The Electricity Authority Te Mana Hiko has announced the establishment of an emergency reserve scheme (ERS) to provide households and businesses in New Zealand with an additional safeguard against unexpected power outages.
These occur in rare situations when electricity generation falls short of demand.
“The ERS will be implemented as a new ancillary service to support the electricity market and will be operated by the System Operator (Transpower). It will enable industrial organisations to opt-in and be paid to reduce their electricity demand briefly or provide additional generation when supply is especially tight,” the Electricity Authority said in a press release.
“These organisations would do this for short periods where it makes commercial sense for them to do so.”
Hayden Glass, the Authority’s General Manager of Wholesale and Supply, stated that the scheme was developed through consultations with the electricity sector and enjoys strong support from industry participants.
“Our research estimates net economic benefits of $33 million from establishing an ERS. It would be significantly cheaper than investing in additional emergency generation.”
Glass noted that the ERS advances the Authority’s core strategic goal of delivering a reliable, secure electricity supply in New Zealand that rebounds quickly from disruptions.
“Emergency events that cause unplanned disconnections are very rare, but they can be quite impactful. The most recent example occurred on 9 August 2021 when around 34,000 consumers were disconnected for up to two hours.”
“This is the sort of costly and damaging outage an ERS will help prevent.”