KEY POINTS:
The electricity industry has a 1000MW gap to close if the lights are to stay on this winter.
Genesis Energy chief executive Murray Jackson, appearing before Parliament's commerce select committee yesterday, said peak demand right now was 1700MW or 25 per cent lower than peak demand in the
middle of winter.
Some 630MW of the difference should be met when Contact Energy's Taranaki combined-cycle gas plant comes back on line in about four weeks after an overhaul.
One of Genesis's four 250MW coal-fired turbines at Huntly, which is also undergoing maintenance, should be available by winter too.
"But you've got to find another 1000MW in your hydro reserves," Jackson said.
"It's a challenge."
He was speaking against a background where, even in late summer, the system is often tight.
At several times and several places in the grid over the past week, the wholesale price has topped $200 a megawatt/hour, which is the price that triggers the 155MW emergency reserve plant at Whirinaki, which was built after the 2003 dry year.
The hydro lake levels are similar, and inflows worse, than at the same time in 1992, which was a crisis year.
On longer-term security of supply issues, too, Jackson sounded a cautionary note.
Citing figures from Shell and the Ministry of Economic Development he outlined projections for supply and demand for natural gas which showed a shortfall emerging by 2015 of 60 petajoules or more than a third of expected demand.
"Our colleagues in the upstream sector have got acreage at various stages of exploration. But there have been no discoveries yet which would enable you to say we have got another Pohokura or Maui [field] on our doorstep."
The projections include Maui continuing to produce until 2014. But it had once been expected to cease production in 2009.
"That can still happen. It could water out any day," Jackson said.
State-owned Genesis is pressing ahead with a bid for consents to develop a gas-fired plant at Rodney, notwithstanding a government ban on new baseload thermal power stations over the next 10 years as part of a policy to have 90 per cent of electricity generated from renewable sources by 2025.
The moratorium does not apply to peaking plant built to provide reserve capacity for when renewable plants and the existing thermals cannot meet demand.
Jackson said the company was investigating the possibility of building an 160MW open cycle gas turbine peaking plant. Such a plant might could later be upgraded to combined cycle one, suitable for baseload generation, by adding a steam turbine to use the waste heat from the gas turbine.
Meanwhile, the commissioning of the e3p combined cycle gas plant at Huntly last June had seen the company's carbon emissions drop by nearly a third or 900,000 tonnes over the second half of 2007.
Genesis is investigating the potential for geothermal development south of Lake Taupo and has started talking to landowners about sites for wind farms.
Its target is to add 300MW of renewable capacity to its generation portfolio by 2015.
On the demand side Jackson said Genesis had been talking to manufacturers of domestic appliances.
"You could possibly time out refrigerators between 6pm and 8pm which would reduce peak demand in Auckland alone by 200MW.
"It's the next step from ripple control."
