plans to work on one of its wind farms after receiving the weather warning, Woods said.
'Not good enough': Ardern
Earlier today Prime Minister Jacinda Ardern said she wants to find out if last night's loss of power to thousands of North Island homes could have been prevented but "it was not good enough that we could not warm our homes".
Ardern said they should know more about what happened this afternoon.
Transpower earlier today said Kiwis were close to another power crisis this morning after tens of thousands of Kiwis were plunged into darkness last night.
General manager of operations Dr Stephen Jay told the Herald he couldn't rule out any further disruption to the network, stating "the emergency is far from over".
"Things are running tight. Supplies have been running to the wire this morning."
Last night's outages affected parts of Wellington, Kāpiti Coast, Taupō, Hamilton, Napier, Hastings, Auckland and Whangārei.
None were warned yesterday that they would be without power, on a night which saw many cities head towards, or below, zero degrees.
Woods said Transpower had issued a warning notice yesterday that it was expecting a peak - however, that was to the market, not the consumer.
She had asked the Ministry of Business, Innovation and Employment to determine who and how it should be communicating with consumers to allow people to prepare.
After an event like last night they were looking into what happened and MBIE would be in charge of that.
It "wasn't acceptable" for Kiwis not to have power on one of the coldest nights of the year.
Woods said she would ask why Huntly wasn't "fired up" and left idle.
"If they failed us I need to know why."
Asked who had oversight of the generation capacity, Woods said there were responsibilities for Transpower and the Electricity Authority "to ensure that we are operating in a way in which it should do for New Zealanders".
Woods said peak demand in New Zealand usually sat around 6500MW - 6700MW.
However, last night it reached 7100MW.
"Nevertheless New Zealanders have a right to expect that on a cold night that the power will stay on and they'll be to keep the lights on and heat themselves.
"So I've asked a series of questions for people to go away and find some information on and I will be able to provide updates throughout the day."
Woods said she wanted to know whether "everything that could be generated was being generated".
"I've also taken the step of writing to the generators this morning and asking for reassurance that they are operating at generation capacity and seeking assurances of what might happen tonight."
However, she wanted "immediate answers" around why the power link between the North and South Island - the HVDC cable - was only operating at 50 per cent capacity.
"There was some spare capacity for the transfer of more power between the North and South Islands."
She had also questioned Genesis as to why it didn't bring its "third rankine" unit at Huntly.
There was 100MW of capacity lost at Tokaanu hydro system due to a storm "stirring up some weeds that stopped the ability for its system to generate power".
"So I just want some assurances from Genesis that we're not going to see maintenance issues like that happening again."
MBIE would now take over and co-ordinate communications between all involved including Transpower and the EA.
Asked whether she still had confidence in the electricity market to provide security, Woods said it was "well canvassed" that the Government had been asking questions as to whether it was "fit for purpose".
"There was a process that we started with our electricity price review, .. but we continue to ask questions in that. I want to know whether these are engineering constraints or market restraints."
National: This is third world country stuff
National Party leader Judith Collins likened the outage to that which happened in a third world country.
"We do not live in a third world country.
"It was one of the coldest nights of the year last night and many families couldn't keep warm.
"We should always expect that it will be colder in winter and we'll need to use more energy, but the Government has failed New Zealanders by not being prepared.
"The Government has to be able to keep the lights on. This useless lot has failed to do that. "
Collins called for Woods to be sacked.
"The Government needs to number 1, sack Megan Woods, she's hopeless.
"She knows the issue. She was their energy and resources spokesperson in 2017, she fully understands the issue and she has stood by while this very important area of natural gas has been destroyed as an industry," she said.
Deputy Prime Minister Grant Robertson said he was looking for more advice on whether the energy market was operating competitively and transparently. He said that the blackouts last night were unacceptable.
But he added that he didn't regret the oil and gas ban and said it wasn't related to last night's issues at all.
Many people took to social media to vent their frustration with many asking how this could happen in this day and age.
Earlier: Minister called for urgent briefing
Earlier today Megan Woods was in urgent talks with Transpower and the Electricity Authority.
Woods told media this morning - in a standup with the Prime Minister alongside her - that the link between the North and South Islands was only operating at 50 per cent capacity last night.
She said questions were being asked about whether the network was fit for purpose.
She questioned whether people had enough notice that power supplies would be cut.
Transpower this morning said it was trying to understand why there was not enough power to avoid a repeat.
"Last night, demand over the evening period reached record levels of around 7100 MW between 6pm and 6.30pm," said general manager operations Dr Stephen Jay.
"Unfortunately, there was not enough generation to meet demand. As a result, Transpower had to ask all the local lines companies and large industrial users to reduce demand to help keep the system in balance. Beyond temporarily cutting power to hot water cylinders, some customers were disconnected.
"Together with the sector, we will work to understand why there was not enough last night, to avoid a repeat."
While apologising to everyone who lost power, Jay said under normal circumstances there was typically more generation available in the system so that it could cope with high demand as well as the potential for other faults.
"With the widespread cold weather, we had been looking ahead to the evening peak throughout the day.
"We expected things to be tight due to some major generating units being unavailable and signalled to the market that other generation was required, and that demand should be voluntarily reduced where possible.
"Unfortunately, this is what came to pass. The prompt action of local lines companies and others in reducing demand helped keep the system in balance and prevented even wider problems.
"Problems such as last night's are very rare indeed and we will now be working with the sector to do all we can to avoid a repeat."
Jay said the outages occurred as record demand coincided with insufficient generation which resulted in the need to reduce demand to maintain system security.
"We apologise to everyone who was affected last night. It is fair to expect electricity to be there for people when they need it most, especially on one of the coldest nights of the winter."
National and Act MPs have put some of the blame of the power cut on the Government, saying its moves to cut gas production had a part to play.
Act's energy spokesman Simon Court said the Government had neglected to tend to a key issue: energy security. That had put families in the cold, and endangered those with medical conditions.
"The focus should be on security of supply and affordable electricity, not banning certain fuels."
Jay said Transpower gave more than 24 hours' notice to power distribution companies that supplies were at a critical level, or leading to an "all time record peak".
The first warning was given 4.40pm on Sunday before another warning was given at 1.02pm yesterday.
A final "Grid Emergency Notice" was then issued at 5.10pm stating that power would be out from 6pm until 7pm.
However, in many areas the outage lasted until at least 9pm. Some providers weren't expected to turn that power back on until closer to midnight.
When asked how New Zealand could be in the position to experience such a dire power cut, Jay said he didn't know and that would be investigated today.
He described the outage as a "very rare event" however it had warned all 29 of its "distribution networks" that there could be an issue.
He was unsure if the power outage affected anyone who was reliant on power for medical emergencies.
While the national grid operator claimed there wasn't enough electricity being generated to keep up with record demand created by cold temperatures, some providers said they had plenty.
But Electric Kiwi and Energy Collective chief executive Luke Blincoe told Mike Hosking on Newstalk ZB it was unclear whether rolling black-outs were really needed, on one of the coldest nights of the year.
He said generation doesn't appear to have been at capacity, as several units weren't running at the time.
Power was restored to most homes by 9pm.
North Island electricity company Powerco said its controlled hot-water systems across its network had been switched off to reduce network load and would be progressively switched back on overnight.
Vector said it used hot water control and battery installations to reduce the load on its network, as instructed by Transpower, and no customers were affected by outages.
However, freezing temperatures had put more pressure on power this morning.
MetService meteorologist Amy Rossiter said a southerly low-pressure weather system had resulted in temperatures dropping last night through to the early hours of today.
In Auckland, most parts of the city dropped to 5C at 9pm. The coldest area was in the south, in Ardmore, where the temperature got to 3.3C.
Anyone who lost power in Hamilton would have felt the cold winter bite, as the temperature in much of the city dropped to 0C by 10pm.
Early this morning, between 6am and 7am, the temperature was at its coldest, recording -3.7C.
And in Wellington, much of the city started feeling the cold early yesterday evening, as the temperature dropped to 5C in most parts by 5pm. At 6pm, the temperature was 2.6C in Lower Hutt.
Energy analyst Molly Melhuish this morning warned that surges in electricity demand were only going to become more common.
Melhuish told Newstalk ZB that cold snaps like the one that caused the surge in demand are becoming more common.
Power distribution companies, including WEL Networks, Powerco and Unison are being approached for comment.
A Powerco spokesperson said the outages affecting its network - Palmerston North, New Plymouth, Taranaki - were unplanned outages already affecting the network and were not connected to the Transpower advisory.
To deal with advisory, controlled hot water systems across Powerco's electricity network areas were temporarily switched off to reduce the load on the network and to avoid disconnecting any customers.