Energy Minister Pete Hodgson has opened the government's new diesel-fired 155 megawatt power station at Whirinaki north of Napier.
Construction of the $150 million station, which will only be turned on when there's a risk of power shortages, began last October.
Hodgson says New Zealand needs an electricity system which can better cope with extremes of climate, and the plant is effectively an insurance policy during very dry periods.
Contact Energy, which owns the Whirinaki site and has built the power station, will be able to run it remotely from its Otahuhu power station in Auckland.
Waitaki legislation to proceed
The government says legislation for allocating water from the Waitaki River will go ahead even though Project Aqua - which proposed to take most of the river's water - is not.
But the Environment Minister Marian Hobbs says the bill will be amended because a panel of commissioners to decide on consent applications is no longer required. She says this is because the withdrawal of Project Aqua means there are no longer several local authorities considering applications for the same proposal.
But Hobbs says there are still substantial demands for water in the Waitaki catchment and a board will still be set up to decide on a water allocation framework.
She says there will be an opportunity for public submissions and hearings.