Many options available to tackle low hydro lakes

The government has been working with the electricity industry for some weeks now on a range of options to manage the impact of the drought and low hydro lakes on the electricity system. Tomorrow, Cabinet will again be be considering the range of measures planned to ease the tight winter power situation, Energy Minister David Parker said.

“If rain falls in the right places soon, few of these additional measures will be needed but the longer the drought persists, the more steps will be required.”

The Minister said the steps implemented to date include:

-Government departments saving power, for example by ensuring lights and equipment are turned off when not in use

-A general conservation campaign has been prepared and is ready to run if needed. Despite calls by some for this to have started already, this would have been premature. Campaigns become less effective over time and should not be started too soon. Two weeks ago, I said that without further rain or other remedial measures, a campaign was likely to required in around three weeks. That time frame remains correct, and further decisions on that can be expected next week.

-In response to prices, some larger industrial users have reduced their electricity usage. This is what is meant to happen. Industrial users have the advantage of lower tariffs most of the time. When we have a dry year, prices for industrial users increase and this incentivises them to reduce usage.

-The reserve generation facility at Whirinaki is running, which adds to supplies.

-Contact Energy has temporarily recommissioned part of its New Plymouth gas-fired power plant, providing an additional 100 MW of baseload.

-In order to stop electricity spot prices rising too high, the Government has authorised the spending of up to $40 million to cap the price of the Whirinaki diesel fired generator, which would otherwise have driven up spot-prices to unnecessarily high levels. (Domestic consumers are not exposed to the spot market and are unaffected by this). Other options also being pursued as additional levels of protection if required. They include:

-Negotiating with other major industrial users to buy-back load.

- Contact Energy investigating whether a further unit at New Plymouth can be recommissioned

-Advancing the commissioning date for Mighty River Power’s new geothermal plant at Kawerau, which is now expected to begin output in early to mid July instead of October

-Preparing legislation which would allow for temporary lowering the minimum lake level for one or more of the hydro lakes if necessary. Legislation was passed in 1992 to the same effect, and so is already drafted.

“Rainfall over winter is forecast to return to normal levels, and if that happens few of these steps will be necessary,” David Parker said

“I repeat that predictions by doomsayers that the lights are expected to go out as a result of low lake levels are wrong.”

ENDS

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