Transpower chairman Keith Turner. Photo / Dean Purcell
What New Zealand needs is more power, says Transpower's new chairman Keith Turner.
The state-owned national grid operator has offered a mea culpa for last year's August 9 incident, which resulted in thousands of customers being disconnected on one of the coldest nights of the year.
A review found the root cause was a shortage of generation due to the combined effect of planned outages, the lack of market pricing signals to encourage the offer of available slow-start thermal generation and, finally, the unexpected loss of hydro and wind generation.
Transpower's operational procedures, communication and error in demand allocation exacerbated the issue, resulting in some additional households losing electricity for a short time that evening, said the review.
Transpower has two roles: operating the system and maintaining the grid - the pylons and the cables.
As system operator, its job is to communicate with the generators to ensure there is enough power in the system.
For Turner, this is what he calls a knife-edge - matching supply with demand. Too much power, and the system speeds up. Too little, and it slows down.
Transpower issues what are known as Customer Advice Notices (CANs) to its generators when it looks as though a shortage is looming.
Last month it issued a notice to give generators a hurry-up to ensure a 200 megawatt buffer remained in the system.
Earlier in the month it issued a "grid emergency" after Contact Energy's 105 megawatt peaker generator at Stratford failed to start, one of Genesis Energy's units at Huntly had to temporarily reduce output by 150 megawatts and wind generation dropped off.
Normal power supply was maintained throughout both events.
The industry views notices as a successful way of managing the system. But does August 9, and the notices issued since then, mean New Zealand needs more generation capacity?
"Absolutely we do," Turner says. "I think we are living on borrowed time - even right now.
"The events of August 9 - and the number of CANs, the number of grid emergency notices that are being issued - they are a sign to me.
"I can clearly see that in the system.
"We don't have enough spare capacity or redundancy and we have the wrong mix of plant.
"We can't rely on the [thermal powered] Huntlys to start up quickly and we are not able to start them up without plenty of notice, so there are some serious risks in our plant."
With a CV in the electricity industry that is a mile long, Turner clearly knows what he is talking about.
At 72, he has packed a lot into his career in the electricity sector, both here and in Australia.
Much of the New Zealand industry's architecture can be put down to Turner.
Going back, he was part of the New Zealand Electricity Taskforce in 1989, which laid out the blueprint for industry reforms. Turner was also a founding director of the electricity market company Emco, set up in 1993 to establish the New Zealand electricity market.
For nine years he was chief executive of Meridian Energy, the country's largest power generator. The list goes on and on.
He's an engineer through and through.
Energetic and quick with a laugh, Turner speaks of a bygone, seat-of-your pants era, and tells anecdotes that perhaps only engineers can truly appreciate.
Right from the start, electricity has been his overriding passion. Turner sees the sector as being the foundation of a modern society.
"We take for granted what electricity does, yet it makes 2.5 per cent of GDP and supports the other 97.5 per cent of GDP. Without it, we wouldn't have any GDP at all.
"It is profound. It's fundamental and to me it's as important as land, air and water."
He set up Contact Energy in 1995 and was involved in the breakup of the then state-owned Electricity Corporation of NZ in the mid-1990s, a process that later gave rise to the formation of Mighty River Power, Meridian and Genesis.
There isn't much he hasn't done in the electricity business but Turner says he's still learning.
"The industry is at a stage where the future is incredibly exciting because up until the 90s reforms, the sector was very stable in a common institutional form, common around the world."
Now, the system is transforming to more wind and solar on the generation side, with more electric vehicles on the consumer side.
On top of that, Turner says the great transformation will be in the technology that is available to consumers. Or as he puts it, "automated decision-making and artificial intelligence in the end-use space."
Turner says the DC power link between the North and South islands is enormously important for New Zealand. "The ability for power to flow both north-south and south-north is critical.
"It will become even more important as the system becomes more wind and solar dependent because the intermittent nature of wind and solar means that the power flow is going to be going around the system in multi-directions."
The current system, built in the 1950s, was intended to be uni-directional - from the big generators to the load.
"Now, we have got power going backwards and forwards, depending on the wind and the solar, so the network is becoming more multi-directional and is getting a lot more connections."
Today's grid was built in the 1940s, 50s and 60s.
"Our first priority at Transpower is to ensure that it is looked after, so we are going through what I would call a mid-life, end-of-life refurbishment and rebuild."
Today, New Zealand produces 40 terawatt hours a year of power but Transpower modelling points to a need for 70 terawatt hours in 30 years' time - mostly as a result of decarbonisation.
"Transport is going to be a big chunk of that - and industry," says Turner.
"Economic growth is going to be driven by electricity supply, more so than gas or coal. So natural GDP growth is going to be fuelled more by electricity than it has been by fossil fuels because of decarbonisation."
Decarbonising is going to put more pressure on its Transpower's ageing power grid, "so the duty on our 70-year-old transmission system is just going to go up."
Transpower's priorities are first to look after what it has, and to give it a solid mid-life refurbishment.
"You have to deal with it before it fails because society is so dependent on it."
"It will require a lot more investment in what we have got, and also a lot more investment to expand it.
"We have had relatively few connections to the grid over the last 10 or 20 years - three or four a year at best.
"This year we have had over 100 inquiries for new connections - from power generators and distributors."
When Turner finished at Meridian, he served on four power company boards in Australia.
Until December last year he was also a director on TransGrid, the New South Wales equivalent of Transpower.
At Transgrid, connections to the grid rose rapidly as a result of solar and wind projects.
"So you get many, many connections distributed all over the network, so it's a different philosophy compared with building a large Huntly or a large combined cycle plant in Taranaki.
"We are starting to see that in New Zealand now."
Transpower is beginning to see a rapid increase in inquiries about solar generation, and more wind farms as well.
Turner says he will not express an opinion on the Government's proposal for pumped hydro generation at Lake Onslow in the South Island.
"But what I will say is this. Our hydro system has wonderful attributes but it has the downside that when it doesn't rain it gets dry pretty quickly - especially if it doesn't rain at Manapouri."
Sixty per cent of New Zealand's renewable energy comes from hydro.
One of the big pluses is that a hydro turbine can start up within seconds while plant at Huntly can take several hours to power up.
"When you get a 15 per cent reduction in the hydro system then you have to find that energy from somewhere, otherwise the system is in trouble.
"If we don't have some form of energy to cover those dry extremes then we are going to have a reliability problem.
"We have had the benefit of [coal- and gas-fired] Huntly thermal plant to provide that hydro dry-year backup.
"We have covered our dry years in the past few years with a combination of coal at Huntly and gas at the Taranaki Combined Cycle.
Turner notes that the Taranaki Combined Cycle plant is going to be decommissioned in 2025.
"When Huntly dies, we won't have anything to back it up.
"We are going to have to having something to lower that dry-year risk and I certainly think that pumped hydro is one of those options.
"I am open minded."
Turner is clearly a big fan of hydro, and its ability to respond quickly to shortfalls in the system. A hydro turbine can be running at full tilt within seconds of activation.
"If we want to get the benefit of a hydro system, we are going to have to cover the dry years, and pumped hydro certainly is one of the options for that.
"A project like Onslow has the capacity to do that in one place, with one large project."
When things are going smoothly, Transpower is very much a low-profile business. "I think electricity is very much a below-the-radar energy form when it's going well.
"When it is not going well is when it becomes critical, and Transpower is an incredibly critical business to New Zealand.
"It's more critical any one generator because we are national and the whole thing has to work together."
And as for the chances of another August 9? "I don't think it's going to happen again."
• Age: 72.
• Went to: Rotorua Boys' High School, Canterbury University.
• Married to: Dr Brenda Turner, medical practitioner.
• Family: Three sons, one daughter.
• Interests: Boating and fishing
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