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Annual Security Assessment 2008

Consultation period: 3 October 2008 to 31 October 2008 5:00pm

About this consultation

In accordance with the Electricity Act and Government energy policy the Commission is:

• charged with using reasonable endeavours to ensure that the generation and transmission system is capable of maintaining a mean winter energy margin of 17 percent for New Zealand overall, and 30 percent for the South Island;
• not to assume any demand reduction from emergency conservation campaigns; and
• minimise distortions to the normal operation of the electricity market.

While it would be preferable for electricity market participants to achieve the desired security standard through independent market mechanisms, this has not always occurred.

One of the Commission's key responsibilities is to forecast two to three years out to identify any 'shortfalls' in New Zealand's ability to maintain the desired winter energy margins. Where the Commission identifies a shortfall, it is expected by the Government to contract for reserve energy.

The Security of Supply Policy considers the need for additional (in addition to Whirinaki) reserve energy in 2009 and out years.

The methodology used to assess security and the need for additional reserve energy accords with the Commission's revised security of supply policy.

The underlying approach makes an assessment of the technical capability of the generation and transmission system to meet anticipated electricity demand and therefore relies on a number of key inputs which are each discussed in the report. They include:

• forecast demand;
• the availability and capability of the transmission system and generators, especially thermal generation; and
• the availability of fuel for thermal generation.

In line with the Commission's security of supply policy an assessment has also been made of the power system's technical capacity to meet peak demands, i.e. a technical assessment of 'capacity adequacy' in 2009 and out years.

This report will form the substantive base upon which a decision about the need for reserve energy for 2009, 2010 and 2011 will be made.

This page is related to: Security of supply.

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