Audit Portal and Compliance Database offline until further notice
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Due to a potential security vulnerability, the Audit Portal and Compliance Database are currently offline. We are seeking to resolve this issue as soon as possible.
Participants are asked to wait for further information before sending audits to the Authority.
Breaches of the Code which are normally reported to the Authority through the Compliance Database, are requested to be sent by email. Please complete the notification of breach form located on our website, and email it to our compliance team compliance@ea.govt.nz.
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Our role in the energy transition
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The Authority is working in partnership with the wider electricity sector to navigate and direct a pathway through our transition to low-emissions energy. We are focused on making sure we can make the transition without compromising our future security and resilience.
We are working hard to understand the required evolution of the rules and regulations that enable the efficient operation of the electricity market, in the face of challenges to our transition. We've recently published more about our role in the energy transition including our road map of key projects powering the transformation.
No one can say what the future holds, however we know that the transformation will be spearheaded by decarbonisation across the power system and the wider economy. A move to decentralised resources and an increased use of smart technology will also be key.
Our aim is to maximise the benefits to New Zealand consumers, leading to lower electricity prices and a secure and resilient electricity system for generations to come.
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MDAG discussion paper publication: 100 percent renewables
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Increasing renewable generation, such as wind and solar, and reducing our reliance on fossil-fuelled generation may mean changes to how New Zealand’s wholesale market operates.
A critical project on the Authority’s Energy Transition Roadmap is to understand how the wholesale electricity market will operate under a 100% renewable system, and whether any changes may be needed.
Following extensive consultations with stakeholders over the last four months, the Market Development Advisory Group (MDAG) is in the final stages of development of its discussion paper on wholesale market operation under a 100% renewable electricity system.
MDAG's scope includes efficient dispatch, management of stored water, demand-side response, the contracts market, new investment, and retirement.
A discussion paper will be released early in 2022 and will be followed by a series of engagement workshops to hear feedback and views from stakeholders, continuing the highly interactive and open approach followed by the group to date on this project. You can find out more about MDAG’s 100% renewables project on the Authority’s website.
The government has a target to operate a 100% renewable electricity system by 2030. The transition to low-emissions energy will be a critical part of meeting New Zealand’s overall goal of net zero emissions by 2050.
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Battery energy storage systems one step closer to the green light
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Consultation on the system operator’s proposed replacement ancillary services procurement plan has ended.
Several improvements to the ancillary services plan were proposed, including to enable battery energy storage systems (battery ESS) to offer instantaneous reserve.
This change will pave the way for batteries to offer instantaneous reserve to the system operator in more operating modes, leveraging their unique capabilities to act as both a load and as generation and to switch modes very quickly. This will be critical in supporting New Zealand’s transition towards a future low- emissions energy system.
The changes also align the procurement plan with the Authority’s draft decision to amend the Code to enable a more diverse range of resources to be offered up as ancillary services.
The two submissions received on the Consultation on proposed changes to the system operator procurement plan have been published on our website.
The ancillary services procurement plan sets out, for each ancillary service, the principles and process that the system operator will apply and follow in assessing the quantity the system operator is required to purchase.
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Update to guidelines on wholesale market information disclosure obligations
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The Authority has updated the guidelines for participants on wholesale market information disclosure obligations. This follows the permanent amendment to the definition of disclosure information in the Electricity Industry Participation Code 2010.
The Authority has also updated the guidelines to clarify the Authority’s obligations in respect of confidential information provided in quarterly disclosure reports (see paragraphs 12.11 – 12.13 of the guidelines).
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Authority to release preliminary decision on alleged 9 August UTS
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On 16 December 2021, the Authority will release its preliminary decision in response to the undesirable trading situation (UTS) claim made by Haast Energy Trading Limited and Electric Kiwi Limited (Electric Kiwi), and later joined by Flick Energy Limited (Flick Electric) and Switch Utilities Ltd (Vocus New Zealand).
The Authority received the claim on 12 August 2021 alleging a UTS had occurred on 9 August 2021. You can read the claim on our website.
The Authority will consult on the preliminary decision for a seven-week period.
The Authority had intended to consult for a short period but has added additional time to accommodate the holiday period.
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2021 Dry Year event review
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In the interests of continuous improvement, the Authority has commissioned an independent review of the system operator and Authority’s performance during the 2021 dry year event. The Authority is now consulting to obtain the wider industry and other interested stakeholder’s views on the report and its findings.
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Internal transfer pricing benchmark tool
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The Authority has developed a tool allowing users to compare the internal transfer prices (ITPs) of the large integrated generator retailers to a series of benchmarks.
The benchmark tool helps interpret the ITP information of the five largest generator retailers from 2017/2018 to 2020/2021 and the methodologies used to derive this information.
The tool is available on the Authority’s interactive dashboards webpage.
Going forward, this tool will be supported by data from new provisions in the Code mandating the annual disclosure of mass market ITPs by integrated generator retailers, the methodology used to derive them and the disclosure of retail gross margin reports by certain retailers. More information is available on the Authority’s website.
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Compliance investigations commenced and open for participants to join
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The Authority has commenced investigations into the following participants concerning alleged breaches of Schedule 12A.4 relating to Default Distributor Agreements (DDA):
- Vector Limited
- Powerco Limited
- Aurora Energy Limited
Any participant that considers it is affected by the matter being investigated, and that wishes to become a party to this investigation, should notify the investigator by 5pm, 23 December 2021.
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9 August 2021 – closure of case alleged against Contact Energy Limited
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On the evening of Monday 9 August 2021, a significant weather event caused the system operator to declare a grid emergency due to record national demand and a shortage of generation. Contact’s Taranaki Combined Cycle (TCC) unit was offline during the event.
Multiple participants alleged Contact Energy Limited (Contact) breached clause 13.5A (trading conduct rule) by failing to offer generation from its 377 MW Taranaki Combined Cycle unit during trading periods 37 – 42 on 9 August 2021.
The Authority’s Compliance Committee has approved a recommendation to decline to take further action on the alleged breach, on the basis that the evidence did not establish a breach of clause 13.5A (Regulation 11(1)(b) of the Electricity Industry (Enforcement) Regulations 2010).
TCC requires between 36 – 72 hours to start up from cold. To be operational for the evening peak on 9 August, Contact would have needed to turn the unit on before 10:00 pm on Saturday 7 August. At this time the information available in the market would not have enabled a rational generator to predict the unusual tightening of supply and demand which occurred at the evening peak of 9 August. Accordingly, there is no evidence to suggest that Contact’s conduct was inconsistent with the way that a rational generator would act in a competitive market. As a result, the Compliance Committee did not appoint an investigator in respect of this matter.
The Authority normally only publishes the outcome of cases that reach the investigation stage. However due to high public interest and because the allegation was made public, the Authority has decided, and Contact Energy agreed, to publish the decision in this case.
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We have discontinued an investigation into a self-reported breach by Transpower New Zealand Limited concerning the operation of the grid owner’s protection system at its Wairakei substation. The event caused a total loss of supply to Taupo on 19 November 2018.
Notice of our decision and reasons is available on the Authority’s website.
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Independent assurance review – 2019 UTS actions to correct re-settlement
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The Authority commissioned an independent assurance review of the re-settlement process for the 2019 UTS actions to correct.
The review has now been completed by Robinson Bowmaker Paul. The independent assurance report is available on the Authority’s website.
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Reminder – Wholesale electricity market competition review consultation closes 22 December
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The consultation period for the wholesale market competition review concludes at 5pm on Wednesday 22 December.
The Electricity Authority has continued to proactively publish more information on its website to assist submitters, including updated Q&A and an Excel spreadsheet that replicates Annex 1 of the Munro-Duignan 'Review Letter for Discussion Paper'. The Annex cross-checks calculations from the Discussion Paper estimating the potential efficiency costs of the Tiwai contracts.
To talk to the project team email reviewconsultation2021@ea.govt.nz
Read more on the Authority's website.
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Opportunities and challenges to the future security and resilience of the New Zealand power system
Ending: 14/12/2021 5pm
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Review of competition in the wholesale market from January 2019 until early 2021 and an issues paper on inefficient price discrimination
Ending: 22/12/2021 5pm
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Cross-submissions on Transmission Pricing Methodology (TPM) proposal now invited
Ending: 23/12/2021 5pm
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2021 dry-year event review
Ending: 25/1/2022 5pm
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Level 7, Harbour Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand
Tel: + 64 4 460 8860 Email: communications@ea.govt.nz
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