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Transpower’s charges to Mid Canterbury (affecting EA Networks customers) have increased by $10.2 million for the 2019/2020 financial year. Electricity network charges have also increased because of this. For farmers who irrigate this equates to an increase of approximately 40% (about $5,000 per 100kW per annum), though all Mid Canterbury electricity customers are affected by the charge.
The increase is the result of high summer time peak energy demand, driven by irrigation demand during December 2017, combined with industry regulations that require Transpower to use peak energy demand to allocate costs to each region across New Zealand. Transpower do not get an increase in revenue because of this movement – it is simply a reallocation between regions based on the relative energy demand between each.
Reducing summer time peak energy demand is the best way to lower Transpower’s network charges in the future. Voluntary day time reduction of some irrigation energy demand (where possible) is essential to achieve this. We are asking all irrigators to participate in voluntary electricity load control management on their properties to help reduce Mid Canterbury’s peak energy demand each irrigation season.
This is a serious matter, with over $10 million of additional costs leaving our local economy this year. We look forward to working with you to try and reverse this in the years following and beyond.
Transpower is regulated, and the way it allocates its ‘interconnection charges’ based on peak energy demand across New Zealand is prescribed by regulations. Regions that demand more energy at peak times are allocated their greater proportional share of Transpower’s charges.
Historically peak energy demand has occurred during winter. During winter Mid Canterbury’s energy demand is typically around 5% of the Upper South Island’s total demand. This means Transpower would allocate 5% of their group interconnection charges to Mid Canterbury.
However, due to increasing summer time energy demand, summer peaks can occur. When they do, Mid Canterbury’s share of total energy demand increases to 20%. The increase compared to winter is due entirely to irrigation use in the region. As such, when summer peaks occur, Transpower allocate Mid Canterbury a proportionally higher share of their interconnection costs.
For this financial year, Transpower are allocating $14.5 million in charges to Mid Canterbury because of the summer peaking issue.
Weather is the primary factor that determines winter vs. summer peaking events. A summer with good rainfall and lower temperatures, followed by a cold winter, will typically result in a winter peaking situation (lower costs to Mid Canterbury). Counter to this, a hot and dry summer, followed by mild winter can result in a predominantly summer peaking situation. This is a poor outcome for Mid Canterbury since summer peaks drive higher Transpower charges.
Only through reducing energy demand at peak times can Transpower’s costs be reduced. In Mid Canterbury this can only be achieved by reducing irrigation demand during certain times.
Active steps can be taken to reduce the likelihood of summer peaks. Reduction in peak energy demand is most important during the following conditions:
Irrigation energy demand across Mid Canterbury can be as much as 140 megawatts (MW). We are seeking to reduce this to 90MW (or less) during the days and times recommended. This represents an energy demand reduction of about 35% across the district.
Reduce any non-essential irrigation use on your property between 8am and 8pm Monday through Friday during peak periods during a hot, dry summer season..
So that you can get lower network charges in the future.
Transpower’s charges can only be reduced if collectively Mid Canterbury’s energy demand is reduced during summer. This can only be achieved if irrigation demand is reduced, either naturally through rainfall/lower temperatures OR through active reduction on-farm by you.
By reducing irrigation demand, and in-turn collectively reducing Mid Canterbury’s energy demand, our region will be best placed to get lower charges from Transpower.
You are best placed to determine which, if any, irrigation demand can be reduced during the periods that we recommend. For non-resilient/critical crops it may not be possible to reduce irrigation – this is OK since we are not seeking to reduce all irrigation demand, just 35% of the total and only during specific times/periods.
We have developed a schedule that details when we recommend that you reduce irrigation demand on your property, which will be updated for each peak period and posted on this page. Outside of these times/days you can freely irrigate to the fullest extent since there is little risk of a summer peak occurring.
For more information please contact us on 0800 430 460 or email firstname.lastname@example.org