The extended reserve manager will manage and adjust the new scheme to ensure its compliance with the system operator’s extended reserve technical requirement schedule

In February 2017, the Authority appointed NZX Limited (NZX) as the extended reserve manager, and approved the extended reserve selection methodology.

NZX will use the methodology to select and configure demand units for a North Island 4 block automatic under-frequency load shedding (AUFLS) scheme.

The extended reserve scheme planning phase began in February 2017. The extended reserve manager will select demand units that will provide extended reserve, and the system operator will then agree commissioning plans for those demand units with the extended reserve providers (asset owners).

The implementation phase, during which the old 2-block relays are decommissioned and new 4 block relays commissioned, is expected to begin in late 2017.

Efficient procurement of extended reserve project page.

Background

AUFLS is a ‘last resort’ mechanism to restore the balance between electricity demand and supply. If a power station suddenly stops generating electricity, and instantaneous reserve cannot restore grid frequency, AUFLS relays automatically trip at specific under-frequencies to disconnect consumers on segments of the network. This shedding of demand is AUFLS in action.

In 2010, the system operator conducted a technical review and found the current 2-block AUFLS scheme posed a significant risk of shedding more load than required. This situation was a direct outcome of a scheme that obliges distributors to provide a minimum 32 per cent ‘at all times’, but sets no maximum constraint; an obligation most easily met by arming significantly more than 32 per cent of a distributor or direct-connect consumer’s off-take. To address the issue, the system operator proposed a technical design which included four under-frequency blocks (each with minimum and maximum percentage of load available to automatically shed at a given under-frequency), with one of the blocks also having a rate-of-change of frequency trigger.

The Authority, working with stakeholders, subsequently proposed an extended reserve scheme which delivered this technical design, and in alignment with the Authority’s statutory objective, also delivered:

  • improved reliability in the power system by centrally selecting demand units from the entire North Island network to efficiently deliver the best possible alignment between the total off-take of the network in any half-hour and the corresponding 32 per cent of demand available to be shed through the extended reserve scheme
  • improved efficiency by prioritising, for disconnection, customers with the lowest cost of interruption and selecting network assets so as to deliver the scheme at the lowest net cost.

Following extensive industry engagement, the Authority amended the Electricity Industry Participation Code 2010 (Code) in 2014 to provide the legislative framework to establish and operate the scheme, and subsequently approved the extended reserve selection methodology, which sets out how it will operate.