AI and New Zealand's Energy Future: What Businesses Should Know

Monday 3 August, 2026

AI is already being used to manage electricity grids around the world. But is your New Zealand energy business ready for the legal risks that come with it? Tompkins Wake is a member of Multilaw, which has recently published Technology and AI in the Energy Transition: From Optimisation to Infrastructure (Report), examining the governance challenges facing AI adoption in the energy sector. In this article, we consider what the report's findings mean for New Zealand energy businesses.

The report identifies that the challenge is no longer whether the technology works. It is whether organisations have the rules, processes, and safeguards in place to use it responsibly. This is especially relevant in New Zealand.

While the country is already a leader in renewable electricity generation, that does not mean it is automatically ready for AI. Capturing those benefits requires new rules, processes, and safeguards. As AI becomes more widely used across the energy sector, questions around privacy, cybersecurity, accountability, and risk management become increasingly important.

For New Zealand energy businesses, the issues identified in the Report are not distant international concerns. They are practical challenges that organisations face today. Existing legal and regulatory frameworks are still adapting to the rapid pace of technological change. It is essential for businesses to consider carefully how AI is governed before it is deployed.

Applying the Multilaw Framework: New Zealand's Energy Challenge Is Different

The Report frames AI governance as a universal challenge for energy markets in transition. New Zealand already generates more than 85% of its electricity from renewable sources such as hydro, wind, and geothermal energy. The challenge for New Zealand is not simply adding more renewable generation; it is managing an increasingly complex electricity system.

That complexity also raises a broader policy question. While many jurisdictions discussed in the Report are deploying AI through increasingly integrated energy systems, New Zealand’s electricity market remains more fragmented than most. That is the result of reforms designed to maximise competition. In our view, it is worth asking whether that structure is best suited to the coordinated data-sharing that AI depends on.

Electric vehicles, electrified industrial processes, and growing electricity demand are putting more pressure on the grid. At the same time, renewable energy sources are affected by factors such as weather conditions and seasonal changes.

AI has the potential to help by:

• Forecasting electricity demand more accurately
• Identifying equipment problems before they cause outages
• Managing congestion on the network
• Helping consumers and businesses use electricity more efficiently

But these benefits come with new risks that businesses need to understand.

Data Privacy Matters

Energy businesses using AI must comply with the Privacy Act 2020 when collecting and using smart meter data. The Report highlights data governance as a critical issue for AI in the energy sector. This is because AI systems depend on large volumes of data to function effectively.

In New Zealand, this issue is particularly relevant given the widespread rollout of smart meters. These devices collect detailed information about household and business electricity use, including when and how energy is consumed.

While this data is essential for improving grid efficiency and enabling AI-driven optimisation, it can also reveal sensitive information about people’s behaviour, routines, and daily activities.

The Report also notes a broader risk: when energy data is not properly governed, it can undermine public trust. The Report warns that electricity consumption data has sometimes been used for purposes far beyond its original intent. These include targeted marketing, insurance profiling, and other forms of behavioural analysis. This highlights why strong data governance is essential before AI systems are deployed at scale.

Businesses using AI should consider:

• Are customers aware of how their data is being used?
• Is the data being used only for legitimate purposes?
• Have privacy risks been properly assessed before deployment?

Who Is Responsible When AI Goes Wrong?

Contracts with AI technology providers must clearly address liability, performance, data ownership, and exit rights. The Report identifies contractual inadequacy as a systemic risk. Many organisations buy AI tools from external technology providers without adequate protections in place.

Key questions include:

• What happens if the AI becomes less accurate over time?
• Who owns the data generated by the system?
• Can the organisation easily switch providers if needed?
• Who is responsible if an AI-driven recommendation leads to operational or financial loss?

These are practical business risks. If these issues are not clearly addressed in contracts, disputes can become expensive and difficult to resolve.

Cybersecurity: A Business Risk, Not Just an IT Problem

Energy businesses adopting AI must ensure their technology suppliers meet recognised cybersecurity standards and that security obligations are written into contracts. As energy systems become more connected and digital, they can become more vulnerable to cyberattacks.

Many parts of New Zealand's electricity infrastructure were designed long before today's highly connected technologies existed. Adding AI systems without strengthening cybersecurity can create new points of vulnerability.

Businesses should ensure that:

• Technology suppliers meet recognised cybersecurity standards.
• Security requirements are built into contracts.
• Systems are regularly tested for vulnerabilities.
• Clear plans are in place to respond to incidents if they occur.

In a critical sector like energy, cybersecurity is not just an IT issue; it is a business and operational risk.

What Should Businesses Do Now?

The tools to forecast electricity demand, improve network performance, and identify equipment problems before they occur already exist. What is still developing are the legal, regulatory, and business frameworks needed to support their use.

For energy businesses, the message is clear. Good governance should not be something to consider after AI systems have been deployed. It needs to be built into projects from the start.

Before adopting AI, organisations should consider:

• Do our contracts clearly address performance, security, liability, and exit arrangements?
• What privacy risks could arise from the data being used?
• Are there cybersecurity or critical infrastructure obligations we need to meet?
• If something goes wrong, who is accountable?

Answering these questions early can significantly reduce future risk.

Organisations that take privacy, cybersecurity, accountability, and strong contracts seriously will be better placed to realise the benefits AI can offer. These include greater efficiency, reliability, and resilience across the electricity system.

How We Can Help

Tompkins Wake regularly advises energy businesses, technology adopters, and corporate clients on the legal and regulatory challenges arising from AI and digital transformation in the energy sector. Our Corporate and Commercial team has practical experience helping businesses navigate New Zealand's evolving legal landscape as AI becomes embedded in critical infrastructure and operational decision-making. If you would like advice on how AI governance issues may apply to your business or energy projects, please get in touch with our team.