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Electricity Authority selects NZX as preferred supplier

Electricity Authority selects NZX as preferred supplier for new extended reserve manager role


The Electricity Authority is pleased to announce the selection of NZX as the preferred supplier for the electricity market’s extended reserve manager role. This is a new role in the electricity industry.

The new extended reserve arrangements will be used as a ‘last resort’ mechanism to restore balance in New Zealand’s electricity system in the event of a sudden loss of a large amount of electricity generation. A loss of generation can threaten the security of electricity supply. The extended reserve manager will be responsible for procuring electricity demand that can be used to restore the balance and for ongoing management of the extended reserve service.

These arrangements will add an additional level of security to New Zealand’s electricity supply. The new service provider role will improve on the current regime which imposes a ‘one size fits all’ mandatory requirement on providers of extended reserves.

The Electricity Authority’s statutory objective is to promote competition, reliability and efficiency in the electricity industry for the long-term benefit of consumers.

Carl Hansen, Chief Executive of the Electricity Authority says, “the new extended reserve system supports our reliability objective and should minimise any power outages for consumers if an unplanned event threatens the security of the electricity network.”

NZX CEO Tim Bennett commented: “This new market based approach to securing extended reserve is both innovative and practical, and once implemented, presents a significant benefit to the New Zealand economy.”

“This role builds on NZX’s existing service provision activities to the Electricity Authority and we are looking forward to working with the industry in implementing this exciting initiative,” he said.

The extended reserve manager will now consult on the selection methodology and will deliver the first procurement schedule of extended reserve by late 2016.

The Authority selected NZX as its preferred supplier for this role through an open tender, consistent with the Government Rules of Sourcing.

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