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25th January 2010 Electricity security will cost consumers This week’s power cuts in Auckland are another illustration of the vulnerability of electricity to historic underinvestment. If New Zealanders want security of supply, they need to be ready to pay for it. Security means having an alternative way to get electricity to all consumers when something goes wrong. While the issues around the trimming of trees and property access in the Waikato are specific to that region, the results highlight the electricity supply problems that New Zealand is facing. In addition to the well-documented vulnerability of the national grid, our electricity generation system is also coming under threat. This is primarily because of the unreliability of wind generation and because eroding safety margins in our generation capacity leave us at the mercy of dry winters. To make matters worse, the capacity of the Cook Strait link is limited until 2012 when the first stage of an upgrade will be completed. New Zealand is one of the few countries in the world with an electricity generation system so reliant on climate-related sources– hydro and wind. Our storage lakes have limited operating ranges and hold only enough water for a few weeks of winter energy demand. A shortage in generation can only be overcome using gas peaking plants, but there are serious doubts as to whether power companies can consent and build these plants in time to meet our increasing demands. So there is potential in New Zealand for a perfect storm–a vulnerable transmission system, increasingly dry winters, low wind, and the limited capacity of the Cook Strait link, little storage and inadequate peaking capacity. If these factors should combine, the result could make what has happened in the Waikato seem like a minor disruption. Cheap and secure do not go hand in hand, if New Zealanders want to avoid future power supply issues, they will have to be prepared to pay. For further comment please contact: Prepared by Rebecca Adams,
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