Power outage: Transpower not sure cause of insufficient generation, responds to communication criticism

Transpower does not yet know why there was insufficient generation available on Monday night to meet electricity demand, causing tens of thousands of properties to lose power.

Roughly 20,000 homes throughout central and eastern parts of the North Island on Monday night went dark after Transpower, responsible for the country's electricity transmission, warned generation had not met an all-time high in demand. 

"Insufficient generation has been made available to meet demand and manage a secure system. As a result, Transpower in our capacity as managers of the power system (the System Operator) has asked the distribution companies to reduce load across the country."

The lights were back on for most by 9pm, but the situation - which came on one of the coldest nights of the year - has left Kiwis puzzled about how it  could happen and why there was little communication until it did.

Speaking to The AM Show on Tuesday morning, Transpower operations general manager Stephen Jay apologised to those affected, but said the reason for the lack of electricity available to the system was not yet apparent. 

"We will need to look into why there wasn't enough generation available last night. There is normally some underlying reason in terms of why there is insufficiency out there. That is part of our ongoing investigation to look into that."

Jay explained that Transpower looks and asks for "offers" of generation from various sources around the country and then matches that in terms of what the demand will be. 

"A day ahead, we put out a demand forecast that shows what that demand will be and where the peaks will be," he told The AM Show. "The generators then offer their generation into the system and we then dispatch basically the most economic generation to meet that demand. 

Transpower predicts the peaks in demand in both the morning and evening, as people wake up and get ready for work and as they arrive back at home. Ensuring the electricity is transmitted requires management in real time, Jay said, and relies on a mix of generation as well as ensuring "all of that generation works when requested".

"There is a team in a control centre in New Zealand who manage that on a day to day, minute by minute basis and so we don't get a situation where there is an excessive amount of generation, more than demand requires, we match that generation with demand to ensure the system remains stable."

Jay said Transpower doesn't make orders for generation, but instead needs generators to make offers at certain prices. 

"It relies on the generators putting enough offers into the system to allow us as the operator of the system to basically request that that generation comes on." 

Another large peak in demand was predicted for Tuesday morning, but Jay said there was currently enough generation to meet that.

"You also have to take into account what happens if some of that generation doesn't operate as expected or what happens if demand is slightly higher or lower than forecast."

Going forward, as electrification ramps up, there is a need to ensure there is sufficient generation to meet demand, he said. 

"As that demand changes, if people buy electric vehicles, if industry is electrified, generation will need to be built and made available to be able to issue that generation then to meet that demand."

Stephen Jay.
Stephen Jay. Photo credit: The AM Show.

Bryan Leyland, a consulting engineer, told The AM Show: "It is quite possible it could happen again. Basically, we don't have enough generating capacity for excursions like this.

"It should be better than this. The system is not working well. We are short of gas, baseload generating power that is predictable," he said. "We don't have any plans. We rely on generators to produce new generation in accordance with the vagaries of the market." 

He said he'd been "worried that this sort of thing would happen for quite a long time", but building new generating capacity isn't easy, especially with hoops to jump through like the Resource Management Act.

Energy Resources Aotearoa - which used to be known as the Petroleum Exploration and Production Association of New Zealand - said Monday's power shortage shows the importance of natural gas as a "back-up". 

"Renewable energy is great but it can’t cope with current demand on a cold night. We are deeply worried over what will happen in a few years when electricity demand is even higher and natural gas supply even more precarious."

'All very last minute'

Questions have been raised about the lack of warning given to consumers about the insufficient generation and the possibility some could lose power.

Jay said Transpower works hard to ensure the right communication is sent out, but Leyland says the consumers always appear to be the last to be warned. 

"We communicate very formally to the market participants, the generators, the distribution businesses, the direct connected generation and the direct connected industries," Jay said.

"They have channels of communication down through the retailers to the consumers. We will have to work with the industry to make sure that chain of communication works but it is very formalised, from the national control centres out there in terms of what is going on."

A Customer Advice Notice was issued at 6:42am on Monday morning advising of low generation.

"If system conditions worsen, it could result in a [warning notice] or [grid emergency notice] being issued due to insufficient offers being available to cover for the largest contingency or meet demand and maintain frequency keeping reserve."

That's eventually what happened in the early afternoon and then in the evening. 

"This is a New Zealand wide emergency," one notice said just after 5pm. "There is Insufficient Generation offers to meet demand and provide for N-1 security for a contingent event. The level of instantaneous reserves being scheduled may or will need to be reduced."

However, most Kiwis didn't become aware of the issue until the power began going out in some North Island regions or electricity distributors began sending out alerts. 

"This seems all very 'last minute'," one person said on Transpower's Facebook. "We expect better of a major corporation, particularly in control of such a valuable and necessary asset that impacts the whole country. Where are the systems and processes that should have identified this issue months ago? Is there any forward planning? Is there a business continuity plan? Extremely poor."

Transpower responded to that by saying a warning notice had been issued to electricity market participants in the early afternoon. 

"This will have been the earliest we would have known about it too. Remember this is an electricity market that has to respond to demand and generation changes 24/7. Of course, we could not forecast today’s usage or generation capacity months ago."