James Bushnell, Energy Institute affiliate, said New Zealand’s vertically integrated “gentailer” model can help mitigate the investment risks created by volatile electricity prices. He cautioned against separating retail and generation, and argued that markets generally do a better job of determining which technologies should be built.

“James Bushnell, professor of economics at the University of California Davis, to muddy the narrative. In an interview published on 7 September 2026, Bushnell said there were ‘lots of elements of the market here that I find really appealing.’

His argument is straightforward. Vertical integration, owning both generation and retail, is a rational response to the investment risk created by wildly volatile electricity prices. When wholesale prices can lurch from $38/MWh in late 2024 to $223/MWh in early 2025, having retail and generation under one roof lets a company hedge internally rather than betting the business on a daily spot market.

Bushnell knows what the alternative looks like. In the early 2000s California forced retail and generation apart, everything moved onto the daily spot market, and ‘that didn’t go so well.’ One caveat worth flagging upfront: Bushnell was hosted here by ERGANZ, the industry body for retailers and generators. But he also peer-reviewed the 2025 Frontier Economics report on the NZ system, and his verdict on the core question, markets versus political processes for deciding what to build, is blunt: ‘generally markets seem to do better at this than political processes.’”

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