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Winter energy and capacity security of supply standards

Consultation period: 10 July 2012 to 7 August 2012 4:00pm

About this consultation

The capacity and energy security of supply standards, and the corresponding winter capacity margin (WCM), North Island winter energy margin (NI-WEM) and South Island winter energy margin (SI-WEM) metrics, are key parts of the system operator's medium-term security monitoring framework.

The standards are set out in the Electricity Industry Participation Code 2010 (Code). The way in which the metrics are calculated is set out in the system operator's Security of Supply Forecasting and Information Policy (SOSFIP). The SOSFIP is a document which is incorporated by reference into the Code.

The Authority has reviewed these standards, and proposes to:

• amend Part 7 of the Code to change the security of supply standards; and
• submit to the system operator, a proposal for a variation to the SOSFIP to change the calculation of the WCM, NZ-WEM and SI-WEM security metrics.

Background

The function of the WCM, NZ-WEM and SI-WEM standards is to serve as points of reference in determining how likely it is that there will be efficient levels of generation and inter-island transmission available to meet demand in the next 5-10 years.

The capacity security of supply standard is used in the process of assessing whether there will be an efficient level of peaking generation and north transmission capacity to meet peak demand.

The energy security of supply standards are used in the process of assessing whether there will be an efficient level of reserve generation and south transmission capacity to manage extended dry sequences.

These security of supply standards and metrics are intended to assess physical capacity, which may be different from the capacity that the market will deliver in practice. Market dynamics are difficult to predict over multiple years, and are best assessed on shorter timeframes.

The security of supply standards were designed to be robust over time. However, they can still shift as various aspects of the power system change (including generation mix, transmission configuration, shortage costs, etc). It was originally envisaged that the security of supply standards would be reviewed roughly every five years. It is the Authority's role to review the standards because they are set out in the Code.

The Authority has reviewed the security of supply standards, taking into account various factors including the imminent availability of Pole 3 and changes to the generation mix, and seeks feedback on the proposed changes to the standards.

Submissions

The Authority's preference is to receive submissions in electronic format (Microsoft Word). It is not necessary to send hard copies of submissions to the Authority, unless it is not possible to do so electronically.

Submissions in electronic form should be emailed to submissions@ea.govt.nz with “Consultation Paper - Winter Energy and Capacity Security of Supply Standards” in the subject line.

If submitters do not wish to send their submission electronically, they should post one hard copy of their submission to either of the addresses provided below.

Submissions
Electricity Authority
PO Box 10041
Wellington 6143

or

Submissions
Electricity Authority
Level 7, ASB Bank Tower
2 Hunter Street
Wellington

Tel: 04 460 8860
Fax: 04 460 8879

Submissions should be received by 4:00 pm on 7 August 2012. Please note that late submissions are unlikely to be considered.

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.

Your submission is likely to be made available to the general public on the Authority's website. Submitters should indicate any documents 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.

The table of questions from Appendix A of the consultation paper appears separately as a suggested template for your submission.

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