Four improvements to better manage winter peak demand

The Electricity Authority has confirmed the fourth option it will implement to better manage potential supply issues during periods of peak electricity demand this winter.

We have made an urgent amendment to the Electricity Industry Participation Code that takes effect from today to ensure that Option E - Clarify availability and use of discretionary demand control can be implemented in time for winter 2023.

Option E requires distributors to provide information to the system operator on the level of discretionary demand control available to the system operator under a grid emergency. It will provide an additional information gathering method to the system operator to maintain system security while providing enhanced information and incentives to market participants.

The Electricity Authority consulted late last year on 11 options to better manage risks to electricity supply during peak demand periods in winter 2023 after information from the system operator indicated tight conditions may be prevalent this winter.

Prior to the decision to implement Option E, we decided on three other improvements to assist with management of the potentially challenging situations this winter.

The four options being implemented are:

• Option A: Provide better information on headroom in supply stack
• Option B: Provide forecast spot prices under demand sensitivity cases
• Option D: System operator review of wind offers based on external forecast
• Option E: Clarify availability and use of ‘discretionary demand’ control (such as ripple control)

We have also decided not to progress further work on Option G - Selectively increase existing ancillary service cover at times to offset increased uncertainty in net demand, for winter 2023. We had requested the system operator investigate the potential operational need to increase the frequency keeping procurement band over peak demand periods for winter 2023. The size of the frequency keeping band is subject to a technical assessment by the system operator based on system conditions and its need to meet its normal frequency management Principal Performance Obligations.

Having completed these investigations, the system operator has recommended that it is not prudent to increase frequency keeping cover as a capacity product for winter 2023, on the basis of its current analysis alone.

Five other longer-term initiatives will also be progressed as part of our work programme, but these will not be ready in time for winter 2023.

View more information on the project to better manage risks to electricity supply during peak demand periods in winter 2023 and the options being implemented.

View the urgent Code amendment that takes effect today.