The national grid operator is warning of possible power cuts this winter if supply and demand cannot be managed to cope with extreme conditions.

Transpower's Winter Outlook has highlighted the risks to keeping the lights on if winter is severe because of pressures on ensuring sufficient generation, maintaining the lines network, and managing increasing demand.

Chief executive Alison Andrew told RNZ's Nine to Noon the country is reliant on established resources, but hydro lakes are only at average levels, two large power generators -- a wind farm and a geothermal station -- have had commissioning problems.

"There just isn't enough capacity in the system, and we can also face a dry winter, we don't have enough water which [we] rely on very heavily in our system, and if that's the case we could get into rolling power cuts."

The system will need coal and gas burning thermal stations to provide back up, but they take time to fire up and will result in higher prices, says Andrew.

At the same time, lines companies have to have plans to be able to drop demand, such as turning off water heating, at short notice.

However, the country needs more flexible power generation, which can be turned on at short notice to provide greater security.

"If you've got flexible resources which can be a gas fired peaker ... they're faster start ups and you can make those decisions in real time ... when the wind drops unexpectedly, or there's a failure of an electricity transmission line or generator plant you can respond."

Andrew says Transpower is also spending on upgrading the national grid to remove blockages in the network to get power to where it's needed, however, it expects to have to spend billions in the years ahead on modernising the network.

-RNZ.