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Transpower highlights November supply risks

Wednesday 30th October 2019

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National grid operator Transpower is urging electricity industry participants to avoid scheduling any more maintenance work in the second half of November so it can maintain a sufficient capacity buffer.

A combination of transmission work and planned maintenance at power stations and at the Kupe gas field next month poses a risk of shortages in the middle of November if a large North Island generating unit also wasn’t available for some reason, the company says.

Should there also be weak wind conditions, reduced gas supplies, or both, those risks of shortages could extend into late November. They also re-emerge in February when Transpower is carrying out work on the high-voltage link across Cook Strait and First Gas will have the Ahuroa gas storage facility shut for maintenance.

“We advise participants not to schedule further outages on these dates where there is a risk of shortfall,” Transpower says in its latest monthly assessment of generation balances.

The state-owned business is charged with maintaining sufficient spare capacity in the system to ensure the lights stay on even if the largest asset on the network – such as a pole of the Cook Strait cable, or either of the large gas-fired power stations operated by Contact Energy and Genesis Energy – were to unexpectedly trip off.

To do that, it helps coordinate the hundreds of maintenance projects needed on lines, substations, switch yards and power stations around the country annually. It provides a monthly generation balance report to highlight any potential tight spots during the following six months.

Power companies and industrial users are already keeping a close eye on the planned work this summer, given the number that were stung by unexpectedly high power prices in October and November when tight gas supplies coincided with declining South Island hydro storage.

Maximum flows on the HVDC link across Cook Strait, which generally delivers power north from the South Island, will be reduced for 14 weeks by work Transpower has planned from early January. On four Saturdays there will be no inter-island transfers.

Gas supplies, following prolonged outages at the Pohokura field last year and early this year, remain tight and have kept power prices high most of this year.

Beach Energy, operator of the Kupe field, was scheduled to shut its processing plant today for a four-yearly, one-month maintenance check today. Part-owner Genesis plans to start an annual eight-day shutdown at its 400-megawatt plant at Huntly on Nov. 15.

But March-quarter electricity futures are notably higher due to the risk of unplanned gas shortages or some other generation not being available early next year. The Otahuhu contract settled at $148.25 a megawatt-hour yesterday, $27 more than the December-quarter futures.

The Pohokura processing plant was already scheduled for a two-week shutdown in March. Earlier this month, First Gas announced that it would be shutting Ahuroa – which supplies Contact – for two weeks from Feb. 8 for a four-yearly maintenance and inspection programme.

The week before, Pohokura operator OMV said it would also have to carry out an inspection and maintenance programme on the field’s offshore pipeline during the first and second quarters of 2020.

Given those heightened sensitivities, Transpower ran additional scenarios to test what would happen if there was no wind production, gas supplies were weak, or both.

The biggest risks were still in November, but they also appeared in the middle of February, when gas at Ahuroa can’t be accessed. They re-emerge in early April when demand is expected to be increasing and several generators will also be out of action.

Transpower noted that the inspection work being undertaken by OMV at Pohokura could result in additional unplanned gas outages.


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