NZX is the preferred supplier for the extended reserve manager role
The Authority has selected NZX Limited (NZX) as the preferred supplier for the role of extended reserve manager, after a competitive open tender process. The primary function of the role is to develop and run the process to select participants who will provide extended reserve. Last year the Authority introduced new arrangements for managing situations where an unplanned event causes the frequency on New Zealand’s electrical system to fall too far below 50 Hz. The new arrangements, called extended reserve, will more efficiently procure blocks of load to be armed ready for automatic shedding in a low frequency event.
The Authority is seeking to have regulations made so that the extended reserve manager is a new market operation service provider under the Electricity Industry Act 2010.
The extended reserve manager’s first task will be to consult with stakeholders on the selection methodology it believes will best meet the system operator’s technical requirements for extended reserve.
The Authority wants the liability limits of the extended reserve manager to be specified in the Electricity Industry (Enforcement) Regulations 2010, as is the case for other market operation service providers. In November and December 2014, the Authority consulted on the proposed level of liability limits and, after considering submissions, will seek liability limits of $550,000 per event and per annum.
The Authority has granted and gazetted five new exemptions, which are listed below. The full Gazette notices, including the Authority’s reasons for approving each exemption, are on the Authority’s website.
The Authority has granted Contact Energy Limited two exemptions (No. 216 and No. 223) from compliance with clause 10.24(c) of the Code.
The Authority has granted Alpine Energy Limited an exemption (No. 217) from compliance with clause 4(2)(a) of Schedule 10.7 of the Code.
The Authority has granted Advanced Metering Services Limited an exemption (No. 224) from compliance with clause 4(2)(a) of Schedule 10.7 of the Code.
The Authority has granted Auckland International Airport Limited an exemption (No. 226) from compliance with clause 10.25(1)(b) of the Code.
The exemptions came into force on 13 March 2015 and can be found on the Authority’s website.
Wholesale Advisory Group: Review of the instantaneous reserve markets
The Wholesale Advisory Group’s recommendations paper on a review of the instantaneous reserve markets is on the Authority’s website.
The Wholesale Advisory Group recommends that investigations into revising instantaneous reserve procurement arrangements continue to determine the most appropriate approach to realise long-term benefits to consumers. However, it strongly recommends that changes to fast and sustained instantaneous reserve are considered together. It also recommends reviewing the objective in the Electricity Industry Participation Code 2010 for procuring instantaneous reserve.
Code Amendment: Electricity Industry Participation (Settlement and Prudential Security) Code Amendment 2013
The Electricity Industry Participation (Settlement and Prudential Security) Code Amendment 2013 comes into force on 24 March 2015.
It amends Parts 1, 8, 13, 14, 15, and 17, and adds a new Part 14A to the Code.
The amendment changes the prudential security requirements for participants, and changes the clearing manager’s clearing and settlement processes.
The purpose of the amendment is to:
improve retail competition and reduce costs for retailers
reduce costs for direct purchasers
better protect the market from credit risk.
The new settlement and prudential security arrangements are a key pro-competition initiative for the retail electricity market as they will enable retailers and industrials to make more efficient use of their working capital. They will also provide generators with an enhanced level of confidence that they will receive payments due to them.
Please note that updated versions will be available from 24 March 2015
Code Amendment: Electricity Industry Participation Code Amendment (Extended Reserve) 2014
The Electricity Industry Participation Code Amendment (Extended Reserve) 2014 came into force on 7 August 2014, with the exception of some amendments that will come into force on 24 March 2015.
This amendment changes the way that large blocks of electrical load respond to extreme under-frequency events on the grid (currently known as automatic under-frequency load shedding (AUFLS)). The provisions relating to payments (in Parts 8, 14 and 14A) were deferred to 24 March 2015 to align with the date when new Parts 14 and 14A will take effect.
Please note that updated versions will be available from 24 March 2015
Code Amendment: Electricity Industry Participation Code Amendment (Settlement and Prudential Security) 2014
The Electricity Industry Participation Code Amendment (Settlement and Prudential Security) 2014 comes into force on 24 March 2015. It amends Parts 11, 14, 14A, and 17 of the Code.
The amendment clarifies how the new Parts will operate, and what participants will need to do to prepare for transition.
Please note that updated versions will be available from 24 March 2015
Code Amendment: Electricity Industry Participation Code Amendment (Late and Revised Data) 2015
The Electricity Industry Participation Code Amendment (Late and Revised Data) 2015 comes into force on 24 March 2015. It amends Parts 14 and 15 of the Code.
This amendment makes further revisions to new Parts 14 and 14A, carries over changes to those Parts made by other Code amendments and makes minor improvements to those changes to better incorporate them into new Parts 14 and 14A.
Please note that updated versions will be available from 24 March 2015
Information plays an important part in building market confidence and strength.
To assist interested parties in tracking market development, the Authority publishes NZ electricity hedge contracts as a standard section of its weekly Market Brief.
