New Zealand utility Genesis Energy will buy 240,000t of coal from BT Mining — a joint venture between producers Bathurst Resources and Talley's Energy — over two years to support its partially coal-fired Huntly Power Station.

The agreement will reduce Genesis' reliance on overseas coal shipments and mitigate risks from global market volatility and shipping disruptions, the company said on 22 September.

New Zealand's conservative government has supported the move. Reintroducing domestically sourced coal as a back-up fuel for electricity generation will bolster the country's energy resilience, resources minister Shane Jones said.

New Zealand firms imported 1.5mn t of mostly sub-bituminous coal over the financial year to 30 June, up by four-fold from 346,952t in the previous year, data from the country's ministry of business innovation and employment (MBIE) show.

Genesis was likely New Zealand's main buyer of coal over the period. It boosted coal-fired generation over the year and more than doubled its coal stockpile to 578,000t from 207,000t.

Huntly plays a supportive role in New Zealand's power system, kicking in when renewable generation falls. Genesis planned to retire one of the plant's coal- and gas-fired generators in 2026 and another two in the early 2030s. But the company in late-June signed a non-binding agreement with other New Zealand utilities to keep the units on line until at least 2030.

Thermal generation from diesel, gas, and coal accounted for 10pc of New Zealand's total generation over the week to 14 September, up from 8pc over the same period a year earlier, data from state-owned grid operator Transpower show.

Genesis is looking into firing Huntly's generators with torrefied wood pellets. But coal is currently much cheaper than biomass.