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Annual Security Assessment Archive
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.
The Board reached these decisions after considering the Annual Security and Reserve Energy Needs Assessment October 2007 [819 KB] , 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:
- trends in consumer demand, both in aggregate and with respect to different rates of demand growth in the North and South Islands;
- the availability of fuel stocks and thermal plant availability to offset possible reductions in hydro generation in a dry year; and
- 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.
Security (reserve energy) assessment 2007 – 2010: request for information
The Electricity Commission (Commission) is required to undertake regular reviews of the capability of New Zealand’s electricity system to meet anticipated electricity demand. The objective of this assessment and the approach that the Commission will use is set out in its Initial Security of Supply Policy and Explanatory Paper pdf
[243 KB].
Eventually the Commission will undertake such security assessments for up to 10 years. At this stage the Commission wants to review its decision on the need for reserve energy (in addition to the 155MW generating facility at Whirinaki) for 2007 and assess the needs for 2008 to 2010 inclusive.
Given the inter-temporal nature of inflows, to assess the need for 2010 indicative information is also required for 2011.
To undertake this assessment the Commission needs to forecast the demand for electricity and gather information on new and existing generation and transmission.
The Commission will write seeking information from existing market participants who own generating facilities.
The Commission also seeks information from those who are not existing market participants and are likely to commission new generating capacity, in excess of 5MW, during the period January 2007 to December 2011.
The information sought is set out in the generator information spread sheet.
The primary requirement for this information is to undertake the needs analysis for reserve energy. The Commission is also required to undertake other studies that require the same or similar information to fulfil its duties. If you only want to make information available for the reserve energy needs analysis could you please indicate the information that has been provided for this purpose only.
While the Commission prefers transparency of information, the Commission also understands and respects that some of the information sought may be commercially sensitive. Could you please indicate which, if any, of the information you want the Commission to keep confidential. If you require the Commission to enter a confidentiality agreement in respect of any of the information sought please do not hesitate to contact me in the first instance.
If you would like further information about this request please contact Gari Bickers by email, gari.bickers@electricitycommission.govt.nz or phone 04 460 8846.
Security (reserve energy) assessment 2006 – 2009: request for information
The Electricity Commission (Commission) is required to undertake regular reviews of the capability of New Zealand’s electricity system to meet anticipate electricity demand. The objective of this assessment and the approach that the Commission will use is set out in its Initial Security of Supply Policy and Explanatory Paper.
Eventually the Commission will undertake such security assessments for up to 10 years. At this stage the Commission wants to review its decision on the need for reserve energy (in addition to the 155MW generating facility at Whirinaki) for 2006 and assess the needs for 2007 to 2009 inclusive.
Given the inter-temporal nature of inflows, to assess the need for 2009 indicative information is also required for 2010.
To undertake this assessment the Commission needs to forecast the demand for electricity and gather information on new and existing generation and transmission.
The Commission will write seeking information from existing market participants who own generating facilities.
The Commission also seeks information from those who are not existing market participants and are likely to commission new generating capacity, in excess of 5MW, during the period January 2006 to December 2009.
The information sought is set out in the generator information spread sheet. Completed sheets should be emailed to gari.bickers@electricitycommission.govt.nz
The primary requirement for this information is to undertake the needs analysis for reserve energy. The Commission is also required to undertake other studies that require the same or similar information to fulfil its duties. If you only want to make information available for the reserve energy needs analysis could you please indicate the information that has been provided for this purpose only.
While the Commission prefers transparency of information, the Commission also understands and respects that some of the information sought may be commercially sensitive. Could you please indicate which, if any, of the information you want the Commission to keep confidential. If you require the Commission to enter a confidentiality agreement in respect of any of the information sought please do not hesitate to contact me in the first instance.
If you would like further information about this request please contact Gari Bickers by email, gari.bickers@electricitycommission.govt.nz or phone 04 460 8846.
January 2005: Decision on reserve energy for 2006
The Commission has made the decision not to seek additional reserve generation for winter 2006.
The Commission notes the timing and extent of additional generation capacity that will be commissioned, making it very likely that there would be sufficient generation to meet demand in 2006, even in a one-in-60 dry year event. The Whirinaki reserve generation plant and assurance about thermal fuel supply for thermal plants all contribute to this increased security.
The Commission will continue to monitor the situation closely and will work to ensure that thermal generation will run as needed, if 2006 turns out to be dry. It may also tender for demand-side reserve energy, if needed, for 2006 as the situation develops.
At its 9 February 2005 meeting the Board clarified the above resolution by resolving that 'The Commission resolves not to tender for the supply of reserve generation to meet a 1 in 60 dry year event in 2006'. This clarification should not be read in isolation of the more substantive resolution on the need for reserve energy in 2006, in particular that the Commission believes risks to security of supply remain and keeps open the option of tendering for demand side reserves.
- 2005 [PDF, 412KB] and 2006 [PDF, 565 KB] Reserve Energy needs-analyses by Concept Consulting
April 2004: Decision on reserve energy for 2005
In April 2004 the Electricity Commission made the decision not to seek additional reserve generation for winter 2005.
The Commission noted that there has been substantial improvement in the supply situation, making it very likely that there would be sufficient generation to meet demand in 2005, even in a 1 in 60 dry year event. Additional base load generation, the Whirinaki reserve generation plant, and assurance about fuel supply at Huntly and other thermal plants all contribute to this increased security.
The Commission will continue to monitor the situation closely and will work to ensure that thermal generation will run as needed, if 2005 turns out to be dry. It may also tender for demand side reserve energy, if needed, for 2005 as the situation develops.
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