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System security and resilience

Managing peak electricity demand

How to better manage risks to electricity supply during peak demand periods.

  • Generation

    • Overview

    The Electricity Authority is continuing work to support the electricity system to better coordinate resources during peak demand periods.

    On 18 July 2024, we decided to develop six initiatives to support security of supply. We will:

    • accelerate demand response participation in the market by actively exploring a full range of regulatory levers
    • change market settings for security of supply by updating and consulting on the Security Standards Assumptions Document
    • start development of an integrated standby ancillary service in the form of a five-minute variability management tool to provide cover for a sudden reduction from intermittent generation sources
    • promote flexibility and competition in the wholesale and ancillary service markets by undertaking work to enhance battery energy storage systems and dispatchable demand participation and remove barriers to entry. This includes building additional value streams for flexibility
    • enhance forward price discovery in flexibility markets by developing standardised flexibility financial products with the support of industry co-design
    • enhance outage information and coordination by developing potential improvements to the outage coordination process.

    Timeline

    Past activity

    Project background

    The Electricity Authority is dedicated to making market improvements to enhance the reliability of New Zealand’s electricity system.

    Since mid-2021 there has been an increase in the number of trading periods where the available electricity supply is tight, relative to the expected demand and normal reserve requirements. A key reason for this is the increased role of intermittent generation and the growing cost of gas, coal and carbon emissions. This project looks at how to better manage residual supply risk and solutions for responding to large, unexpected changes in wholesale electricity capacity requirements.

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