What is a low residual situation?
Residual” refers to the remaining offered capacity for a trading period after the required energy and reserves have been scheduled to meet demand. Low residual situations occur when forward market schedules indicate the Residual has dropped to a level where, given real-time operating uncertainties, there is increased risk of a grid emergency and potential for demand management to be necessary. The System Operator declaring a “Low Residual Situation” informs industry participants of this risk, enabling them to respond and mitigate it.
The System Operator will declare a Low Residual Situation when Island Residual Generation is less than 200 MW. This is notified to industry by the System Operator via a Low Residual Situation Customer Advice Notice (CAN), up to an hour before real time.
What is an energy or reserve shortfall
An energy or reserve shortfall in our schedules means that we do not have sufficient generation and/or reserve offers to meet the forecast demand or N-1 security requirements. Shortfalls are notified to the industry via a Warning Notice (WRN) up to an hour before real time, or a Grid Emergency Notice (GEN) if the situation is less that one hour away.
Monitoring low residual and shortfall situations
A key system operator role is to monitor the available electricity generation capacity and expected demand and provide this information to industry so that generators know how much electricity they need to make available.
The New Zealand Generation Balance (NZGB) is a conservative planning tool to help industry plan essential maintenance outages. This looks for potential shortfalls of electricity supply over the next 200 days by comparing available generation and demand, based on the highest loads from previous years.
Within seven days of real time, we monitor potential shortfalls through the market schedules, which provide a more accurate picture of load forecasts, generation offers and demand bids than the NZGB balance.
Notices
We have a series of notices we may provide during this time, as shown in the image below. These include Customer Advice Notices (CANs) that may advise of potential NZGB shortfalls or if residual generation drops below 200 MW based on market schedules (known as a low residual situation).
Warning Notices (WRNS) may be issued from 36 hours out until one hour before real time to warn of an energy or reserve shortfall. And a Grid Emergency Notice (GEN) is issued for an energy or reserve shortfall within one hour of real time (i.e. inside gate closure).
The notices issued typically include a request for participants to make changes to offers to help alleviate the situation. This generally involves reducing demand through load bids or increasing generation through additional offers.
Our assessment process for low residual notices
Reasonable and prudent judgement must be used in order to determine if a low residual situation exists. Before declaring a low residual situation, we consider the following:
- Is the generation wind forecast likely to be accurate given recent experience, that day’s conditions and weather forecast?
- Is there a lot of wind scheduled, which could increase the impact of inaccurate forecasting?
- Will AC transmission limitations or constraints exist that could constrain generation off that makes up part of the remaining island residual?
- Are both island Load Forecasts tracking accurately in all load areas? Is Metservice predicting a risk of lower temperatures
- What is the makeup of remaining residual generation? (e.g. is it slow-ramping, or potentially unavailable due to transmission constraints)
- Is frequency keeping Ctrl Max constraining off potential generation?
- Are there any outages that could be recalled that are contributing to generation being constrained or unavailable?
- Is the instantaneous peak likely to be higher than the forecast ½ hour average?
- Could HVDC transfer be increased if required, or if more SI generation was offered?
Analysis of these variables could result in a low residual situation being declared despite scheduled residual being greater than 200 MW, or not being declared with less than 200 MW residual being scheduled.
Further details of our operational process (and associated notices) for managing insufficient generation offers and reserve shortfalls are detailed in
The document linked below will assist distributors who have agreed to signal their quantity of available controllable load via difference bids on WITS.
- Process for managing planned outages in response to a low residual situation
Why rescheduling outages helps
Generation is often unable to offer due to outages on generation or transmission assets. By delaying, recalling, or cancelling outages, more generation capacity can often be made available, helping to alleviate the low residual situation.
Why engage the Asset Owner’s to reschedule outages during a low residual situation?
Generators may have a financial incentive to reschedule outages during low residual situations due to the increased system security risk to avoid exposure to scarcity prices or to increase revenue due to high prices. The System Operator will review generator outages and engage with them directly to explore viable rescheduling options during forward-looking security risk assessments.
The Grid Owner, who operates the high voltage transmission grid, does not have a financial incentive to reschedule outages. The System Operator engages with Grid Owner during these situations of increased system security risk and the Grid Owner have a regulatory obligation under the outage protocol to consider rescheduling outages if the System Operator raises concerns.
The flow diagram below outlines the process the System Operator’s Operations Planning follows to formally engage the Grid Owner in rescheduling its transmission outages under clause 6 of the Outage
Protocol document included in the Electricity Industry Participation Code.Process for engaging the Grid Owner
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Contact for more information
We encourage any industry participants who have questions around of our communications and processes to contact us via [email protected]