Electricity Authority acts quickly to strengthen security of electricity supply ahead of winter

The Electricity Authority Te Mana Hiko has changed the rules it oversees to strengthen the security of our electricity supply ahead of winter.

An urgent Code amendment, which takes effect today (14 March), will give Transpower (as system operator) enhanced information gathering powers to empower it to more effectively manage security of supply risks.

A second Code change will update the ‘scarcity pricing settings’. This will ensure the correct pricing signals are set in the wholesale market to incentivise immediate responses, should a shortage situation emerge. It will also encourage investments in demand side flexibility, batteries and fast-start generation. The updated settings take effect from 17 April.

Together, these changes will help ensure consumers can continue to rely on their electricity supply through winter, despite challenges caused by changing weather patterns.

"While we are better prepared for this winter than last year, New Zealand’s hydro inflows are the lowest on record for this time of year. Low hydro lake levels increase reliance on thermal generation, and it is critical Transpower has accurate thermal fuel information so can do its job effectively," says Jeremy Cain, acting General Manager Wholesale and Supply.

"Transpower is responsible for forecasting our electricity system’s ability to meet demand and managing risks associated with energy shortages. The availability of thermal fuels information is increasingly critical for forecasting and managing security of supply. The winter of 2024 highlighted how constrained thermal fuel supply can significantly impact both hydro generation and overall system stability. Transpower needs access to that information so it can give the industry accurate and actionable insights to inform their decisions ahead of winter."

"While market participants retain full responsibility for making decisions on their level of exposure to electricity spot prices, and for managing that exposure on an ongoing basis, they need good information to inform those decisions," says Cain.

Read more on the urgent Code amendment to improve information gathering powers for the system operator.

Read more on the update to scarcity pricing settings.