NZ Commits $50M to Accelerate Geothermal Energy Development and Regional Growth

The New Zealand Government has committed $50 million from the Regional Infrastructure Fund (RIF) to accelerate geothermal energy exploration and development, in a move aimed at expanding the country's renewable energy capacity, strengthening regional economies, and supporting Māori-led energy projects.

Regional Development and Resources Minister Shane Jones announced the funding initiative, describing geothermal energy as a strategic resource capable of delivering reliable, low-emissions power while driving regional economic growth.

"Early-stage geothermal exploration involves high upfront costs and significant uncertainty," Mr Jones said. "Targeted government investment will help de-risk exploration and allow more projects to get off the ground."

The new funding package is designed to support exploratory work that could unlock new geothermal power stations and industrial heat applications across the country.

Strengthening New Zealand's Renewable Energy Portfolio

New Zealand is already one of the world leaders in geothermal electricity generation, with geothermal energy contributing around 20 percent of the country's electricity supply. Unlike wind or solar, geothermal power provides stable, baseload renewable energy, meaning it can generate electricity continuously regardless of weather conditions.

Beyond electricity production, geothermal heat has extensive direct industrial and commercial uses. It is widely used for:

• Timber drying and dairy processing

• Heating greenhouses for horticulture

• Aquaculture operations such as prawn farms

• Heating buildings and water in hospitals, homes and tourism facilities

By investing in geothermal exploration, the government aims to unlock additional renewable heat and power resources that could further reduce reliance on fossil fuels.

"Given the scale of opportunity, it makes sense to ringfence $50 million to ensure geothermal projects are well positioned to lift productivity and strengthen regional resilience," Mr Jones said.

First Projects Securing Funding

Three geothermal initiatives have already secured $23 million in support through the Regional Infrastructure Fund.

Two of the projects — Taumanu and Kopura, located near Rotomā and Kawerau in the Bay of Plenty — have received $10 million loans each to support early-stage development work.

These projects are focused on confirming geothermal resources that could potentially support two new geothermal power stations.

The funding will support critical exploratory activities including:

• Underground geothermal surveys

• Exploration well drilling

• Reservoir testing to confirm resource viability

Both projects are being developed through joint ventures between renewable energy company Eastland Generation and local Māori land trusts, reflecting a growing role for iwi and Māori organisations in New Zealand's renewable energy sector.

"These projects have the potential to deliver reliable, home-grown energy while boosting Māori economic development and regional prosperity," Mr Jones said.

Jobs and Regional Economic Impact

If successful, the Taumanu and Kopura projects are expected to generate around 140 construction jobs during the development phase and create up to 20 permanent operational roles once power stations are established.

The projects are also expected to stimulate local supply chains, creating opportunities for regional contractors, service providers, and equipment suppliers.

Government officials say the initiative aligns with broader efforts to strengthen regional infrastructure while supporting New Zealand's transition to a low-emissions energy system.

Research-Driven Exploration in Whakatāne

A third project receiving support is the Whakatāne Geothermal Temperature Gradient Well Programme, which has been awarded a $3 million grant.

The research initiative is being led by the University of Auckland's Geothermal Institute, one of the world's leading centres for geothermal research.

The programme will drill three exploratory temperature-gradient wells in the Whakatāne area to gather geological data and assess geothermal potential.

Researchers aim to reduce uncertainty around the geothermal resource and pave the way for future renewable heat supply for industrial facilities and community energy users in the eastern Bay of Plenty.

The data collected could help attract further investment in geothermal heating solutions for industries seeking low-carbon energy alternatives.

Building on Previous Geothermal Investments

The $50 million ringfenced for geothermal development builds on earlier government initiatives to expand the sector.

In November 2024, the government allocated $60 million specifically for supercritical geothermal development — an advanced form of geothermal technology capable of producing significantly more energy from deep geothermal reservoirs.

Supercritical geothermal systems operate at extremely high temperatures and pressures, potentially delivering much higher power output than conventional geothermal wells.

Together, the funding packages signal a long-term commitment to unlocking New Zealand's geothermal resources as part of the country's clean energy strategy.

More Projects to Be Considered

Officials confirmed that geothermal projects which have already applied to the Regional Infrastructure Fund and meet eligibility criteria will be considered for the newly ringfenced funding.

In addition, new applications will be accepted, with successful projects announced once evaluation processes are completed and ministers approve funding decisions.

Industry leaders say the initiative could trigger a new wave of geothermal exploration, particularly in regions with known geothermal systems such as Bay of Plenty, Taupō, and the central North Island volcanic zone.

As global demand for clean, reliable energy grows, New Zealand's geothermal sector is increasingly seen as a key asset capable of delivering both energy security and regional economic transformation.