We need more power, Transpower warns amid concerns about lack of supply

Transpower has signalled power supplies are likely to be tight on Tuesday evening.

Stuff

Transpower has signalled power supplies are likely to be tight on Tuesday evening.

Electricity system operator Transpower has called on power companies to make more generation available to reduce the risk of there being too little to meet demand between 6pm and 7.30pm on Tuesday.

Transpower said that, based on current offers from generators, there would be less than 200 megawatts of excess power on hand to meet any unforeseen circumstances during the evening demand peak.

The state-owned enterprise has made similar calls on several days this year amid a general rise in electricity demand and a lack of investment by power companies in recent years in new generation.

But it has so far avoided power cuts.

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Transpower’s general manager of operations, Stephen Jay, said it was not anticipating any impact on electricity supply to consumers on Tuesday evening.

“However, with the cold weather around the country expected to lead to increased electricity demand, we anticipate that residual generation could fall below the buffer we aim to keep in the system to maintain stability if additional generation is not offered,” he said.

“We have called an industry conference this afternoon and together with today’s notice we anticipate that this will prompt action from industry to resolve the situation.”

Power prices on the spot market spiked above 50 cents a kilowatt-hour on Monday morning as colder weather set in.

The Major Electricity Users Group issued a statement on Monday reiterating its concerns about the outcomes being delivered by the power market

It said electricity prices on the wholesale market had averaged $ 176 per megawatt-hour so far this year, up from $ 166 / MWh over the previous two years.

“To put it into context, the Interim Climate Change Committee found that a wholesale electricity

price of $ 115 / MWh was unaffordable for our economy to function in the longer term without

significant loss of businesses and jobs, ”it said in an update to members.

“The Electricity Authority, even after they take into account all known factors such as the cost of

generation, constraints on gas supply, hydro lake levels, and rising carbon costs, cannot explain

almost $ 40 / MWh out of the average $ 166 / MWh prices we’ve seen over the last two years, ”it noted.

The MEUG said prices needed to reflect the lower long-run cost of new renewable generation and there needed to be “significant investment in new renewable generation”, as well as clarity on the pathway forward for thermal generation.