Electricity Authority seeks input on Emergency Reserve Scheme

The Electricity Authority Te Mana Hiko is seeking feedback on the proposed establishment of an Emergency Reserve Scheme (ERS) to provide an extra layer of protection against unplanned disconnections for New Zealand households and businesses.

This amendment to the Electricity Industry Participation Code 2010 (Code) would enable organisations that opt-in to the scheme to be paid to reduce their demand, or to provide additional generation, during rare periods when the demand/supply balance is especially tight. These organisations would do this for short periods where it makes commercial sense for them to do so.

“Occasionally there will be short periods when the electricity system urgently needs extra capacity,” says Hayden Glass, Electricity Authority General Manager of Wholesale and Supply.

“There are a range of tools available to the System Operator (Transpower) already, but the ERS would provide more certainty that the lights will stay on for everyone when those rare conditions occur.

“The scheme is an emergency measure, designed to create an alternative to involuntary disconnection of customers when other market mechanisms have run their course.”

An earlier consultation on the high-level rationale and design for the scheme received broadly supportive feedback from submitters, and that input has been used to refine the design and develop the proposed Code amendment.

We aim to publish our decision on the proposed Code amendment by the end of the year. If the decision is to proceed with the scheme, implementation will commence in January 2026 with the Code changes taking effect in May.

The scheme is one of the initiatives advanced by the Energy Competition Task Force to reward industrial consumers for the benefit their demand flexibility can bring to the electricity system.

If the ERS is implemented, we will work closely with the System Operator to monitor and review the scheme’s performance to ensure it delivers the desired outcomes without undermining the wholesale market.

Emergency Reserve Scheme Code amendment proposal consultation.