Lines Company in New Zealand Demands More Certainty Over Diesel Generators

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Thousands of people who live in the Far North region of New Zealand could potentially be facing frequent ‘Third World’ blackouts if Top Energy are not able to use the diesel generators to help power the area.

Top Energy, who run and control the lines in Far North, supply electricity to around 31000 people. They recently secured a 30-year exemption on their geothermal operations, including their new plant in Ngawha. However, they have not been able to get an exemption allowing them to run their diesel generators.

The chief executive of Top Energy, Russel Shaw, has stated that if Top Energy are not able to get an exemption on the use of diesel generators then there will have to be eight planned outages throughout a year lasting 8 hours each effecting about 12000 customers. The customers effected would be from Kaitaia to Doubtless Bay and would go as far north as Cape. Top Energy aim to keep customers on supply and do not want to have to resort to cutting them off.

Under electricity regulations in New Zealand, if a line company produces more then 50MW of power then they must split off the generation side of its business into a separate company. Splitting the company like this isn’t necessarily that easy and can lead to increased costs of $2 million (£1 million) which in turn increases the price customers must pay.

The Electricity Authority granted Top Energy a 10-yearSA exemption back in September 2017. This allowed them to run its distribution businesses and power generation all under one entity. This exemption was renewed in 2019 so that it would last an extra 30 years.

The Far North currently has a peak power consumption of around 75MW.

There are only two power plants in the Northlands region. The geothermal plant in Ngawha which generates 25MW and a relatively small hydro station in Wairua.

Once the $182 million geothermal plant is completed by October 2020 it is hoped that it will be able to generate 56.8 MW of power. Top Energy also have 2 diesel generators in both Taipa and Omanaia which combined produce 3.65 MW and 3MW respectively. Further to this they also have an extra 10 diesel generators in two different places in Kaitaia that are already onsite and are expected to be running by the end of February this year. These diesel generators will produce a further 12.5MW.

Top Energy have applied for an exemption on their diesel generators, however so far, they have no indication on how long the process will take or even if they will be granted the exemption on their diesel generators.

Mr Shaw has said that this situation has left the company with huge levels of uncertainty, especially as they have already spent $20 million on buying and installing the generators but at this moment in time do not know if they will be able to use them.

Mr Shaw and the local MP for the area want a local bill to be passed so that there could be a certainty given to the residents of Far North that they will receive resilient, reliable and affordable power.

The bill already has support from the Mayor, John Carter, and the district council of Far North.

However, Mr Shaw believes that the bill shouldn’t need to be there in the first place and that it highlights an issue with the national regulation if a local regulator ends up over ruling it.

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