NZ energy companies 'exploring options' for Huntly Power Station
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The news: New Zealand's four largest electricity generators have agreed to explore options to keep thermal units at Huntly Power Station operational for longer than planned, to support national energy security after the market experienced a "pinch point" on energy supply last winter.
The context: Genesis Energy, Mercury NZ, Meridian Energy and Contact Energy will investigate the potential for Huntly Power Station's rankine units to continue to play a "key role" in managing "dry-risk year", and enhance system security over a longer-term timeframe.
One of the units was scheduled to retire next year, while the other two were to be wound down in the early 2030s.
The companies said that the commercial structure is being worked through, including key terms such as pricing and cost. The structure may include a strategic fuel reserve to cover disruptions to other fuel supplies, as well as other arrangements.
The agreement could be extended to cover a term of up to a decade as the country sets about adding more intermittent wind and solar generation.
It is expected the new arrangements could be in place for 2026, subject to regulatory approvals, the companies said.
The agreement comes in response to the market conditions last winter. The companies said the market experienced a "pinch point" on energy supply due to a combination of a faster-than-expected decline in the national supply of natural gas, low hydro lake levels and low wind conditions.
The source: ASX announcement
