✨ Electricity Reserve Energy Policy
3616
NEW ZEALAND GAZETTE, No. 123
30 OCTOBER 2006
network load management10. This will minimise the extent to which incentives
to invest in ordinary generation and demand-side management are affected.
57
Contracts with reserve energy providers should provide for fixed payments for
availability and variable payments when the reserve energy is called upon.
Any spot price revenue received during operations should go to the
Commission and be used for reducing reserve energy and other levies.
58
The Government has built a 155MW power station at Whirinaki for reserve
energy use. Pursuant to the Electricity Act 1992, this power station will be
available to the Electricity Commission by contract for the purpose of reserve
energy.
59
For the avoidance of doubt, the Government does not want the Electricity
Commission to own reserve generation plant.
Trigger mechanism
60
Reserve energy should be offered for dispatch to the system operator at
20c/kWh or the variable payments which have been contracted for, whichever
is the higher.
61
However, if the minimum hydro zone is breached reserve energy may be
offered for dispatch at a lower price to preserve hydro storage. If the minimum
zone is breached and all available thermal generation is not being used to
minimise hydro usage, the Commission should investigate the reasons and
consider what action, if any, would be desirable.
Levy
62
The Commission is expected to recover some of the costs of contracting for
reserve energy from spot market revenues when reserve generation operates.
However, net costs should be recovered initially by way of a levy which is
administratively simple and applies to all consumers based on wholesale
purchases on an equal basis. (The levy should be reviewed as part of the
overall review noted below).
63
Over time, the levy will aim to recover the net costs the Commission incurs for
reserve energy (that is, operating and capital payments less any revenue
received from the sale of reserve energy).
Regulations
64
deleted
Review
65
The Electricity Commission should contract an independent third party to
review the efficiency and effectiveness of the reserve energy policy in meeting
security of supply objectives while minimising distortions to investment
10 To ensure this exemption does not undermine the objective of a tight ring-fence, the Commission
should define operating parameters carefully, including considering a cap on the MW capacity of the
plant and on the number of hours a year the plant may operate for network management purposes.
Next Page →
Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 123
Gazette.govt.nz —
NZ Gazette 2006, No 123
✨ LLM interpretation of page content
🏛️
Security of Supply Objectives for the Electricity Commission
(continued from previous page)
🏛️ Governance & Central AdministrationElectricity, Security of Supply, Reserve Energy, Hydro Management, Dry Year Risks, Policy Development, Operational Standards, Minimum Hydro Zone, Conservation Campaign, Consultation Processes, Transparency, Stability, Market Interventions, Reserve Energy Contracts