Power price hikes tipped to ease

A long-term forecast looking at New Zealand's energy is tipping the price of electricity to continue to increase faster than the rate of inflation.

The projections will see the wholesale price of electricity track around 1 per cent above inflation for the next 18 years to help fund new electricity generation.

The scenario in the Ministry of Economic Development's report will see prices rise less than they have in the last decade when they averaged 2.5 times the rate of inflation.

Other forecasts in the report include:

- By 2030 about half of our energy supply will come from renewable sources;

- Demand for electricity will increase by more than 25 per cent by 2030;

- NZ's energy intensity, the measure of energy used per unit of GDP, will reduce by 21 per cent by 2030;

- Electric vehicles and biofuels will make up less than 2 per cent of transport energy demand in 2030.