The Electricity Commission Board has reviewed its earlier decision on need the for reserve energy, in addition to the generation capacity at Whirinaki (155MW), in 2008 and considered the need for additional reserve energy in 2009.

The Board confirms its earlier decision not to procure additional reserve energy for 2008.

The Board has also concluded that there is no need to procure additional reserve energy for 2009.

, prepared by Concept Consulting, the submissions from interested parties, the advice of its own staff, and its obligations to ensure that electricity is delivered in an efficient, fair, reliable and environmentally sustainable manner to all classes of consumer. In reaching these decisions the Board also noted security of electricity supply is sensitive to:

1. trends in consumer demand, both in aggregate and with respect to different rates of demand growth in the North and South Islands;
2. the availability of fuel stocks and thermal plant availability to offset possible reductions in hydro generation in a dry year; and
3. the timing and extent of additional generation capacity being commissioned.

The Board also remains mindful that the Government Policy Statement on Electricity Governance (GPS) imposes an obligation on the Commission to use reasonable endeavours to secure security of supply in a 1-in-60 dry year without assuming any reduction in demand from emergency conservation campaigns, while minimising distortions to the normal operation of the market.

The conclusion on need for additional reserve energy has been reached on the information and advice referred above. Market participant plans change. Unplanned events occur and forecasts may not prove accurate. The Board therefore recognises that risks to security of supply remain, and that a comprehensive programme to monitor and mitigate these risks will remain in place.

If circumstances alter (eg the availability of thermal fuel or the availability of thermal plant) to the extent that the Commission no longer considers that the 1-in-60 dry year security of supply standard can be attained it will review its decision not to procure additional reserve energy. For the avoidance of doubt this does not mean that the Commission will procure additional reserve energy in the event of a dry year unless it believes the market’s ability to attain the 1-in-60 dry year security of supply standard is threatened.

Archives