Energy and Resources Minister Simon Bridges told an audience at a bioenergy conference in Rotorua the government needs a mixed but balanced approach to its energy future.
New Zealand aims to generate 90 percent of its electricity from renewable energy resources by 2025, and Bridges said one of the main sources of heat energy comes from wood.
By using wood instead of fossil fuels, the government estimates it will save 8,000 tons of carbon dioxide annually, the equivalent of pulling about 2,500 cars off New Zealand roads each year.
"New Zealand has good supplies of waste wood that can be used for renewable heat," the minister said.
The government will support an effort for wood's use as a heating source with $1.3 million over the next three years.