Seat of power gives few clues to chance of winter black-outs

Looming winter power crisis or no crisis? The best place for an answer, you might think, would be at the nation's premier energy conference.

Alas, it seems those attending "National Power New Zealand 2006" in Auckland yesterday were divided - when asked for a raising of hands roughly half seemed to think the country was heading for a winter of power supply problems while the other half were confident things were under control.

Stored energy in hydro lakes is around 70 per cent of average for this time of year, prompting increases in wholesale power prices.

Electricity Commissioner Roy Hemmingway's speech, The crisis that isn't - myths and truths about New Zealand's Electricity System, said the main myth was that there was not enough supply for winter.

"The chances are good we will not have a problem," he said.

This year was always going to be one of the tighter years for power supply, since Genesis' E3P new gas-fired power station comes online only at the end of the year.

Hemmingway said that although lake levels were down on average, they were still well above the "minzone", that level where historical inflow records showed there could be a problem.

Hemmingway, who came here three years ago after decades in the US energy system, said New Zealand's electricity industry was extremely pessimistic, despite the system standing up well against others in the world.

But Genesis Energy chief executive Murray Jackson and Meridian boss Keith Turner were not so confident about the prospects for this winter.

Turner, whose company operates the major hydro stations on the Waitaki River, said that if there was not some "serious rain" a "tight winter" was in store.

Jackson said his fellow chief executive, Turner, was "sitting in a very tenuous situation".

In the vote, Turner raised his hand on the motion that there would be no problems but Jackson was pessimistic.

Energy Minister David Parker, in his speech late in the day, said he had been advised that while the decline in hydro lake levels was "of concern", they were still well within the range "where we expect the normal operation of the electricity system to meet the demands on it".

Things would be much more comfortable next year, when the new Huntly station was working.

"This year, there will be more North Island thermal generation than on average and less South Island hydro. But I am informed that there is a low probability of the situation becoming dire this year. So while it's possible, it's unlikely," said Parker.

* The national power conference continues today, with Transpower chief executive Ralph Craven due to speak on the future of the national power grid.