New analysis from EECA (Energy Efficiency and Conservation Authority) has highlighted that while fossil fuels continue to dominate in New Zealand, supplying about two-thirds of the energy we use — investments in electricity and renewable fuels are gradually shifting the mix of energy powering businesses.
EECA’s Energy End Use Database (EEUD) provides the latest information on energy type and end use in New Zealand homes and businesses, between January 1, 2017 and December 31, 2024 (the latest available data). It shows which sources of energy (including coal, petrol, diesel, electricity, biomass and other renewable sources) are being used across the economy, and how it’s changing.
In the business sector (across all types of business), fossil fuels fell by four percentage points to 51% of the energy mix. One contributor to that trend was falling coal use in both dairy manufacturing and meat processing, whereas electricity’s share of the business energy mix has been growing gradually. Biomass (or wood fuel) remains steady.
EECA’s Group Manager, Insights Data and Communications Megan Hurnard says the gradual shift by businesses toward electricity use reflects recognition of the energy source as being a relatively stable and increasingly affordable option in the current context.
“While still small increments, we now see a clear trend of uptake. We expect that to continue, given there is still significant potential for fuels like electricity and renewables like biomass to enhance efficiency, lower emissions and reduce exposure to fuel price fluctuations,” says Hurnard.
Fossil fuel use across all businesses appears to have peaked in 2019
Fossil fuels reached their peak share of energy across all businesses (including the industrial/manufacturing, commercial and agriculture, forestry and fishing sectors) in 2019 at 55% and have since trended down to 51% in 2024.
Over the same period, electricity’s share of the overall business energy mix has increased by 4 percentage points from 34% to 38%.
Dairy manufacturing and meat processing show impacts of new fuel investments
Dairy product manufacturing is New Zealand’s largest consumer of manufacturing and industrial energy at 14% and, while it mostly runs on fossil fuels, the EEUD shows there has been a reduction in coal use, supported by investments in electric technology at some facilities.
Fossil gas for dairy manufacturing saw an upswing in 2023 and remained stable into 2024. In 2025 Fonterra announced a plan to convert two of its gas boilers to electricity, which should impact gas use in future EEUD data.
Coal use is also falling in the meat and seafood sector, supported by growing adoption of electric and low-emissions technologies.
Biomass’ share of industry energy mix remains steady
The share of alternative renewable fuels (mostly biomass/wood with some geothermal and biogas) used by the industrial and manufacturing sector remained roughly steady for the last 8 years at around 15%.
Use of electricity for industry and manufacturing grew, while reliance on fossil fuels dipped to 54%, the lowest share in eight years.
“We are yet to see consistent increases in the use of renewable energy sources such as biomass,” says Hurnard.
“We expect further electric and biomass boiler conversions after 2024 to show up in the data in the next few years.”
Transport yet to realise full efficiency benefits of electrification
Transport remained almost exclusively fossil-fuel-driven — with diesel making up around half the energy used.
Together, conventional (non-plug-in) hybrid electric vehicles, plug-in hybrids and battery-electric vehicles combined used just 4% of road transport energy. The majority of that was used by non-plug-in hybrids, which rely on fossil fuels despite being more efficient than traditional petrol or diesel models.
The data reflects a fleet that is changing gradually, with early electrification not yet significantly shifting overall energy use. In addition, because electric vehicles are typically much more efficient than petrol or diesel engines, they use less energy per vehicle than fossil-fuelled alternatives, further lowering their share of transport energy consumption.
Hurnard says the EEUD shows most electric and hybrid vehicles are in the commercial and light passenger vehicle categories (vans, utes, and cars). Only a very small proportion of trucks and motorcycles run on electricity.
“Transport accounts for 39% of the country’s energy consumption and is typically powered by diesel (51% of transport energy) and petrol (41%),” she says.
Electricity demand from data centres growing fast
Data centres, while only consuming about 0.5% of total electricity demand in 2024, have increased energy consumption rapidly in recent years, following a period of steady growth between 2017 and 2020.
From 2022 onwards, demand rose sharply, reflecting the development of hyperscale data centres.
As a result, data centre electricity use has grown to become a more material component of New Zealand’s overall electricity demand, and demand is expected to continue increasing.
“With growing attention on how digital infrastructure impacts energy systems, there is an opportunity for ongoing efficiency gains and smart electricity use to enable growth while balancing electricity supply and demand,” says Hurnard.