System security and resilience
Improving the accuracy of intermittent generation forecasts
Improving the accuracy and frequency of intermittent generation forecasts in the spot market.
Overview
We will implement a hybrid forecasting arrangement after consulting on potential solutions to improve the accuracy of intermittent generation forecasts and offers.
This initiative is a key building block to improve the reliability, efficiency and affordability of the electricity system, which supports our statutory objective. It is also intended to support competition and innovation by reducing barriers to entry for new developers.
The arrangement relies on a centralised forecast with the option for self-forecasting if it is at least as accurate as the centralised forecast.
To give effect to the hybrid arrangement, we have decided to implement several key policy design measures. These changes aim to ensure intermittent generators’ offers are as accurate as possible during all trading periods.
A procurement process will be undertaken to select a service provider to provide a centralised forecasting service and we intend to have the new arrangements in place by winter 2025. This decision paper presents our key findings and decisions.
We have also created guidance to provide clarity to intermittent generators on how the provisions in the Code relating to resource persistence forecasting should be interpreted.
Timeline
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Winter 2025
Delivery —Centralised forecasting service
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17 October 2022
Review —Accuracy of wind generation, demand forecasts and bids from April 2021-March 2022
Project background
Incorrect forecasting by wind generators was a contributing factor in the 9 August 2021 grid emergency, which resulted in the disconnection of approximately 34,000 customers without warning.
In response to this grid emergency, the Electricity Authority (and other organisations) conducted a number of reviews and investigations to:
- understand the causes of power supply interruptions
- understand the industry’s response on the night
- learn lessons from the event to identify and recommend improvements to ensure similar circumstances are better managed in future.
In response to one of the review’s recommendations, we published an information paper about the accuracy of wind generation, demand forecasts and bids leading up to real time from April 2021 to March 2022. We found that intermittent generation forecasts are often inaccurate and unreliable until the last three and a half hours before real time.
Inaccurate forecasting is prevalent because there are minimal obligations around the accuracy of intermittent generation forecasts. Intermittent generators have few incentives to forecast accurately as there is little correlation between forecasting accuracy and revenue earnt in the spot market.
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