Submission on the proposed reliability obligation to manage dry-year risk
Image source: Robert So, Pexels
The Commissioner has suggested the Government take another look at options for managing dry-year electricity risk, arguing that potentially cost-effective alternatives were excluded too early in the process. In a submission on the proposed Winter Energy Reliability Obligation, he questions why the suite of options available were not assessed within a robust cost-benefit or multi-criteria framework.
The submission also calls for a review of the modelling assumptions that underpin New Zealand's electricity security of supply assessments if the proposed obligation proceeds. While supporting further work to strengthen dry-year resilience, the Commissioner questioned why public procurement of LNG infrastructure is needed alongside a reliability obligation.
“I agree that an intervention like the proposed reliability obligations could help to improve incentives for investment in dry year risk management... However, it continues to be unclear to me why public procurement of LNG infrastructure is necessary in addition to such a policy.”