Sudden New Zealand Power Outage Raises Supply Concerns
(Bloomberg) -- Concerns are mounting over the security of New Zealand’s electricity supply after power was cut to thousands of homes across the North Island without notice late Monday.
The outages occurred as record demand coincided with insufficient generation, which resulted in the need to reduce demand to maintain system security, state-owned grid operator Transpower said in a statement Tuesday in Wellington. The surge in demand followed a sharp drop in temperatures as the country was buffeted by a winter storm.
“Unfortunately, there was not enough generation to meet demand,” said Stephen Jay, general manager of operations. “As a result, Transpower had to ask all the local lines companies and large industrial users to reduce demand to help keep the system in balance. Beyond temporarily cutting power to hot water cylinders, some customers were disconnected.”
Prime Minister Jacinda Ardern wants New Zealand to be generating all of its electricity from renewable sources such as hydro, wind or geothermal steam by 2030. Critics have warned that removing coal or gas-powered plants from the system could expose supply to greater risk of disruption.
Ardern told reporters Tuesday the government is seeking answers to the power outage, adding “it was not good enough that we could not warm our homes,” the New Zealand Herald reported.
“We cannot say right now that all of the generation that could have come on line did come on line, and that is a critical question,” she said. “There may still be a case that this could have been prevented.”
Transpower said it had anticipated a surge in demand as temperatures dropped, and was aware some major generating units were unavailable. Still, it is investigating why other generation wasn’t started in time.
Energy Minister Megan Woods said she has been given assurances that the situation will be avoided today when demand peaks early evening. She told reporters that there was a “commercial constraint” in the market because Genesis Energy opted to have one of its gas-fired units at its Huntly plant standing idle.
Genesis had believed the unit wouldn’t be needed based on other capacity in the system but there was an unexpected outage at a central North Island plant, then wind generation dropped because of still conditions, Woods said. That left insufficient power to meet the surge in demand.
The situation was preventable because the system had the ability to physically generate the amount of electricity needed, Woods said.
The Electricity Authority, which regulates the industry, announced earlier Tuesday it has begun a project looking at how to ensure the electricity system remains secure and resilient over the coming decades.
Achieving the government’s aim of 100% renewable generation “will likely require a material increase in renewables, such as wind and solar generation, presenting new challenges to the operation of and investment in the electricity system, and to maintaining a secure, reliable and resilient electricity supply,” the regulator said.
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