Conservation and environmental issues are raising their profile with respect to both demand restraint and electricity supply options. In New Zealand, conservation pressures and energy efficiency need to be seen in relation to the supply system currently in place which has capacity for economic supply of electricity in quantities substantially in excess of the current market._x000D_
Consequently, energy efficiency and conservation need to be interpreted in relation to the supply system as well as in relation to end use. The relationship between the environment and conservation is strongest when new generation is required. New Zealand's electricity supply system consists of a large proportion of hydro production and this has significant environmental benefits when considered in relation to concerns of global wanning and the greenhouse effect. However, environmental trade-offs in supply options need to take account of both the efficiency of electricity end use, the trade-off between hydro and thermal generation and the inter-regional effects of shifting development options from one region to another. The Electricity Corporation has a high level of consciousness with respect to environmental and conservation issues and this paper demonstrates its own moves to maximise energy efficiency and illustrate the environmental trade-offs for supply.