Managing frequency in a changing power system

We have been working with the System Operator to investigate how system frequency performance is being maintained as more intermittent generation (such as wind and solar generation) connects to New Zealand’s power system.

System frequency is a key measure of power system stability and is continuously managed to balance electricity supply and demand.

In our 2023 Potential solutions for peak electricity capacity - Issues paper we decided to investigate redefining the existing multiple frequency keeping (MFK) product into a tool to manage five-minute variability.

The System Operator’s report from this investigation concludes that the MFK service in its current form remains suitable for managing intra-dispatch frequency variations in the short term. As a result, we will not progress repurposing the MFK service, but the System Operator may schedule increased quantities of frequency keeping to maintain frequency quality.

We are already responding to several recommendations in the System Operator’s report. We regularly monitor dispatch compliance and the performance of intermittent generator forecasts. We are working to improve wholesale trading arrangements for BESS owners, including participation in MFK, and are considering arrangements for future BESS-hybrid generation stations. In the longer term, we will work with the System Operator to find ways to improve the efficiency of scheduling the MFK service in a changing operational environment and reduce costs for consumers.

Following this investigation, the Authority and the System Operator have begun developing an overarching frequency management strategy. Its objective is to ensure the various mechanisms used to manage frequency continue to provide reliable outcomes at least cost to consumers. It builds on our recent work to improve frequency asset owner performance obligations.

Its scope includes:

• reviewing the interactions between asset owner obligations and the frequency-related ancillary services, and
• identifying potential new ancillary services to provide for emerging system needs.

We are aiming to share the initial findings of our frequency strategy work in an Issues and options paper in early 2027.