Policy changes to strengthen dry year risk management

The Electricity Authority Te Mana Hiko has approved changes to the Security of Supply Forecasting and Information Policy (SOSFIP) to improve certainty and better support market participants to ensure security of supply.

The changes include an update to the triggers for the access to contingent storage and were consulted on by the System Operator before it referred the proposed changes for Authority approval.

“The changes will be in place before this winter and will materially improve the contingent storage release boundary buffer. We believe it will address many of the concerns about accessing that storage that were highlighted during the 2024 dry sequence,” says Hayden Glass, General Manager, Wholesale and Supply.

How the Alert Contingent Storage Release Boundary buffer is calculated will change to better reflect the low-range operating characteristics of key hydro catchments to address any resource consent restrictions that could prevent the triggering of hydro storage when required. In practice, this means that the buffer is larger overall, and much larger in winter months than in summer months.

“The SOSFIP does not determine the volumes of contingent storage available - this is set in the resource consents for Lakes Pūkaki, Tekapo and Hāwea – but it determines the triggers for when actions will happen in response to a dry year event.

“Clearer rules will provide the market with confidence that the contingent storage will be available to be used when needed. At the same time, the Authority also wants to ensure that contingent storage is not used too early because if this happens there may be insufficient storage available when it is needed most.

“The SOSFIP also provides critical forecasting and modelling information to stakeholders about the probability of an energy shortage, and when escalation can be expected to occur,” says Glass.

The SOSFIP is a system operation document prepared by the System Operator and incorporated by reference into the Code by the Authority.