Efficient procurement of extended reserves
About this consultation
The Electricity Authority (Authority) is considering options to improve the way in which extended reserves are procured.
The Electricity Industry Participation Code 2010 currently places obligations on participants to automatically disconnect blocks of load at specified frequency and time settings during large under-frequency events. This obligation to provide automatic under-frequency load shedding (AUFLS) rests with distributors and direct connects in the North Island and with Transpower in the South Island. Each block of AUFLS represents a fixed proportion of the participant's load.
Disconnecting a portion of load for one to three hours during a large rare system under-frequency disruption provides protection against a complete electricity system collapse, after which it could take more than a day to restart and fully restore the system. The system operator is currently reviewing the technical requirements for AUFLS and is expected to make recommendations later this year.
In parallel with the system operator's review, the Authority is considering options to improve the way in which AUFLS are procured. The Authority is mindful that the term AUFLS refers to a specific mechanism to provide reserves, just as interruptible load is a particular mechanism to provide instantaneous reserves. The Authority has therefore decided to adopt the term extended reserves to allow for the possibility that mechanisms other than AUFLS could be available in the future to deal with events currently covered by AUFLS.
The Authority considers that procurement of extended reserves could be more efficient, as the current approach imposes mandatory obligations on participants to provide AUFLS.
The Authority's preliminary view is that:
- if a practical tender-based procurement process could be implemented relatively cheaply that would be the preferred option, being the most market oriented option;
- if not, given a preference for small scale trial and error options, the next best option would be to focus on low cost ways to facilitate trading around extended reserves obligations (for example, by developing standard agreements/ protocols and establishing a bulletin board).
The Authority invites submissions on the Authority's preliminary view via the linked Consultation paper by 5pm on Wednesday, 14 November 2012.
The Authority's preference is to receive submissions in electronic format. It is not necessary to send hard copies of submissions to the Authority, unless it is not possible to do so electronically.
If submitters do not wish to send their submissions electronically, they should post one hard copy of their submission to the address below:
Level 7, ASB Bank Tower
2 Hunter Street
P O Box 10041
Tel: (04) 460 8860
Fax: (04) 460 8879
The Authority will acknowledge receipt of all submissions electronically. Please contact the Submissions' Administrator if you do not receive electronic acknowledgement of your submission within two business days.
Where possible, submissions should be provided in the format shown in Appendix A of the consultation paper. Your submission is likely to be made available to the general public on the Authority's website. Submitters should indicate any document attached, in support of the submission, in a covering letter and clearly indicate any information that is provided to the Authority on a confidential basis. However all information provided to the Authority is subject to the Official Information Act 1982.
Efficient-procurement-of-extended-reserves-Consultation.pdf | pdf | 904 KB | Last Changed: 02/10/2012 9:51am
Format-for-submissions.docx | docx | 44 KB | Last Changed: 02/10/2012 9:51am