The use of gas from coalfields to commercially produce power is a step closer, after a successful pilot project in Waikato.
Solid Energy is holding trials with a coal seam gas-powered generator on farmland near Huntly.
The State owned enterprise believes coal seam gas could potentially provide between 5% to 10% of New Zealand's gas production.
However, it is not known how much coal seam gas can be extracted and whether it will be economic to do so.
Solid Energy says work is continuing into the long term commercial viability of coal seam gas.
It says coal fields in Taranaki, Southland and the West Coast also have potential for coal gas production.