System security and resilience
Managing peak electricity demand
How to better manage risks to electricity supply during peak demand periods.
Overview
The Electricity Authority is continuing work to support the electricity system to better coordinate resources during peak demand periods.
On 18 July 2024, we decided to develop six initiatives to support security of supply. Since then we have:
Prioritised demand response participation
- We launched TaskForce 2D: rewarding industrial consumers for short-term demand flexibility
- We are developing an emergency reserve scheme which should be in place by the end of 2026.
Updated market settings for security of supply
- We updated the scarcity pricing settings in April 2025
- We have initiated a review of the security standards and accompanying Security Standards Assumptions Document
Started investigating a five-minute variability management tool
- This work includes the potential to expand competition in the multiple frequency keeping service
Promoted flexibility and competition
- We have appointed a Flexibility Lead, responsible for developing and leading the Authority’s flexibility work programme.
- Our BESS roadmap and our BESS project page outline our work to unlock the benefits of BESS
Enhanced forward price discovery in flexibility markets
- The standardised super-peak product started trading in January 2025.
- We are developing a standardised demand response flexibility product via a co-design group
Enhanced outage information and coordination
- We strengthened the outage coordination rules in December 2024.
Timeline
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21 October - 8 November 2024
Consultation —First steps in improving outage coordinationView consultation -
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24 June 2024
Correspondence —Open letter about 10 May 2024 event
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24 June 2024
Correspondence —Letters from industry about 10 May 2024 event
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28 March 2024
Decision —Code amendment to permanently implement Option E
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12 January 2024
Consultation —Potential solutions for peak electricity capacity issuesView consultation -
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21 November 2023
Decision —Permanently implement Options A, B and D
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Winter 2023
Implementation —Option A: Provide better information headroom in supply stack. Option A is live in WITS
Option B: Provide forecast spot prices under demand sensitivity cases. Option B is live in WITS
Option D: System operator review of wind offers based on external forecast. Option D is live via EMS
Option E: Clarify availability and use of 'discretionary demand' control
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9 March 2023
Decision — -
25 November - 16 December 2022
Consultation —Driving efficient solutions to promote consumer interests through winter 2023View consultation -
Project background
The Electricity Authority is dedicated to making market improvements to enhance the reliability of New Zealand’s electricity system.
Since mid-2021 there has been an increase in the number of trading periods where the available electricity supply is tight, relative to the expected demand and normal reserve requirements. A key reason for this is the increased role of intermittent generation and the growing cost of gas, coal and carbon emissions. This project looks at how to better manage residual supply risk and solutions for responding to large, unexpected changes in wholesale electricity capacity requirements.
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