Preamble
1. The electricity industry in New Zealand administered by the Ministry of Business, Innovation and Employment. This Ministry monitors the Electricity Authority on behalf of the Minister of Energy and Resources. The Electricity Authority is an independent Crown Entity which was established in November 2010 under the Electricity Industry Act 2010.
2. The Electricity Authority has the role of governing the electricity market under the Electricity Industry Act 2010, which authorises the making of regulations and a variety of rules for the electricity sector. In particular the main statutory objective of the Electricity Authority is to: Promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers. In addition, it has an additional objective which is to: To protect the interests of domestic consumers and small business consumers in relation to the supply of electricity to those consumers.
3. Within this policy framework the arrangements between the policy and the consumer are the electricity generators, which are responsible for providing sufficient power to the electricity system, and in this regard New Zealand has committed to a target of net zero greenhouse gas emissions by 2050 (excluding biogenic methane). The New Zealand government have acknowledged that in order to achieve this target it will require: a) Increased electrification of sectors of the economy, such as transport and industrial processes; and b) Meeting increased electricity demand with renewable electricity generation.
4. The next organisation in the chain deals with the power system operation which in New Zealand is done by a System Operator. The System Operator is a market operation service provider which is responsible for the real-time coordination of New Zealand’s power system.
5. In New Zealand, Transpower is a transmission network asset owner which is responsible for planning, building, maintaining, and making available for use its transmission network. In addition to this it is also the System Operator, and legislation is in place which separates these two functions.
6. Under this at a regional level there are 29 electricity Distributors which connect the transmission network with consumers and smaller electricity networks. In Auckland there is one of these organisations, Vector Ltd, which has this responsibility. In common with the other 28 electricity distributors Vector Ltd is the distribution network asset owner and it plans, builds and maintains the electricity distribution and supply assets for its designated area.
7. At the final end of this arrangement there are what is known as Line Companies in New Zealand which in conjunction with the electricity Distributors provide the interface with consumers
.8. This Assignment is primarily concerned with Auckland’s electricity Distributor (Vector)and the management of its extensive programme of work described in its asset management plan for the period 2024 to 2034. The current position 9. The New Zealand Electricity Authority has recently published a consultation paper on the future operation of the power system. In its executive summary it makes the following observation: Power system operation in New Zealand dates from the late 19th century.
Over the decades it has evolved to respond to technological changes in it electricity demand, and higher expectations of a reliable electricity supply. We now benefit from sophisticated and complex system operation in the delivery of a secure, reliable and efficient electricity supply.
But New Zealand’s electricity sector is beginning and unprecedented transformation, as the country’s transition to a more electrified economy. This will have a significant effect on power system operation.
Part of this power system operation of course is the arrangements for upgrading, enhancing, duplicating and replacing much of the existing underground and overground delivery arrangements immediately prior to the consumer meter. This is the substance of this Assignment
. Assignment overview:
The future operation of New Zealand’s power system: Consultation paper a) The reference in paragraph 13(a) is an excellent background document for anyone not familiar with national programmes of power generation and particularly distribution. Whilst this is a consultation paper, the front end of the document does provide the reader with a very clear overview about how the arrangements works in New Zealand. 3 b) This is also a good example of a report which takes the opportunity to reference similar characteristics with a more global perspective. This is contained in Appendix C of the consultation paper, and whilst reading it is not essential in order to answer this assignment, if you do get the time, it provides you with an invaluable international perspective on the way in which other jurisdictions deal with this kind of problem. It was compiled by Ernst & Young, an organisation which I worked with in both the UK and in Moscow, and for those of you are not familiar with the kind of things which these large international consultancies deal with than this is yet another good example. c) I suggest that you concentrate in particular on the Drivers for Change which are referred to in section 4 at page 25. Whilst the assignment concentrates largely on Key Driver 6: Electrification of the Energy System, do not be put off by this rather complicated sounding title. The introduction to what you will be going to be doing on this assignment is largely contained on page 34 and 35, but at a local level. d) The distribution network referred to in paragraph 4.52 on page 35 is the area in which you will be focusing in order to complete this assignment. The distribution network upgrading and investment is the subject of the Vector Electricity Asset Management Report which I refer to next. 12. The Vector Electricity Asset Management Plan 2024 to 2034 a) The Vector Electricity Asset Management Plan 2024 to 2034 is I suggest your main source of information and dare I write it: inspiration. This report is a long document and there are several reasons for suggesting that you should look at it in a fairly structured way. As part of your education in this field, and by that I am not referring to the electricity industry but industries such as this more generally, is the broad scope of the coverage which the report deals with in an excellent way. b) The quality of this report reflects an organisation which clearly knows what it is about, it is written by people with confidence in their knowledge and experience, and is a rather good object lesson I think for all of you who are aspiring to move into a more general management field at scale. c) For this Assignment look at the Growth and Security Projects section at section 10a. You will find this on page 133 onwards and you will note that it is divided into 14 geographical areas. I suggest that you choose 2 or 3, or more if you choose, adjoining areas and look at the work required, both physical and land acquisition and design and so on and begin to map out the design of a programme of work along the lines described in the coursebook. d) For example, Wellsford, Silverdale and Albany might fit well together in terms of geography but nonetheless still spread out. You are also required to design the basis of the delivery of this work for all 14 areas as an integrated whole.
Deliverables:
Design a programme of work to include the decision-making process, land purchase, procurement, design and delivery for the;
a) The 14 geographical asset areas taken as a whole and which have been identified by Vector;
b) Design a more detailed programme of work for two or three (or more if you wish) geographical asset areas;
c) Identify the critical success factors you would use;
d) The overall and more detailed governance arrangements which you would require; and
e) Your approach to risk and the risk profiles which you would adopt. Recommend References 14. The basis of this Assignment is contained in a number of documents, and the most significant of these are: a) The future operation of New Zealand’s power system: Consultation paper (Electricity Authority, February 2024).
https://www.ea.govt.nz/documents/4479/The_future_operation_of_New_ Zealands_power_system_.pdf b) The slide set which accompanies the Electricity Authority’s Consultation Paper; c) Vector Electricity Asset Management Plan 2024 to 2034
https://blob-static.vector.co.nz/blob/vector/media/vector2024/electricity-asset-management-plan-2024-combined-finalupdated.pdf d) Electric Homes Technical Report (The Energy Efficiency and Conservation Authority, March 2024)
https://storage.googleapis.com/downloadswebsite/Electric%20Homes%2 0-%20Rewiring%20Aotearoa%20-%20March%202024.pdf Prof Ray Payne GSE Faculty of Engineering The University of Auckland 4th April 202