The strategy released on Thursday reaffirms the Government's faith in the ability of renewable generation to meet 90 percent of the country's energy needs by 2025.

And the Government will be instructing state owned electricity generators not to build new fossil fuel powered generation for a decade, except for emergency backup.

The head of the Major Electricity Users Group, Ralph Matthes, told Radio New Zealand that no other developed country has banned thermal power stations because they want a reliable electricity supply.

He says the Government should let the market decide if building a new power station is worth the cost through its emissions trading scheme.

"You really let the market decide - people who want to invest in new thermal power stations - is it worth the cost of adding in the cost of carbon? That's really for the market to decide.

"That's the way it should work. Not a belts and braces approach whereby if the government doesn't like what the market is arriving at it decides to legislate to ban thermal. It's pretty interventionist," he said.

Mr Matthes says if you ban thermal power stations it means more reliance on wind and hydro electricity generation, which can both be unreliable.

Energy industry consultant, Brian Lealand, told Radio New Zealand the policy was "crazy intervention."

He says the push for electric cars and electricity efficiency will see electricity demand rise by up to 4,000 MW and push household electricity prices up by $500 per year.

However Energy Minister, David Parker, has rejected suggestions that the energy strategy will endanger security of supply.

"The very principle that is articulated in the strategy is that there should be no more fossil fuel thermal - except to the extent necessary for security of supply, he told Radio New Zealand.

Mr Parker says Norway and Iceland are both at 100 percent of renewable energy and New Zealand is already in the position of being third at 70 percent and it can do better.

He confirmed the energy strategy has put an end to Genesis Energy's plans to build a $500 million 360 MW gas turbine plant in Rodney to meet Auckland's growing energy demands.

That power plant would have produced enough electricity for 360,000 houses, and Mr Parker says geothermal and wind power will replace it.

"There's plans for 300 MW of geothermal on the books already and a bit more will come forward as a consequence of this and there's plans for close to 1000 MW of wind in different parts of the country at the moment," he said.

Mr Parker says he has no doubt there are affordable renewable energy sources available.