Power outages: Megan Woods wants to know if Genesis kept generation low to boost profits

Energy and Resources Minister Megan Woods is seeking assurances from the country’s power companies that they were not trying to keep prices high by generating low amounts of electricity.

Woods said if there was evidence that the generators were withholding supply for profit, it would not be a “tolerable situation”.

Woods said the power outages experienced by many New Zealanders on Monday night were a result of “commercial decisions” made by the electricity companies.

She said the country had enough electricity generation capacity to meet demand, but “commercial decisions” were made across the electricity sector not to bring that generation online.

“This wasn’t a physical constraint of generation.

“We did have the ability to physically generate the amount of electricity that we needed to keep the lights and the heaters on for New Zealanders last night but commercial decisions were made not to,” Woods said.

Some blame had fallen on the shoulders of Genesis Energy, which did not bring additional electricity generation into the market, particularly from its coal-fired Huntly power station, which is often used to manage big peaks in the electricity system.

Woods would not say whether she thought Genesis had kept generation offline to keep electricity prices high.

“That’s a question you need to put to Genesis,” Woods said.

She said she had written to all chief power generatorchief executives, including Genesis, saying there would be sufficient electricity generation.

Woods said she would also seek assurances the market would continue to generate enough electricity.

“I will be asking further questions about why that decision was taken,” Wood said.

“I don’t think that is a tolerable situation. I think if we did have a situation where there was such a constraint of the generation of electricity in New Zealand and New Zealanders could not be sure of their ability to keep the lights on and the heater on then we have some serious questions,” Woods said.

A spokesperson for Genesis said that an unusual combination of both too much wind and too little wind meant that it was not generating as much electricity as it had hoped.

At the Tokaanu hydro project, “gale-force winds earlier in the day pushed weed into the intake”, resulting in less generation capacity.

This was followed by “a sudden decline in wind in the evening that affected central North Island wind generation – including Waipipi wind farm”.

“As weather conditions improve we expect the issues [at] Tokaanu to be resolved and demand to fall to more normal levels.” the spokesperson said.

Genesis said Huntly did not bring on additional capacity by turning on its third coal-fired Rankine unit, because each unit takes several hours to turn on.

Because the issues at Tokaanu and on the wind farms occurred suddenly, Genesis said it would not have had enough time to fire up the Rankine unit to meet additional demand.

Transpower, which manages the overall electricity network, also came under fire from Woods for failing to forecast the amount of load that needed to be shed from the network to keep it functioning.

This led to something of an overreaction.

“There was an overestimation by Transpower of how much needed to be shedded.

“The number they were putting out to the distribution networks, to the lines companies, was that 2 per cent needed to come off. It seems like that was probably double the estimate of what needed to be shedded,” Woods said.

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