What's in a transmission agreement?
Transmission agreements contain interconnection rules, the connection code and outage protocol. They must also be consistent with the grid reliability standards.
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Interconnection rules are set out in the Code as interconnection asset services. They enable the operation of the grid by the high-voltage alternating current transmission system that transports electricity around Aotearoa.
Interconnection generally refers to the main grid network, except those parts of the grid specifically required for the connection of a transmission customer.
Interconnection rules are designed to:
- create incentives on Transpower, through enforceable service measures, to provide interconnection assets at the capacity ratings required by designated transmission customers and other grid users
- ensure that Transpower provides information on the capacity of interconnection assets, and their reliability and availability, to enable grid users to monitor the capacity and performance of interconnection assets
- establish processes for the identification of reliability investments and economic investments, and alternatives to such investments, to ensure efficient decision-making on the use of and upgrades to the grid
- specify the circumstances in which Transpower may permanently remove interconnection assets from service or reconfigure the grid.
The framework for the regulation of interconnection asset services and grid configuration is set out in the Code (see sub-part 6 of Part 12 of the Code).
The connection code sets out the technical requirements and standards for Transpower and for designated transmission customers to connect to the grid.
The connection code is prepared by Transpower and approved by the Electricity Authority.
The outage protocol specifies when Transpower may temporarily remove or reduce the capacity of grid assets from service, which are otherwise required to be provided under the transmission agreement and interconnection rules.
The outage protocol has procedures and policies for Transpower to plan for, carry out and manage planned and unplanned outages on the grid.
An outage plan prepared under an outage protocol must include all reasonably foreseeable connection and interconnection asset outages in the outage plan year.
Grid reliability standards
Transmission agreements must be consistent with the grid reliability standards. These are a set of standards against which the reliability performance of the existing grid (or future developments to it) can be assessed.
The grid reliability standards are determined using economic considerations. This includes taking into account the cost to consumers of losses of supply, while meeting technical and safety requirements.
The Code (clauses 12.55 to 12.62) contains principles for the development and requirements for grid reliability standards. They include a:
- economic (probabilistic) standard for the whole grid, and the associated assessment of the costs and benefits of investment for reliability
- 'safety net' minimum reliability standard of N-1 for contingencies on the core grid. N-1 means that the system is planned so that, with all transmission facilities in service, the system is in a secure state, and for any one credible contingency event, the system moves to a satisfactory state. However, if more than one contingency event was to occur, load may have to be shed to return to a satisfactory state.
Transpower is required to start upgrading its assets or amending the transmission agreement or service levels in the interconnection rules, when it reasonably expects that the existing connection or interconnection assets are unlikely to meet the grid reliability standards at the relevant grid exit point over the next five years.