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Electricity Supply Industry - Aurora Energy Limited

Electricity Supply Industry

Industry Governance

Until 1987, the New Zealand electricity sector was completely regulated and publicly owned. Between 1987 and 2001, the industry was progressively deregulated, with only "light-handed" regulation applying to weak competition areas. In 2001, overt regulation of line businesses by the Commerce Commission was introduced and regulations to allow Government management of the industry were passed. In 2003 Government appointed an Electricity Commission after the industry failed to self-regulate.

From October 2010, the Electricity Commission is to be downsized, renamed the Electricity Authority, and distanced from political interference.  Transmission investment moves to the Commerce Commission, and efficiency programmes move to the Energy Efficiency and Conservation Authority.


Electricity Generation & Retailing

Name Generation Capacity (MW)* Retail Customers*
Contact Energy Limited 1,940 418,400
Separated from ECNZ in 1996 and privatised in 1999. Major shareholder is Origin Energy of Victoria, Australia. Contact Energy also owns 100% of electricity retailer Empower Limited.
Genesis Power Limited  1,596 520,700
Trading as Genesis Energy, Genesis Power Limited was separated from ECNZ in 1999 and is wholly Government owned. In July 2001 it acquired the North Island customers of On Energy, when NGC exited retailing after heavy losses on the spot market. In 2003 it acquired Wellington customers of Freshstart when it exited that market for the same reason. Genesis Power also owns 100% of electricity retailer Energy Online Limited  
Meridian Energy Limited  2,488  226,900
Separated from ECNZ in 1999 and wholly Government owned. In July 2001 it acquired the South Island customers of On Energy, when NGC exited retailing after heavy losses on the spot market.  Meridian also owns subsidiary retailer Powershop NZ Ltd
Mighty River Power Limited  1,219  436,100
Separated from ECNZ in 1999 and wholly Government owned. Retails under the Mercury Energy brand, purchased from (now-named) Vector in 1999.  MRP also own the retail brand Bosco Connect.
TrustPower Ltd  451  226,400
Grew from rural electricity distribution origins. Exited the Christchurch & Wellington markets during the 2003 hydro shortage.
New Zealand Government  155  1
Not content with owning 3 generating companies (Genesis, Meridian and Mighty River Power, above), in 2003 the NZ Government decided to contract with the private sector to provide and operate a new power station, which the Government owns directly. Intended to run only as emergency reserve, the output will be bid into the wholesale market to try to cap prices during generation shortages.  
Others 314 50,000
TOTAL 8,517 1,949,500
  Data source: * Electricity Commission June 2010 stats.

The Wholesale Electricity Market

The wholesale electricity market operates under rules approved by the Electricity Commission, with the two key service providers being M-co Ltd which provides price bidding systems and the System Operator division of Transpower NZ Ltd which despatches generation and transmission facilities. Briefly, the market operates to a 30-minute price bid, 5-minute despatch, ex-post, nodal price model.


National Transmission

Transpower NZ Ltd is the owner and operator of the national transmission grid. It is a State Owned Corporation, with the Ministers of Finance and of State Owned Enterprises as the shareholders on behalf of the NZ Government.


Local Distribution

The Electricity Industry Reform Act 1998 limits to a maximum of 10% any cross-ownership between electricity distribution assets and either electricity generation or electricity retailing activities, although subsequent amendments have relaxed these requirements in relation to ownership of generation from renewable energy sources. The term Line Business is used to describe the separated delivery function. There are presently 28 distribution line businesses serving New Zealand's 1.93 million electricity users.

To view the relative size of New Zealand lines businesses, click here (PDF).


Industry Organisations

The Electricity Networks Association (ENA) provides lobby and advisory services to its 29 line business members.

The Electrical Engineer's Association (EEA) provides a forum for consideration of technical issues relating to electricity supply.

The Electricity Supply Industry Training Organisation (ESITO) is the Government-recognized body whose task it is to define and manage the skills and qualifications required by electricity sector employers, to meet the ongoing needs of the electricity industry.

The Energy Management Association is a technical group of the Institution of Professional Engineers New Zealand (see below). Membership is open to all people and organisations in the energy management industry, as well as catering for professional engineers.

The New Zealand Wind Energy Association exists to to ensure that the wind energy industry is fairly represented to the General Public, to Government and to other stakeholders in the NZ energy sector.


Government

The Ministry of Economic Development (MED), formerly called the Ministry of Commerce, manages the various statutes related to commerce and provides government with advice on matters to do with commercial activity. It consists of various divisions, including the following:

  • The MED Energy and Resources division advises Government on energy and related resource issues. Of key interest is the "Electricity Regulatory Framework".
  • The MED Electrical Safety division is the New Zealand regulator for the safe supply and use of electricity and gas.

The Ministry of Building and Housing oversees the Electrical Workers Licensing Group and the Electrical Workers Registration Board, which licenses electrical workers, monitors electrical safety and investigates electrical accidents.

The Ministry for the Environment has a particular interest in matters of electricity generation and efficiency of utilisation. The Ministry provides funding for the Energy Efficiency and Conservation Authority (EECA), a government agency set up to improve New Zealand's energy efficiency.

Standards New Zealand is the trading arm of the Standards Council, a crown entity operating under the Standards Act 1988.


Others

The Institution of Professional Engineers New Zealand (IPENZ) is a professional body that represents professional engineers from all disciplines in New Zealand.

The Centre for Advanced Engineering (CAE) was founded in 1987 as the centennial project of the University of Canterbury's School of Engineering. Dunedin Electricity was a founding contributor. CAE has a range of energy-related publications.