New Zealand Gazette – 2008 – No. 92

Page 2481

✨ Electricity Security Policy



4 JUNE 2008 NEW ZEALAND GAZETTE, No. 92 2481

Hydro storage guidelines

To help ensure security of supply, the Commission should develop and publish a set of hydro storage guidelines providing its estimate of the hydro storage levels that reflect different levels of shortage risk. These guidelines should take into account the expected availability and use of thermal generation, transmission constraints and other factors that may impact upon security of supply.

As part of the hydro storage guidelines, the Commission should have an emergency storage guideline that would trigger a range of emergency response measures, including a conservation campaign. The emergency storage guideline should be set on the basis that there is a significant probability that emergency blackouts may be required if other emergency response measures are not put in place.

Reserve energy

If the New Zealand or South Island mean year energy margin is unlikely to be met by market participants, the Commission should contract for, but not own, reserve energy (generation and contracted demand response) to maintain the desired energy margin. This is to be the Commission’s primary means of meeting its security of supply objective.

Any reserve energy procured to ensure security of supply should also be available to help cope with other unexpected supply contingencies, such as serious grid, plant or fuel supply disruptions.

In contracting for reserve energy the Commission should seek to:

  • minimise the risk that reserve energy affects the incentives for market participants to:
    • respond to higher prices
    • construct new capacity
    • enter into hedge and other contracts
    • invest in demand-side management
  • maximise static and dynamic efficiency.

Contracted demand response should form part of the Commission’s portfolio of reserve energy, provided this is practicable and the Commission is confident that the reduction in demand is additional to normal demand-side responses to higher prices.

Reserve energy should be offered to the system operator for dispatch at 20c/kWh or the contracted variable payment rate, whichever is the higher.

The Commission should determine, for each contracted form of reserve energy, a storage guideline level at which it would expect reserve energy to be operating. If storage falls below a particular storage guideline level, and the relevant reserve energy is not being dispatched, the Commission may choose to offer that reserve energy for dispatch at a lower price in order to preserve hydro storage and to reduce shortage risks.



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2008, No 92


Gazette.govt.nz — PDF NZ Gazette 2008, No 92




✨ LLM interpretation of page content

🏭 Security of electricity supply policy (continued from previous page)

🏭 Trade, Customs & Industry
Electricity, security of supply, policy, capacity adequacy, demand management, contingencies, forecasting, monitoring

🏭 Hydro storage guidelines for security of supply

🏭 Trade, Customs & Industry
Hydro storage, guidelines, security of supply, emergency storage, thermal generation, transmission constraints

🏭 Reserve energy procurement and management

🏭 Trade, Customs & Industry
Reserve energy, procurement, demand response, system operator, energy margin, storage guidelines