How will new technology help us to keep the lights on when the wind isn’t blowing and the sun isn’t shining? How do we secure our power supply from future threat of cyber-attacks? How will the huge increase in electric vehicles and smart devices connected to our system impact supply and demand?
These are just some of the questions tackled head on by the Electricity Authority in the draft report, Opportunities and challenges to the future security and resilience of the New Zealand power system and accompanying Authority discussion paper, released today.
It’s critical our electricity system remains secure and resilient as it evolves over the coming decades, so the Authority is keen to ensure all views and perspectives on the opportunities and risks are heard.
The Authority invites stakeholders to participate and share their views on the draft report in one of three online workshops in late November and early December.
Engagement will be completed by the end of December 2021 and will feed into a multi-year action plan. The draft action plan will be published for feedback in the first half of 2022.
Read more about the Authority’s Future Security and Resilience project, including details for registering for the online workshops.
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Extended set of consultation questions for the Wholesale Market Review – information paper
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On 27 October 2021 the Authority released an Information Paper and an Issues Paper as part of the Wholesale Market Review. The Authority is seeking feedback on both papers. The Issues paper focuses on just one key observation highlighted by the review.
In addition, the Authority has published an extended set of consultation questions for the Information Paper. After receiving initial feedback, the Authority considers that providing more specific consultation questions will help stakeholders prepare more targeted responses. The extended questions are on the Wholesale market competition review webpage, where they are published in an updated version of the Information Paper.
The Authority expects to develop additional workstreams following submissions on both papers. Those workstreams need to support the transition to a low carbon future and maintain security of supply, while enhancing competitive tension in the wholesale market to support efficient outcomes.
Consultation has been extended until 5pm Wednesday, 22 December 2021.
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Update on invoicing for December 2019 UTS actions to correct
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The actions to correct are on track for invoices from the clearing manager to be provided to participants by 24 November 2021 for settlement on 20 December.
An audit of the actions to correct process has been commissioned. The auditors (Robinson Bowmaker Paul) have provided their interim audit to the Authority and have not identified any material issues so far, however, timing of invoicing to participants is still subject to finalising this audit.
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Commercial market-making scheme – increase to the Authority’s appropriation
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The Authority consulted with levy payers in June 2021 about changes to the Electricity Industry Levy to support the implementation of a commercial market-making scheme.
The Authority considered submissions from the levy consultation and decided to request an increase to the Authority’s appropriation.
On behalf of the Authority, the Ministry of Business, Innovation and Employment (MBIE), requested an increase from Cabinet to the Authority’s annual appropriation. On 22 September 2021 Cabinet approved an increase in the Authority’s appropriation of $3.6m from April to June 2021, and an ongoing annual increase to the Authority’s appropriation from the financial year 2022/23. The appropriation increase is for a maximum of $14.4m on an annual basis.
The Cabinet paper detailing MBIE’s request has been proactively released by MBIE and is available on MBIE’s website. More detail is available on the Authority’s website.
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Approval of the system operator’s AUFLS technical requirements (ATR) and gazette of the extended reserve code amendment
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Following the system operator’s consultation on the AUFLS Technical Requirements (ATR), the Authority has approved the final version of the ATR. With the approval of the ATR, the Authority can now publish both the ATR as well as the Extended Reserve Code amendment.
The ATR will be incorporated by reference into the Code and will come into force at the same time as the Extended Reserve Code amendment on 21 December 2021.
The decision on the Extended Reserve Code amendment was published on 16 August 2021 (Decision on the Extended Reserve Code amendment — Electricity Authority).
Following publication of the approval decision, a review of the final Code amendment in the approval decision highlighted the use of distributor as a defined term in some clauses of the Code amendment when connected asset owner was the current appropriate Part 8 defined term.
The Authority considers the replacement of distributor with connected asset owner as defined terms in the final Code amendment does not change the policy intent of what was consulted on and considers the change to be technical and non-controversial. For the purposes of Part 8, distributor and connected asset owner have equivalent meaning, and the detail in which we described the responsibilities of both direct consumers and distributors in our consultation made the intent of the Code clear.
The gazetted Code amendment has been updated to include the use of the correct defined term.
The system operator will undertake a baseline analysis of the current 2-block AUFLS scheme using data provided by North Island distributors in early 2022. Once this analysis is complete, distributors will co-ordinate with the system operator to transition their 2-block AUFLS schemes to the 4-block scheme by 30 June 2025.
Current AUFLS exemption holders must work with the system operator to agree suitable AUFLS equivalence arrangements by 30 June 2022.
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Proposed new Transmission Pricing Methodology (TPM)
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Over the last two weeks, the Authority has held eight briefing and technical sessions on the proposed new Transmission Pricing Methodology (TPM). The sessions were well attended and provided useful feedback about the proposed new methodology.
Final submissions on the proposed new TPM close at 5pm on 2 December 2021.
The Authority has received a number of questions on the proposal, and these will be published along with responses on the Authority's website here. With three weeks left until submissions close, the Authority encourages submitters to ask any further questions as soon as possible.
Questions and submissions can be sent by email to tpm@ea.govt.nz.
The Authority intends to publish all submissions received on its website from 3 December 2021. Cross submissions are then due by 23 December 2021.
You can read more about the proposed new TPM here.
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Register now for the Energy Trader Forum on 17 November
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Join your peers for the last Energy Trader Forum of 2021, to be held Wednesday 17 November at Te Wharewaka o Pōneke, Wellington.
Rupert Holbrook – Customer Connections Project Director, Transpower is providing insights into the rapidly changing connection landscape, including considerations for traders.
Gary Holden – Managing Director, Lodestone Energy is speaking about grid-scale solar.
Greg Sise – Managing Director, Energy Link is continuing the conversation on 100% renewables.
Margaret Cooney – Chief Customer Officer, Octopus Energy is delivering a perspective on market entry and effective competition.
There will also be market updates from NZX, Energy Market Services, emsTradepoint, ASX, Electricity Authority and Energy Link.
The forum will run simultaneously as an in-person, socially distanced event, and also online. Now more than ever it is important to keep connected, to learn from and engage with forum members.
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Reminder: Investigation of an alleged breach by Transpower New Zealand Limited as the system operator
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Following initial fact-finding the Authority has opened an investigation into alleged breaches of the Code by Transpower New Zealand Limited as the system operator in relation to its management of the national supply emergency on 9 August 2021.
On 13 August 2021, the system operator provided an interim breach report to the Authority, stating it had potentially breached three clauses in the Code in relation to 9 August 2021, including clause 7.1A(1) of the Code (reasonable and prudent system operator). In the course of the fact finding stage, the Authority has identified additional Code clauses the system operator may have breached.
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 November 2021. The investigator can be contacted, citing the reference ‘System operator investigation – 9 August 2021’ in the subject line, by emailing compliance@ea.govt.nz.
You can find out more about the Authority’s process for dealing with alleged breaches of the Code here.
The Authority has also opened an investigation into Genesis’ conduct on 9 August 2021. That investigation is ongoing.
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Setting the Authority's Compliance Strategy
Ending: 23/11/2021 5pm
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2021/22 and 2022/23 levy-funded appropriations
Ending: 30/11/2021 5pm
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Proposed new Transmission Pricing Methodology
Ending: 2/12/2021 5pm
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Proposed changes to the system operator procurement plan
Ending: 7/12/2021 5pm
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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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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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