Advancements in Geothermal Energy: New Zealand's Ngā Tamariki Expansion Leads the Way
By: Robert Buluma
Geothermal energy, harnessed from the Earth's internal heat, represents one of the most reliable and sustainable sources of renewable power available today. Unlike solar or wind, which depend on weather conditions, geothermal provides consistent baseload electricity, making it a cornerstone for energy security in regions with suitable geological features. As the world grapples with climate change and the need to transition from fossil fuels, geothermal is gaining renewed attention. In 2026, global investments in geothermal are surging, with projections indicating annual funding could reach nearly $9 billion by 2030. This growth is driven by advancements in next-generation technologies, such as enhanced geothermal systems (EGS), which expand accessibility beyond traditional hotspots.
Globally, geothermal capacity stands at over 16,873 megawatts (MW) as of late 2025, with top producers including the United States, Indonesia, the Philippines, Turkey, and New Zealand. The U.S. leads with significant installations in California, but Indonesia is poised to overtake in investments by 2027, leveraging its volcanic archipelago. Next-generation geothermal, which uses innovative drilling and fracturing techniques to access heat in non-permeable rock, could unlock up to 120 gigawatts (GW) worldwide by 2035 and over 800 GW by 2050—potentially supplying 8% of global electricity. In the U.S., policies like tax credits from the Inflation Reduction Act are slashing costs by up to 85%, making EGS competitive at $60-70 per megawatt-hour. Tech giants like Google and Meta are signing major offtake agreements for geothermal to power AI data centers, highlighting its role in firm, clean energy. Meanwhile, countries like Kenya and the Philippines are advancing large-scale projects, pushing geothermal into the mainstream.
New Zealand, a geothermal powerhouse, exemplifies how this resource can be integrated into a national energy strategy. Situated on the boundary of the Indo-Australian and Pacific tectonic plates, the country boasts abundant high-temperature fields, particularly in the Taupo Volcanic Zone. Geothermal energy supplies around 18-20% of New Zealand's electricity, making it the second-largest renewable source after hydropower. In 2021, it accounted for 19% of total generation, with an estimated potential of 1,000 MW untapped in the North Island alone. The resource's reliability—independent of weather—has been hailed as superior to other renewables, aiding New Zealand's goal of 90% renewable electricity by 2025 and doubling geothermal use by 2040. Historically, development began in the 1950s with the Wairakei plant, the world's second geothermal power station. Today, 20 plants across eight fields generate about 8.06 terawatt-hours (TWh) annually. Beyond electricity, direct uses include heating in industries like timber drying and tourism, contributing 11% to primary energy supply.
A prime example of New Zealand's geothermal innovation is the recent expansion at Mercury NZ's Ngā Tamariki Geothermal Station, located 17 km northeast of Taupō. Commissioned in 2013, the station originally operated at 86 MW. In a major milestone announced in early 2026, the new fifth-generation unit began delivering electricity to the grid, strengthening the nation's renewable baseload supply. The $220 million expansion project, which broke ground in May 2024, is on track for full commissioning by March 2026. This addition boosts the station's capacity to 132 MW by incorporating a 46 MW net increase, elevating annual output by 390 gigawatt-hours (GWh)—enough to power approximately 55,000 homes, roughly the equivalent of Tauranga city's residential demand.
The project exemplifies collaborative development, involving partnerships with the Tauhara North No.2 Trust and mana whenua Ngāti Tahu Ngāti Whaoa. These indigenous groups, as stewards of the land, have been integral to ensuring sustainable practices that respect cultural values. Mercury NZ's Chief Executive, Stewart Hamilton, highlighted the team's efforts in a recent update, noting the excitement as the project nears completion. The expansion is part of Mercury's broader $1 billion investment in three major renewable developments, including geothermal drilling campaigns at Kawerau, Ngā Tamariki, and Rotokawa to sustain long-term capacity.
Visually, the Ngā Tamariki site features an array of cooling towers and pipelines set against the lush North Island landscape, symbolizing the blend of technology and nature.
Environmentally, geothermal in New Zealand is relatively benign, with low emissions compared to fossil fuels. While early unregulated developments caused issues like subsidence and over-extraction, modern regulations under the Resource Management Act ensure sustainability through monitoring and reinjection of fluids. The Ngā Tamariki project incorporates advanced binary cycle technology, which efficiently converts lower-temperature resources into power while minimizing waste.
Economically, this expansion bolsters New Zealand's energy independence, reducing reliance on imported fuels amid volatile global markets. It creates jobs in engineering, construction, and maintenance—evident in stories like that of graduate engineer Lexi Richards, who contributed to the project. Broader benefits include enhanced grid stability, supporting the integration of intermittent renewables like wind and solar.
Looking ahead, New Zealand's draft national geothermal strategy aims to double usage by 2040, fostering innovation and Māori economic development. Globally, lessons from Ngā Tamariki could inform projects in emerging markets like Africa and Latin America, where geothermal potential remains underexplored. With the market projected to reach $13.56 billion by 2030 at a 5.3% CAGR, investments in next-gen tech will be key.
In conclusion, the Ngā Tamariki expansion underscores geothermal's pivotal role in a sustainable future. As New Zealand and the world accelerate clean energy transitions, such projects demonstrate how harnessing the Earth's heat can power homes, economies, and progress—reliably and responsibly.
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