Electricity Industry Confident About Auckland's Summer Supply

Energy Minister Pete Hodgson today welcomed an assurance from the electricity industry that Auckland electricity supply security risks for the coming summer can probably be managed without significant disruption for consumers.

Mr Hodgson today released the latest report of an industry working group set up in September to address the risks.

"This latest report indicates that the situation is finely balanced but manageable," Mr Hodgson said. "At some stage it may be necessary to mount a publicity campaign urging consumers to conserve power. However the situation may well be managed without consumers noticing any impact at all. Either way, the industry advises that it is looking forward to the summer with confidence."

The report notes two main changes in the situation in recent weeks.

First, Genesis was granted a resource consent that will allow its Huntly power station to generate under warmer Waikato River water conditions. Second, TransAlta has announced that its Stratford power station in Taranaki will be shut down for maintenance in 2001.

Mr Hodgson has been advised that even without Stratford and with restricted output from Huntly over the critical summer period - in addition to the current unavailability of Contact's Otahuhu B station - the Auckland region’s power supplies will be secure. This assumes no additional failures and average summer weather conditions.

The critical period for managing the risk to supply is expected to be limited to a few weeks in February and March. The Working Group will continue to monitor the situation and review contingency plans throughout the summer.

Working Group minutes and reports are available on www.transpower.co.nz

Attached: latest Working Group report

19 December 2000

Hon Pete Hodgson
Minister of Energy
Executive Wing
Parliament Buildings
WELLINGTON

Dear Minister

Report to Minister of Energy on 2000/01 Summer Electricity Situation in the Upper North Island

Purpose

To provide an update to the report provided on 31 October 2000 on summer electricity supply issues. Also to provide a progress report on the actions taken by the working group to ensure appropriate management of the situation takes place.

Background

Detailed background information was provided in our 31 October report. This section will therefore provide an update on the key issues which have arisen subsequently.

In our 31 October report we noted that despite the failure of Contact Energy’s Otahuhu CCGT power station and restrictions to Huntly generation due to its resource consent conditions, we were confident that the situation could be managed using normal operating and market systems through line companies routine management of controllable domestic hot water.

The above was conditional upon three main factors.

1. The continuing availability of other generation plant – primarily Taranaki and Southdown.

2. The avoidance of a sustained transmission outage.

3. Normal summer weather conditions.

During December we were notified by TransAlta that their Stratford CCGT power station will require an estimated 30 to 40 day outage in 2001. Whilst the timing of the outage has yet to be confirmed the working group has made the assumption that it will occur coincidentally with the unavailability of Contact Energy’s Otahuhu CCGT power station.

Genesis Power has informed us of their success in securing the resource consents for the Waikato River. The consents have conditions and Huntly is likely to be in a position to operate to the new conditions by mid February.

Extended weather forecasts received from NIWA predict higher than average rainfall but only average temperatures for the Upper North Island region. Therefore whilst humidity may at times be high we are not expecting unseasonably high temperatures. Additional rainfall may increase flows into Lake Taupo. The current lake level has fallen below expected levels for the time of year. We will continue to monitor and advise if it becomes a concern.

Availability of other generation and transmission is in line with our expectations. The date for commencement of re-commissioning Otahuhu CCGT power station has still to be confirmed but mid February 2001 continues to be the best estimate.

Working Group Progress

The Working Group and its workstreams have made significant progress to ensure all appropriate management issues have been reviewed. All actions are being completed to plan. The following sections provide a brief overview of the progress made in each workstream.

Workstream 1 – Review and gain confidence in the forecasts to predict critical circumstances.

Forecasts are continuing to be updated as information changes. Applying information to various potential conditions or scenarios enables analysis of changing conditions. Nine scenarios (a) through (i) are currently under consideration:

Scenario Region MW Transfer Limits Exposure

Limit Type Normal Security
MW *See italic text new para
a) Base case – No Otahuhu CCGT and no Huntly Energy 1320 1.5%

The following are in addition to Base Case conditions.
b) Low Taranaki (eg. Stratford CCGT outage) Energy 1276 6.0%
c) One Huntly, reduced Waikato Voltage 1300 2.5%
d) One Huntly on minimum MW Voltage 1415 0.0%
e) Low Taranaki, no Southdown Energy 1151 36.0%
f) Low Taranaki, no BHP Steel generation Energy 1219 23.0%
g) Huntly @ 150 MW replaces Southdown Energy 1320 1.5%
h) Low Taranaki, Huntly @ 150 MW replaces Southdown Energy 1276 6.0%
i) No Southdown, normal Taranaki Energy 1198 28.0%

The exposure column in the above table relates to the amount of time which load control would be required to operate. The size of the load reduction required would be dependent upon the time of day and prevailing weather conditions. It should also be noted that (with respect to scenarios (e) and (i)) it is very unlikely that there would be a full failure of the Southdown power station as it has a number of individual generating units.

We have concluded that :
· Scenarios (a),(b),(g),(h) can be managed with normal load control and market price signal response.
· Scenarios (c) and (d) are voltage support risks and can be managed with normal load control and generator management.
· Scenarios (f) may be able to be managed with normal load management and some conservation.
· Scenario (e) and (i) given the extent and duration of the shortfall these are likely to be grid security events where normal market conditions are suspended and the grid operator can call on generators and line companies for immediate responses.

Despite the unlikely possibility of an extreme scenario occurring, contingency plans for a grid security event and additional conservation are continuing to be reviewed and developed. These are outlined in the sections on other workstreams below.

Workstream 2 – Identify and recommend possible quick fixes to raise voltage stability limit or transfer of MW into the upper North Island at peaks.

Several “quick fixes” have been identified and implemented. Of particular note is the implementation of the Tokaanu inter-trip, which is now operating and has increased transmission capacity. The co-operation of Genesis Power in operating the Tokaanu power station in a particular configuration was instrumental in Transpower’s ability to complete this initiative.

Additional ideas and innovations are being considered on a continuous basis and a table of the progress made is contained in the Working Group’s documents published on Transpower’s web site.

Workstream 3 – Contingency Planning

Joint contingency plans have been reviewed for all the above scenarios. Transpower and distribution companies have reviewed emergency procedures and a joint paper trial (simulating the more extreme scenarios as was used for Y2K) is planned for January 2001.

The Auckland local bodies CEO Forum has been briefed and communications with emergency services are following established procedures.

Workstream 4 – Voltage Constraint Price Signals

This workstream has concluded its work. Some recommendations for future market improvements will be made in the Working Group’s final report.

Workstream 5 – Customer Information and Advice

The communication plan has been updated. An advisory package of questions and answers on energy conservation measures is being prepared should it become necessary to assist consumers to manage their power usage.

A public information campaign has been produced in outline, which can be implemented quickly in the unlikely event of an extreme scenario occurring. Electricity industry participants have been asked to fund this initiative.

All actions covered by this workstream are progressing well.

A list of Working Group members’ contact numbers for the holiday period has been produced should the situation change and urgent action be needed.

Conclusions

Even given the potential for reduced Taranaki generation, we are still optimistic that all but extreme events can be managed without disruptions to power supplies. The timing of Huntly power stations ability to fully utilise its resource consent will be an important feature in establishing when the critical period has passed.

All contingency planning reviews are nearing completion and preparations have been made should a grid security event occur.

The information campaign under development will enable the general public to take appropriate conservation action to maintain the continuity of power supplies should an extreme situation occur.

The working group believes it has undertaken the work necessary to enable us to look forward to the summer with confidence.

Please contact me if you require anything further.

Yours faithfully

Bill Heaps
General Manager Sales & Marketing

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