New consultation: ensuring an orderly thermal transition

We’re seeking your feedback on a consultation paper that looks into the potential risks surrounding thermal generation retirement in Aotearoa.

New Zealand is transitioning to an electrified economy with an increased dependence on renewable energy. Thermal generation is on the decline, however it still plays an important role within our power system by providing back-up energy resource.

Based on our analysis and modelling by Concept Consulting, the Electricity Authority has determined the risk surrounding retirement of thermal generation in New Zealand to be low and an orderly thermal transition to be likely.

The modelling was based on several important assumptions that are likely (but not certain) to apply – such as the smelter at Tiwai remining in New Zealand, and no significant deterioration in the availability of gas.

Several options are presented in the paper in case there is an increase in thermal transition risk, and some of these options are already being explored through other programmes of work.

We’re conducting this consultation to help understand what regulatory settings are needed to support an efficient transition to a renewables-based system, while safeguarding back-up resources, so the lights stay on.

Our consultation paper outlines our understanding of thermal transition risks, supported by quantitative analysis from Concept Consulting. It explores the key issues, underlying causes, and potential options to address these – and we’re keen to hear your feedback.

The Ministry of Business, Innovation, and Employment (MBIE) is also investigating what additional electricity market measures could support affordable and reliable electricity supply while accelerating Aotearoa’s transition to a renewable system. Our consultation supports MBIE’s work and adds to the overall evidence base.

We encourage interested parties to read our consultation paper and provide feedback on the questions in Appendix A. We welcome submissions by 5pm on Tuesday 25 July 2023. We are available to meet with interested parties, contact fsr@ea.govt.nz to arrange.

View project: Future security and resilience