Under the Resource Management Act (RMA), regional councils classify how geothermal systems can be used, taking into account various cultural, scientific, and economic development factors.

Because the resource is largely concentrated in the Taupō Volcanic Zone, the Waikato Regional Council is one of the most influential regulators. The Council assigns one of five classifications to geothermal systems: development, limited development, research, protected, or small.

In March, Resources Minister Shane Jones released the From the Ground Up strategy, which is motivated by the goal of doubling geothermal energy use. 

“This strategy provides momentum by clearing barriers, speeding up development, giving investors confidence and giving developers a green light to get on with it,” Jones said at the time.

Around 18% of electricity in New Zealand comes from geothermal, which provides a reliable source of baseload generation. Geothermal energy is also used for direct heating. 

Contact calls for accelerated reclassifications

Last month, the Ministry of Business, Innovation, and Employment (MBIE) released submissions on the draft geothermal strategy.

Contact Energy, the largest geothermal electricity generator in New Zealand, was broadly supportive, but it urged the Government to go further and faster in order to meet the 2040 goal.

"The stated goal of doubling geothermal energy use by 2040 simply cannot be met using current geothermal technology unless some protected fields, under the Resource Management Act (RMA) are reclassified for development,” Contact said in its 2025 submission.

“We recommend that government works with industry to formulate a practical process for reassessing field development risk for current protected or research fields such as Reporoa."

Contact sought Government-led investment for the geoscience surveys needed to investigate systems for commercial viability, as well as greater urgency. 

"This activity is crucial to the central objective of the strategy, it therefore cannot be left to Horizon 3; the work must start immediately,” the company said, referring to the possibility of reclassifying fields.

“While we recognise the practical sense in utilising all available existing data, this should be driven with the purpose of unlocking new fields, rather than an abstract exercise that must be complete before reclassification is even considered.”

Contact recommended that the Government consider the use of National Policy Statements (NPS) to provide regional authorities with guidance on resource classification, allocation and protection.

Several other submitters also called for an NPS, including iwi/Māori. As MBIE identified in its summary of submissions, iwi/Māori organisations commented on the importance of Treaty of Waitangi partnership, Māori rights and interests with regard to geothermal, which is considered a taonga in Te Ao Māori, and the integration of indigenous knowledge.

Energy sovereignty calls for more geothermal 

The final strategy did include actions related to reclassifying geothermal systems.

The Horizon 1 timeframe (2026-2027) included a possible action to explore the role of policy direction for managing geothermal resources, including the role of national direction under the new resource management system.

In Horizon 2 (2028-2029), the strategy called for investigating the appropriateness of system classifications, drawing on data collation undertaken in Horizon 1.

In an interview with Carbon News, Jones said he had spoken with the minister for RMA reform, Chris Bishop, about developing an NPS for geothermal.

Jones said he was confident that work on the policy statement would be a priority under the new system, which the Government is legislating for with the Natural Environment and Planning bills. 

“I mean it is a Godzilla piece of legislation,” Jones said, adding that he and Bishop were aligned on the importance of a geothermal policy statement. 

“He shares my view that energy sovereignty, the simplification and opening up of opportunities for more geothermal, is a matter of national security.”

The strategy identified a need to update outdated regulations for geothermal and make it easier for developers and other parties to access data. Jones said existing data on geothermal was fragmented, and rules could differ between councils.

“That’s why I want to see a centralisation of power and authority through a national policy statement, because the Crown ultimately is responsible for energy security and energy resilience,” he said.

The Government has provided financial backing for geothermal energy, including $60 million from the Regional Infrastructure Fund to support supercritical geothermal research.

Relationships with Māori 

Asked if he was confident about meeting the 2040 goal, Jones said: “I think there’s a reward for being aspirational.”

The strategy had created a platform for stakeholders to aim towards a common target, he said, adding that Contact Energy wouldn’t be the only party that benefited from increased access to geothermal resources.

Jones, who with his New Zealand First hat on is campaigning for the big electricity gentailers to be broken up, was critical of Contact over its relationships with Māori landowners.

“I would expect Contact Energy to vastly improve their working relationship with the local Māori landowners because often access to the geothermal energy is on tāngata whenua land.”

A spokesperson for Contact said the company was a Te Tiriti aware organisation, with a commitment to being the preferred partner of tāngata whenua.

Contact recently held a summit with iwi/Māori partners in Taupō called Hui Taumata.

“We know the wider environment is changing. Laws, policies and decisions about natural resources continue to affect tāngata whenua rights and interests,” the Contact spokesperson said.

“Hui Taumata was a way for Contact to reaffirm that we want to be a better partner, build deeper, more enduring relationships together, grounded in trust, reciprocity and shared commitment to the sustainable management of Aotearoa New Zealand’s natural resources.”

Contact has continued to make major investments in geothermal energy.

In 2024, two new power stations with a combined investment value of $1.2 billion were commissioned in Taupō. In addition, Te Mihi Stage 2, part of the staged replacement of the Wairākei geothermal station, which was built in the 1950s, was expected to be online in the middle of 2027.

“We support the continued growth of geothermal energy use.  We want to ensure this low carbon, renewable energy source is unlocked for the benefit of all, and our economy.”