Joint initiative delivers $22 million in savings for electricity consumers

06 October 2016

Transpower today has identified market savings of more than $22 million, as a result of an innovative programme launched with the Electricity Authority in 2014. These savings have been achieved by transforming the way the power system’s frequency is managed.

 

The National Grid is kept at a constant frequency to ensure the power system is stable and can provide consumers with a reliable power supply.

 

Previously the North and South Island frequencies were managed separately. By managing the power system at a national level across both islands, Transpower has reduced its ongoing monthly procurement costs for frequency keeping control services.

 

John Clarke, General Manager System Operations said that the foresight of the investment undertaken in new, smart control systems as part of the 2013 HVDC upgrade has made it possible to run the power system differently and deliver real savings for everyday New Zealanders.

 

“Working with the industry and Electricity Authority, we have successfully reduced the cost of frequency keeping and identified more than $22 million in market savings over the last two years.

 

“We expect to see increased competition in the electricity market as a result, particularly at peak times. Load that was previously used to manage frequency can now be offered into the market and used to meet customer demand.

 

“We continue to identify and deliver ongoing efficiencies in the way we provide the system operator service. In the System Operator Annual Review and Assessment, published last month, we outline our plans to find further savings through the management of reserves and frequency keeping.” he said.
 

For further information, please contact:
Rebecca Wilson, Corporate Communications Manager, 04 590 6695; 021 578 608

 

Background information:

  • In 2013, Transpower invested $600 million in the HVDC inter-island link, introducing a new control system that enables frequency keeping control (FKC) functionality. This functionality allows Transpower to link the North and South Island frequencies - which were once operated separately - and operate the power system at a national level. This maintains a consistent and stable system frequency of 50 Hertz.
  • In 2014, Transpower began trialling FKC functionality as part of a wider Reserves and Frequency Management (RFM) Programme - a joint initiative with the Electricity Authority. The trial was successful and FKC functionality has now been in use since March 2015.
  • The System Operator Annual Review and Assessment was published on 6 September.