Annual Planning Report 2012 - Transpower

Chapter 2: Facilitating New Zealand’s Energy FutureSome forms of renewable generation have less than the hydro or thermal plantwhich they displace. This reduction in system inertia will increase the need forinstantaneous reserves.Wind and other forms of renewable generation could also provide instantaneousreserves if they ‘spill’ some of their ‘fuel’, so an instantaneous increase in generationoutput is possible (up to the maximum level of ‘fuel’ input) if required. The ‘fuel spill’comes at a cost of decreased efficiency, but this may be more than balanced by theinstantaneous reserve costs. Similarly, wind and other forms of renewablegeneration can provide “pseudo interia”. This is achieved by allowing the windturbines to slow down or speed up during changes in power system frequency.It is possible that there will be an economic imperative for wind farms and otherrenewable generation sources to provide instantaneous reserves and pseudo interiain future. This is especially likely if enough new geothermal and wind farm generatingstations are built so that during low load periods most hydro and fossil fuelled powerstations are off.2.3.3 Balancing generationThe power system must be continuously operated to balance supply and demand forelectrical energy. However, wind and some other forms of renewable generation areintermittent or cannot have their outputs readily controlled. This places extrademands on the real-time operation of the power system, as some overseas utilitiesare experiencing with wind generation supplying close to all overnight load.One strategy to manage the diverse characteristics of generation is to implementAutomatic Generation Control (AGC). AGC, already used outside New Zealand, is awide-area control to change generation output on a near continuous basis. One useof AGC is to balance the output from variable generation by changing the output fromdispatchable generation.It is also expected that more use will be made of demand-side response to balancegeneration. This will develop as technology advances and markets mature.2.4 When do we invest?The underlying principle for transmission investment in New Zealand is that thetransmission investment should provide the best net benefit.Transmission Tomorrow identified existing and future drivers, including technology,which may or will shape the grid of the future. These technologies increase theoptions available for enhancing the grid where necessary.Demand-side response may be particularly useful for reducing the cost of newinvestment. Many projects are commissioned ‘early’ to account for the year-to-yearvariability in peak load growth and the risk of project delays. Demand-side responsehas the potential to cover this uncertainty, allowing new investment to be deferred fora few years.Demand-side response may also be very useful to manage outages for maintenance,either maintaining security during the outage or avoiding the need for additionalinvestment to allow maintenance outages.It is important that we maintain options like using demand-side response to deal withthe unexpected. Transmission planning is often said to be about minimising themistakes from being wrong about the future. Developing our options whether by wayof technology, future corridor protection or demand-side initiatives will help ensurethat tomorrow’s consumers will have a fit-for-purpose transmission grid at the leastpossible cost.222012 Annual Planning Report © Transpower New Zealand Limited 2012. All rights reserved.