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APEx Conference 2006 Experiences in how to deal with market stress situations – New Zealand

APEx Conference 2006 Experiences in how to deal with market stress situations – New Zealand Carl Hansen – The Marketplace Company. Outline of presentation Particularities of New Zealand electricity market Vulnerabilities: Case one: hydro shortage Case two: transmission constraints.

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APEx Conference 2006 Experiences in how to deal with market stress situations – New Zealand

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  1. APEx Conference 2006 Experiences in how to deal with market stress situations – New Zealand Carl Hansen – The Marketplace Company

  2. Outline of presentation • Particularities of New Zealand electricity market • Vulnerabilities: • Case one: hydro shortage • Case two: transmission constraints

  3. Particularities of New Zealand electricity market • Deregulated market – 5 major players • Threat of intervention present • Vertically integrated market participants • Narrow grid with many bottlenecks – 244 nodes • 75% of generation is hydro • Small hydro storage capacity

  4. 65% demand in North Island Auckland HVDC 66% of hydro capacity (39% of NZ capacity) in South Island Wellington Christchurch Dunedin Grid Constraint

  5. Case one: Hydro supply vulnerability • Maximum storage is 12% of annual demand • Inflows at lowest during periods of highest demand • Unpredictable inflows

  6. Responses to hydro shortage • Market responses: • Hydro generators conserve water • Industrial load decreases • Incentives offered to consumers • Government regulatory intervention – Whirinaki • Power conservation programmes

  7. Case two: transmission constraints • Market responses: • Nodal prices provide incentives • Government signals commitment to develop grid

  8. Future issues • Line upgrade to Auckland • What fuel to use for future generation • Improving demand response

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