Ancillary Services Overview

We procure ancillary services to support the reliable operation of the power system and assist us to meet our Principal Performance Obligations  (PPOs) specified in the Electricity Industry Participation Code (Code).  

There are currently five ancillary services we can procure:

  • Frequency Keeping (Multiple Frequency Keeping and Back-up Single Frequency Keeping)
  • Instantaneous Reserve
  • Over-frequency Reserve
  • Voltage Support
  • Black Start

The Procurement Plan  sets out the mechanisms we use for procuring these services, as well as the technical requirements and key contractual terms applying to each service.  We are required to use reasonable endeavours to both implement and comply with the Procurement Plan.

We enter into contracts with market participants (generators, distributors, large load providers and demand aggregators) via a closed tender process conducted between August and November each year. We may also enter into contracts outside this tender period when appropriate. Our standard contract terms are updated annually.  Samples of our standard contract terms for all ancillary services are linked below.

Prior to entering into contracts, new providers must demonstrate the capability of their equipment to provide the service through testing.  Some services also require regular testing during the term of the contract.  Guidance on testing is set out in the Companion Guide for Asset Testing.

We procure ancillary services either:

  • on a “firm quantity procurement” basis, where we procure services on a fixed quantity or fixed price basis, regardless of whether the ancillary service is dispatched or not (eg over frequency reserve, voltage support and black start); or
  • through a half-hour clearing market process, where contracted ancillary service providers submit offers and are dispatched via a market for that service (eg instantaneous reserve and frequency keeping). That market is then priced and settled via the Clearing Manager.

In 2017, we are inviting tenders for Frequency Keeping (Multiple Frequency Keeping and Back-up Single Frequency Keeping), Instantaneous Reserve, and Black Start (North Island only).

Related Documents

Procurement Plan
GL-EA-010 Companion Guide for Testing of Assets [ pdf 3.19 MB ]

System Operator standard contract terms for all ancillary services

Part A Foundation [ pdf 294.29 KB ]
Part A1 Glossary and Interpretation [ pdf 265.24 KB ]
Part A2 General Terms [ pdf 480.27 KB ]
Part B Trading Agent [ pdf 299.58 KB ]
Standard Contract Terms for Black Start [ pdf 381.54 KB ]
Standard Contract Terms for Multiple Frequency Keeping [ pdf 392.55 KB ]
Standard Contract Terms for Backup Single Frequency Keeping [ pdf 371.15 KB ]
Standard Contract Terms for Instantaneous Reserve [ pdf 338.74 KB ]

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