Coal-fired electricity generation in New Zealand will end when Huntly power station closes and it's the result of having a world-leading renewable energy industry, the government says.
The Greens say it's the beginning of the end for coal use in New Zealand and the party is calling on other industries to switch to renewable energy sources.
Genesis Energy announced on Thursday the station, once the largest in New Zealand, would close by the end of 2018.
The company says it's been operating at market margins for the last six years and cheaper renewable plants are coming on stream.
Energy Minister Simon Bridges says big advances in renewable energy have reduced the need to keep coal-fired stations open as a backstop for dry years when the hydro lakes are low.
He says geothermal generation has more than doubled over the last 10 years, and it's contributing more electricity than natural gas.
"There's a significant amount of consented geothermal capacity ready and waiting for development," Mr Bridges said.
Green Party co-leader Jamie Shaw says Huntly's closure will mean a significant reduction in New Zealand's carbon emissions.
"If the government's aim is to reduce greenhouse gas emissions by 11 percent on 1990 levels by 2030, this move takes care of more than a fifth of that," he said.
"And that's just one business representing only 40 percent of the country's coal use."
At its peak, Huntly was emitting around 5000 kilotonnes of carbon dioxide a year.
Mr Shaw says last year industries burned 1.1 billion tonnes of coal.
He's calling on companies like Fonterra to follow the lead set by Genesis.
Nearly 80 percent of New Zealand's electricity comes from renewable generation, compared with an OECD average of 22 percent.
The government's goal is 90 percent by 2025.
At its peak, the power station was emitting around 5000 kilotonnes of carbon dioxide a year - close to five percent of total national CO2 emissions.