Changes to improve intermittent generation forecasts

The Electricity Authority Te Mana Hiko is bringing in changes to improve the accuracy of intermittent generation forecasts.

We will implement a hybrid forecasting arrangement after consulting on potential solutions to improve the accuracy of intermittent generation forecasts and offers.

This initiative is a key building block to improve the reliability, efficiency and affordability of the electricity system, which supports our statutory objective. It is also intended to support competition and innovation by reducing barriers to entry for new developers.

The arrangement relies on a centralised forecast with the option for self-forecasting if it is at least as accurate as the centralised forecast.

To give effect to the hybrid arrangement, we have decided to implement several key policy design measures. These changes aim to ensure intermittent generators’ offers are as accurate as possible during all trading periods.

The review was prompted by concerns that inaccurate intermittent generation forecasts and offers affects other participants’ ability to make informed consumption and generation decisions in response to forecast price schedules.

A procurement process will be undertaken to select a service provider to provide a centralised forecasting service and we intend to have the new arrangements in place by winter 2025.

We would like to thank those who provided feedback on our issues and options paper.

This decision paper presents the key findings and decisions from our review.

Guidance – how intermittent generators should interpret resource persistence forecasting requirements

The Electricity Industry Participation Code 2010 outlines the requirements for when intermittent generators must revise offers and what these offers must be based on.

Our monitoring of resource persistence forecasting and conversations with intermittent generators has shown that some may be misinterpreting the current requirements.

The provisions in the Code relating to resource persistence forecasting will be amended to give effect to a new forecasting arrangement. In the meantime, it is important that intermittent generators are correctly interpreting and giving effect to these provisions. Inaccurate intermittent generation forecasts can pose risks to security of supply, resource efficiency, and decision-making for other participants. In turn, this leads to higher electricity costs for consumers.

We have published guidance to provide clarity to intermittent generators on how the provisions in the Code relating to resource persistence forecasting should be interpreted.

Analysis of the main wind generators’ forecast performance

To support the development of forecast performance standards we are analysing forecast performance for the five main wind generators over a 24-month period.

Covering the period between 1 January 2021 and 10 October 2023, the analysis will determine:

a) what forecast accuracy is possible based on the most accurate forecasts 2, 6 and 12 hours before real time

b) how frequently forecast inaccuracies occurred (using different thresholds)

c) how much of the impact of reducing forecast inaccuracies occurred during trading periods with low residuals, to inform whether we could restrict accuracy standards (or have stricter accuracy standards) during those trading periods only.

We will publish our full analysis on our website in early August.

Publishing performance data of intermittent generators’ forecast vs actual generation

We will shortly begin publishing forecast accuracy for each wind generator and generation site across different timeframes (on a monthly scale). This will improve transparency of the difference between forecasts of generation potential and actual generation.