The impacts of generation mix on New Zealand’s susceptibility to dry year shortages
After the commencement of the New Zealand Electricity Market (NZEM) in October 1996, generation expansion was made based on the wholesale electricity prices rather than through coordinated government planning. Since then, the installed generation capacity in New Zealand has been observed to follow a bust and boom pattern, resulting in energy shortages during dry winter years. A System Dynamics (SD) model has been developed to study the bust and boom trend. The model is then extended to evaluate the impacts of generation mix on New Zealand’s susceptibility to future dry year shortages under the current market mechanism. The evaluation takes into account New Zealand’s main storage lake cycles and the El Niño-La Niña Southern Oscillation (ENSO) phenomenon. Dry year occurrences have a major impact on the electricity supply in New Zealand due to its high reliability on hydro. Its effects vvary under different generation mix. This paper discusses the impacts of the different generation mix under five different future generation scenarios proposed in the Statement of Opportunities 2008(SOO2008). It then highlights any potential problems identified by the study.
