Proposed Code changes to implement a hybrid forecasting arrangement

The Electricity Authority Te Mana Hiko has found that forecasts of intermittent generation are often highly inaccurate and unreliable close to real time. This causes problems for the power system and risks increasing costs for consumers.

To address these problems, we undertook a review of forecasting provisions for intermittent generators.

In July 2024, we decided to put in place a hybrid forecasting arrangement. This will provide a centrally procured forecast of intermittent generation for each generation site. Intermittent generators will be able to submit offers using their own forecast if their forecast is consistently at least as accurate as the centralised forecast.

We are confident a hybrid forecasting arrangement will lead to consistently more accurate intermittent generation forecasts and offers. More accurate forecasts and offers will increase the accuracy of price signals, which contributes to the most efficient and lowest cost sources of generation being dispatched. This is a key initiative to support affordable electricity for consumers.

We are now seeking feedback on proposed changes to the Code that are necessary to give effect to a hybrid forecasting arrangement. The proposed Code amendments will require intermittent generators to change their offer practices to align with what is currently considered good practice – such as revising offers to reflect the latest forecast.

We will also specify some information in guidance, such as the process intermittent generators will be expected to follow to be permitted to base their offers on their own forecast.

We will shortly begin the process of procuring a service provider to provide a centralised forecasting service which we intend to have in place in 2025.

We welcome feedback on the consultation paper by Friday 15 November 2024.

We have also published an article to illustrate the performance of the forecasts of individual wind farms and to educate readers about the importance of more accurate intermittent generation forecasting.

View consultation