Decision to implement Option E and not progress Option G

May 2023

The Electricity Authority has decided to implement Option E and not progress Option G.

The assessment of these options against the Electricity Authority’s statutory objective described in our decision paper remains valid following this further development.

Decision to implement Option E

Following the Electricity Authority’s decision to further progress this option, the Authority has worked with the system operator and the wholesale information trading (WITS) manager to confirm design details for this option.

The Authority will continue to work with the system operator, NZX and distributors to implement this option. An urgent Code amendment to ensure the option can be implemented in time for winter 2023 will come into effect for nine months from 3 May 2023.

Following winter 2023, the Electricity Authority will consider whether a permanent Code amendment is appropriate for winter 2024 and beyond.

Read the decision paper here.

Read the Gazette notice detailing the urgent Code amendment.

Decision not to progress Option G

The Electricity Authority has decided not to progress further investigations into Option G (Selectively increase existing ancillary service cover at times to offset increased uncertainty in net demand) for winter 2023.

On 9 March 2023, the Authority published its decision to progress development of Option G described in the decision paper Driving efficient solutions to promote consumer interests through winter 2023. Following initial investigations into the merits of increasing ancillary service provision to help manage increased uncertainty in the wholesale market, the Authority requested the system operator to investigate the potential operational need to increase the frequency keeping procurement band over peak demand periods for winter 2023. The size of the frequency keeping band is subject to a technical assessment by the system operator based on system conditions and its need to meet its normal frequency management Principal Performance Obligations.

Having completed these investigations, the system operator has recommended that it is not prudent to increase frequency keeping cover as a capacity product for winter 2023, on the basis of its current analysis alone. Given this recommendation, the Authority has decided not to initiate further investigations into Option G for winter 2023.