Security of supply policy framework
The Authority and the System Operator are involved in establishing security of supply policy.
The Electricity Industry Act 2010 requires:
- Transpower, as the system operator, to provide information, and short- to medium-term forecasting on all aspects of security of supply, and manage supply emergencies
- us, as the body responsible for the Code, to specify the system operator’s security of supply functions and how they are to be performed and reported on
- the Security and Reliability Council to provide independent advice to us on the performance of the electricity system, the performance of the system operator, and reliability of supply issues.
We require the system operator to produce, publish, implement and comply with:
- a security of supply forecasting and information policy (SOSFIP) which must specify the:
- regular monitoring that the system operator will publish to illustrate how system assets are being used to manage security of supply
- specify the annual reporting that the system operator will publish to assess whether security of supply standards are likely to be met for at least the next five years
- an emergency management policy (EMP) that sets out the steps the system operator must take during an extended security of supply emergency
- a system operator rolling outage plan (SOROP) that sets out the thresholds at which the system operator will implement rolling outages and the actions that the system operator and other industry participants must take in the event of rolling outages.
We can choose to approve or decline any SOSFIP, EMP or SOROP that the system operator puts forward.
Security and Reliability Council (SRC)
The SRC provides independent advice on the performance of the electricity system, the performance of the system operator, and reliability of supply issues.
Official conservation campaigns
An official conservation campaign is a period during which the system operator calls on New Zealanders to voluntarily reduce their electricity usage.
We require an official conservation campaign to be implemented when the risk of shortage (as assessed under the SOSFIP) exceeds 10% and is forecast to continue to do so for at least one week.
Official conservation campaigns may be declared only by the system operator. The system operator may declare an official conservation campaign in respect of the South Island only, or all of New Zealand.
Customer compensation scheme
When an official conservation campaign is in force, retailers are required to compensate qualifying consumers in accordance with the customer compensation scheme.
Rolling outages are a last resort measure in which the system operator is required to plan and implement compulsory electricity outages in order to prevent a complete system failure.
We require the system operator to implement an official conservation campaign prior to rolling outages.
If the voluntary savings of an official conservation campaign are insufficient, then compulsory savings in the form of rolling outages may be required.
In the event of catastrophic asset failure, it is possible that an official conservation campaign and rolling outages will be implemented simultaneously.
We require the system operator to produce an annual security of supply assessment.
We produce a set of assumptions that the system operator must use when preparing the annual security of supply assessment.