Shane Jones unveils plan to double geothermal energy by 2040

Contact Energy’s 174MW geothermal power station at Tauhara began operating in May.

Resources Minister Shane Jones has unveiled a plan to double New Zealand’s geothermal energy production by 2040.

Jones launched “From the Ground Up” – a draft strategy to unlock New Zealand’s geothermal potential – for consultation in Taupō today.

He said the strategy sought to position the country as a global leader in sustainable geothermal development.

“New Zealand was at the forefront of global utilisation of geothermal energy for electricity generation, and today the sector is a vital contributor to our economy as part of our energy sector, tourism and beyond,” Jones said.

He said New Zealand’s unique geographic position on the boundary of both the Australian and Pacific tectonic plates, coupled with the Earth’s thin crust along that rift, offered a significant geological advantage.

Jones said he saw potential for the geothermal sector to expand and diversify into areas such as the extraction of minerals from geothermal fluid, and more use of direct geothermal energy to power industrial, commercial and agricultural applications.

Among the proposals were improving access to geothermal data and ensuring regulatory settings were fit for purpose.

The draft strategy paper said “supercritical” geothermal technology – which involves drilling deeper into the Earth’s crust – could offer up to three times more energy than current geothermal energy.

The Government has ring-fenced $60 million from the Regional Infrastructure Fund to fund research into the “super” resource.

Jones said $5m of that funding has been drawn down for work on the detailed design and cost to drill the first of three exploratory deep wells in the Taupō Volcanic Zone.

New Zealand’s first, and the world’s second, geothermal power station was Wairakei, near Taupō, which started generating electricity in 1958.

Wairakei is now one of 17 geothermal power plants across eight geothermal fields in New Zealand – which deliver a combined generation capacity of 1207 megawatts.

Unlike wind and solar, geothermal energy is consistently available.

In 2024, geothermal energy accounted for 8741 GWh, or 19.9%, of New Zealand’s annual electricity generation.

The country’s geothermal reservoirs (up to 350C and located between 1km and 3.5km deep) have long powered renewable energy.

The Taupō Volcanic Zone offered a rare opportunity to access superhot fluids at depths beyond 5km and temperatures exceeding 400C, the paper said.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.