Industry continues to contingency plan for winter

Media release

1 May 2008

Attached graph showing current hydro levels (PPT)

Electricity industry continues to contingency plan for winter power Supply

Transpower, as the independent system operator, said today that despite the recent rain, hydro storage levels remain a significant concern to the industry. The industry is continuing with its contingency planning efforts to ensure a secure supply of electricity this winter.

As of today, hydro lake levels were around 60% of average storage which is significantly lower than normal at this time of year. See attached graph for further details.

The current low lake levels have primarily been caused by severe drought this year in both the North and South Islands, which has resulted in very low inflows into the hydro lakes. Other factors contributing to the concern over winter power supplies are the unexpected closure of the New Plymouth power station, dry summer conditions restricting output from the Huntly thermal power station which led to more hydro powering the system, and the decommissioning of Pole 1.

Transpower Chief Executive Patrick Strange said that although the rain earlier in the week bought the industry a little bit of time, the lake levels are still much lower than we are comfortable with.

“While the power system can manage with lower than average rainfall over the coming weeks, continuing very dry climatic conditions in the key South Island hydro catchments, or a loss of a major generating plant, while unlikely, would require further contingency measures to be implemented during May."

“Action is already being taken by the industry to conserve water and this has seen a number of noticeable changes on the power system – high running of thermal plant in the North Island, greater southbound flow across the HVDC link and measures undertaken to relieve the constraints that this has been placing on the transmission system."

“Current high spot prices will also encourage large industry customers to conserve electricity."

“All generating companies are also ensuring their own generation plant is fully available where possible and there are no problems with thermal fuel supplies."

Contingency measures will escalate should the dry weather continue.

“The generators and retailers are talking to their large customers about reducing their electricity usage should it be needed,” Mr Strange said.

“The industry has also now started the planning process for a public energy awareness and savings campaign to encourage voluntary residential energy conservation. Although this would be the final measure to be implemented and is some time away, it is important and prudent to have the plan in place so that it can be implemented quickly should it be needed."

“The industry does ask at this stage, that consumers be prudent with their energy use and to switch off any appliances at the wall, lights and heating/air conditioning that are not being used. We are not asking for consumers to go without electricity that they need – just to be mindful going forward of conserving electricity that is not being used."

“The industry has already implemented additional steps in their own organisations to ensure that energy that is not needed is being conserved, as well as talking to leading organisations about their own initiatives."

ENDS

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