Low lakes pose risk of power cuts

The security of the electricity supply is on a knife-edge and power cuts are possible this winter.

Energy Minister David Parker yesterday admitted the supply situation was becoming dire, although he still believed the country would get through winter without blackouts.

Earlier yesterday, however, Meridian Energy chief executive Keith Turner told a select committee at Parliament that New Zealand would avoid cold showers and brown-outs only if nothing else went wrong.

"It is a very fine margin, finer than I have seen it in my career," Turner said.

He has spent the past 39 years in the electricity industry.

"There is no question that New Zealand ... has under-invested in the (electricity) grid for 20 years," he said.

Turner's concerns reflected lower-than-usual lake in-flows, the Cook Strait cable reduced to one working cable, the Huntly power station not operating at full capacity because of cooling issues, and the closure of the New Plymouth power station because of asbestos.

"I think there is a very clear interest in capacity -- how many megawatts we have to meet demand -- and the lake levels in the South Island are going to be a key contributor to the total energy available," Turner said.

One suggestion being considered was reducing demand on the grid with ripple control on hot water and paying large users such as Comalco to shut down voluntarily.

In Parliament, National's energy spokesman, Gerry Brownlee, slammed the state of energy security, saying it had been run down over 20 years to a point of near-collapse.

The country was heading for "cold showers, no heaters, and industrial shutdowns" if nothing was done, he said.

Parker said he did not think it would come to that.

Much would depend on whether one of the two Cook Strait cables, Pole 1, out of commission since late last year, could be restored in time for winter, Parker said.

But he revealed the Government had been "somewhat surprised" by Transpower's sudden decision to pull the plug on the cable, which he said occurred just 24 hours after he had been assured it was operational for years to come.

"I don't think it is acceptable that within 24 hours we had a change from an important part of the electricity infrastructure being available for many years, to being retired at the end of that week, albeit on a temporary basis," Parker told Parliament.

Asked if he agreed with Turner's comments on the security of supply Parker said he did.

"I do agree with Dr Turner's comments but I also reinforce the point that, notwithstanding the very unusual coincidence of adverse events happening at once, the system is coping," Parker said.

He denied, however, that the Government had allowed the system to be run down.

"There are unprecedented levels of investment in both transmission and generation."

Parker said Transpower expected a decision on restoring the link would be made soon.

The Electricity Commission was still awaiting an application from Transpower.

Transpower shut down Pole 1 in December after an insurance report said it was so degraded it could not be insured against "catastrophic failure".

The report warned a major failure of the cable was likely within "a few months rather than years" and could cause a massive hydrogen explosion, mercury vapour fallout, or fires and oil slicks.

Last year, Parker announced a ban on the construction of any new fossil-fuelled power plants for the next decade, as a part of the Government's new commitments to combating climate change.

However, plans are afoot to rehear an application for a new gas plant near Auckland now that supply security is at risk.

An industry working group is also considering importing 100 container-sized diesel generators to avoid blackouts in the winter in the North Island.

South Island lake levels are down to about 78 per cent of average because of drought.