More water may be taken from hydro lakes like Pūkaki. Photo: Susan Rebergen
- Transpower is allowing generators to take more water from hydro lakes in September and October if needed to combat the risk of a power shortage
- Hydro storage is at 55 percent of the average for this time of year, among the lowest levels in around 90 years
- The national grid operator is not ruling out a campaign to encourage power conservation in the new year, if things get worse
Some of the country's biggest electricity generators say they hope not to use more water from South Island hydro lakes - despite a move allowing them to access contingent storage.
It comes after Transpower announced generators can take more water from lakes Pūkaki, Tekapo (Takapō) and Hāwea during September and October if needed, to help stave off an electricity shortage.
Meridian chief executive Neal Barclay welcomed the move and said it had effectively doubled its available hydro storage.
"The lakes, particularly Meridian's two catchments in Fiordland and the Waitaki have received the least amount of inflows into the lakes in the last three months that we have ever seen, they have got to very low levels."
Barclay said it could now access another five metres of water at Lake Pūkaki - which would provide around 500 gigawatt hours - but he hoped it would not need to be used.
"We are still being very cautious with our hydro storage, we actually want to avoid using the contingent storage if we can. At this stage it looks like, if inflows didn't come as they were seasonally forecast and we continue to have this extended drought, probably the earliest we would be looking at is October."
He said Meridian had sought to access lower lake levels during a dry winter more than a decade ago, but it was able to manage through what was then, the driest winter on record.
"We did get this contingent storage level consented, originally back in 2012 and then it got improved in 2016 so what Transpower have done today is just clarified some ambiguity in the rules in terms of when that storage is available."
Meanwhile, Genesis Energy's chief executive Malcolm Johns said Transpower's sudden change to the rules could cost generators who had already purchased more expensive fuel to protect its customers from volatile prices.
"We've put $160 million more into fuel in the last 12 months, we have just done a deal with Methanex, we have just ordered substantially more coal, we feel that we are carrying probably more than our fair share of the burden of delivering energy to New Zealand."
Lake Tekapo was currently at 704.8 metres above sea level, and Genesis said the minimum operating level for this time of year was 702.1 metres above sea level - and it planned to continue operating within that.
It would continue to reassess access to additional storage in Lake Tekapo in the coming weeks, taking into account drivers such as rainfall and snowmelt-driven inflows into the lake, while responding to short-term risks to national electricity security of supply, and prudently managing long-term security of supply risks across its generation portfolio.
A spokesperson for Contact Energy said it was not expecting to access the additional two-metre range at Lake Hāwea for electricity generation.
It had purchased gas from Methanex to keep its Taranaki Combined Cycle gas station operating at full capacity through to the end of the year and it also supported the market through the diesel fuelled Whirinaki Peaker Plant, in Hawkes Bay.
Transpower's executive general manager of operations Chantelle Bramley said the move "buys us time for it to rain" and gave generators another two months of electricity generation.
"If conditions continue to deteriorate and we do cross into that emergency level we then move into the next stage of our preparedness to manage dry year risk and that is when we would see the need to tick off things like official conservation campaigns."
Transpower must organise an conservation campaign if hydro lake levels fall below what is known as the emergency risk curve and there is a 10 percent chance of running out of energy in the next 12 months.
Bramley said it was not forecast to get to that stage, until early next year.
"We are still in cold temperatures, the load is still high, we don't want people conserving electricity at this stage, when they still need to use power to heat their homes."
Energy economist Stephen Poletti said New Zealand was facing an electricity crisis and the government needed to direct investment in new energy generation, as was happening in Australia.
"I support Transpower's decision, but is really the ambulance at the bottom of the cliff, there has been systematic under investment in new renewables over the the last 10 years, they have prioritised dividends and profits over investment."
He said wholesale electricity prices had been high for a number of years.
Poletti said the state governments in Victoria and New South Wales were deciding how much investment in renewable energy generation was needed each year to meet its decarbonisation targets and were putting them out for tender.
With several weeks of wet weather in the forecast, a reprieve could be on the way.
NIWA meteorologist Chris Brandolino said much of the South Island had less rainfall than usual this winter, like Queenstown which had less than half its usual rainfall since 1 June.
"For some places that goes back to March when autumn began so we are talking several months where rainfall has been inadequate across several locations in the South Island."
He said the country was likely to experience stormy conditions, bringing rain and wind, from today into the coming weeks.
"As we work our way through the rest of the month of August into the spring season and the start of September we are going to see a very active, energised atmosphere so a lot of rain for these catchments."
