NI power on ‘edge of a shortage’
A chain of events late last week highlighted the dire state of the North Islands supply and sent northern wholesale power prices rocketing.
Spot prices in Auckland on Friday reached over $540 a megawatt hour (MWh), or 54c a kilowatt hour (kWh). Those in the South Island stayed around $70 a MWh, or 7c a kWh.
The countrys diesel-burning emergency stand-by power station at Whirinaki, in Hawkes Bay, had to run at full capacity in an attempt to ease the shortage and bring prices down.
While the heat is on the North Island, experts warn that the risk of power shortages could easily shift to the South Island if dry summer weather carries on into autumn and the already below-average southern hydro-lake levels keep dropping.
Despite the squeeze in the North Island last week, the Electricity Commission remains confident about power supply.
However, chairman David Caygill said yesterday he had not known how high spot prices had gone last week and was unaware if Whirinaki had been commissioned to help out.
Whirinaki, operated by Contact Energy, can generate enough power for about 60,000 average households and is contracted by the Government to start generating when spot prices rise above $200 a MWh.
Auckland electricity consultant Bryan Leyland said the system was running on the edge.
Late last week, Contacts 380MW Taranaki combined-cycle power station had an equipment breakdown and high water temperatures in the Waikato River forced Genesis Energy to cut back output from the Huntly power station.
The wind wasnt blowing, so windfarms in the Manawatu werent generating any electricity, Leyland said.
The (Cook Strait high-voltage) DC (direct-current) link was down to one pole, which is rated at 700MW but constitutes a risk if it trips, so is constrained to only 400MW.
Although there was enough power in the South Island to send power to the North Island, the prices shot up.
On top of that, hydro stations are getting very reluctant to use water — they realise it is going to be a dry summer and autumn, and if they use it now, they wont have it later.
That all combines to give us a system running on the edge of us declaring a national system emergency.
Were on the edge of a bloody shortage.
What it means for the South Island is if there isnt much rain, and the South Island needs to be propped up by the North (Island), the north wont have much left to prop it up with, so the situation will suddenly be reversed.
Unless we get unexpected and heavy rain, theres a high risk of shortage in the winter.
From Friday, the Taranaki station would be out of action for two months for maintenance, which would make the situation worse, Leyland said.
Caygill said the high prices were unsurprising, given the constraints.
One of the functions of a higher price is to signal to people electricitys going to be more expensive to produce.
They are not permanent issues. In one sense, Im not sure that what sounds like a temporary set of factors coming together represents a problem we should be concerned about.
Hydro lakes were a little below average, but not alarmingly so.
He had not been told about the high spot prices.
The fact no-one rushed to tell me tells you something about the commissions assessment of what lay behind them.
Major Electricity Users Group executive director Ralph Matthes said the outlook for the hydro lakes was not promising, although conditions were not too bad yet.
Wholesale power prices had dropped over the weekend.
But were on the cusp about getting worried about autumn, and what happens with inflows, and what happens with whether Huntly can come on a bit more.
Were concerned when you get a half-hour price at $500 (a MWh). Whats of more concern is if the trend is heading towards a monthly average of 10c a kWh or $100 a MWh.
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Thursday, January 31st, 2008 at 6:07 pm under