Coal and gas are used to generate power when the hydro and wind-dominated power grid is stretched.

On a retail level, power prices are rising, mostly because of increased distribution costs.

Stats NZ last week said retail power prices were up 11% in the year to July, while gas prices were up 14%.

“Our advocacy is the solution to power prices is just to build more renewables,” Fuge told the Herald.

“No one foresaw the collapse on the upstream gas market, and how rapid it was going to be.

“And so the fact that at times we’ve had to dispatch diesel combined with the fact that at times the gas price has also gone up by nearly 50% has meant that that has flowed through to the electricity market,” he said.

“The answer is to get off base load gas [for continuous power generation], as we’ve done, and to build more renewables as we’re doing.

“And the answer is to actually keep going.”

Fuge said a renewable energy building boom was under way.

“We’re investing double, as a country, than any other country in the world per capita, and we’ve got to keep going with that because one of our strengths … is our access to renewable development.”

Contact has been an active developer of geothermal assets over the years.

“We are delighted with geothermal – it’s New Zealand’s nuclear energy, and we can see a decade of work in front of us in terms of continued investment, and we look forward to that continuing.

“In terms of baseload, it’s incredibly valued in terms of resilience, it’s incredibly valuable.”

When it comes to separating the retail and generation roles of the big power companies, Fuge said “shuffling papers” and restructuring through separation “does not build one electron of new renewable energy”.

“The focus of the industry and the country has to be on investing in more renewable energy, and anyone who detracts from that focus is not doing the right thing by the country,” he said.

He said the energy component of consumers’ power bills had stabilised.

“There’s still a bit of volatility but consumers are protected from that.

“There is a problem in that lines charge increases are significant, but that will wash through over time.

“Honestly, there is no value in restructuring.

“Energy is always a political football, but what has been demonstrated time and again is that a free and open market is absolutely fundamental to ensuring long-term stability and investment.

“Any country that interferes or tries to subsidise energy, whether it’s giving away cheap petrol or whatever, just inevitably finds itself in more of a problem than when they started.”

Futures market pricing suggests wholesale prices will come down gradually over the next few years.

Contact chief financial officer Matt Forbes said that decline reflected the additional renewable assets set to come online over the next few years.

“We are building a [geothermal] plant at Te Mihi and are building a battery at Glenbrook, which will reduce volatility,” he said.

Contact had secured more gas, and Huntly firming options – contracts to secure generation capacity specifically from Huntly’s coal and gas-fired Rankines – which would help put a cap on future winter pricing.

The big power companies have also all backed an initiative for more coal to be stockpiled at Genesis Energy’s Huntly Station as a back-up.

“I think the best outcome would be we buy the coal and it stays in the pile and never gets used, but it’s there if we need it as a country, and I think that’s the right outcome for New Zealand,” Fuge says.

Looking ahead, Fuge said Contact had a large programme of work in front of it.

In the meantime, Contact was focusing on absorbing Manawa, which it bought in a $1.9 billion deal in July, into the group.

“Our focus is on ensuring we merge properly with Manawa and create something better than the two individual parts,” he said.

Contact earlier reported a net profit of $331 million and earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf) of $872m for the 2025 financial year.

The company’s underlying net profit, excluding the release of the Ahuroa Gas Storage facility onerous contract provision, was up 13% from the previous year, while ebitdaf increased by 17%.

Jarden analysts said the result was in line with expectations.

“We maintain a positive medium-term view, with the 2026 recovery underpinned by improved lake storage, continued pricing discipline, and delivery of firming projects,” Jarden said.

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