Top Energy has been given a 30-year exemption to run its power generation and distribution businesses as one entity but needs an exemption for its diesel generators. Photo / Peter de Graaf
Top Energy has been given a 30-year exemption to run its power generation and distribution businesses as one entity but needs an exemption for its diesel generators. Photo / Peter de Graaf
Thousands of Far North residents will be in for frequent "Third World" power outages if lines company Top Energy can't get an exemption to allow it to operate its diesel generators.
Though the lines company which supplies power to 31,000 customers recently secured a 30-year exemption for its geothermal operations, which include the new plant at Ngāwhā, it failed to include power generated by diesel.
"If we can't get a diesel exemption there will be planned outages eight times a year for eight hours for 12,000 customers from Kaitaia to Doubtless Bay and as far north as the Cape," Top Energy chief executive Russell Shaw said.
"We want to keep customers on supply, not put them off. There's better services in the Third World than that."
Under electricity regulations, any lines company that generates more than 50MW of power has to split off the generation side of its business into a separate company.
This triggers "separation and arm's length compliance requirements" effectively increasing costs by $2 million per year, which equates to $80 per customer per year.
Top Energy chief executive Russell Shaw said the limit for renewable generation that lines companies are allowed to have in place should be lifted. Photo / File
In September 2017 the Electricity Authority granted the Far North lines company a 10-year exemption to run its power generation and distribution businesses as one entity.
This was renewed last year for a further 30 years. Peak power consumption in the Far North is 75MW.
The current geothermal plant at Ngāwhā — the only power plant in Northland apart from Northpower's modest Wairua hydro station — generates 25MW, or just over a third of the Far North's peak energy consumption.
After the construction of the new $182m plant - expected to be finished by October 2020 – this will be boosted to around 56.8MW. The company also owns two diesel generators in Taipa with a combined capacity of 3.65MW, and two at Omanaia generating 3MW.
It has another 10 generators at two locations in Kaitaia that are on site and expected to be running by the end of February and will generate a further 12.5MW.
Northland MP Matt King is sponsoring a local bill which would give certainty of affordable, reliable and resilient power for residents of the Far North. Photo / File
Top Energy applied for a diesel exemption before Christmas.
But there is no indication of how long it will take, how long it will be granted for – or even if it will be granted at all, Shaw said.
"It leaves you with a huge amount of uncertainty. We've already bought and installed these generators [at a cost of $20m] with no certainty that we'll be allowed to use them."
Shaw and Northland MP Matt King want a local bill to be passed which would give certainty of affordable, reliable and resilient power for residents of the Far North.
The Far North District (Electricity Distribution and Generation Management Separation) Bill, sponsored by King, also has the support of Far North District Council and Mayor John Carter.
Shaw said the Far North could be completely self sufficient once Ngāwhā is complete.
Though he supports the bill, he said it shouldn't be necessary in the first place.
One of the diesel-powered generators in Kaitaia that Top Energy is hoping for an exemption for. If granted, it will spare many people the inconvenience of planned power outages. Photo / File
"The limit for renewable generation that lines companies are allowed to have in place should be lifted. It should go from 50MW to 250MW.
"We're making these investments to improve services and lower costs to consumers, but unfortunately the regulation makes that very difficult. If we have to have the council regulating the power company because the national regulation doesn't work, then it says a lot about national regulation. We shouldn't have to create our own regulator in the Far North."
King said the current exemption did not go far enough.
"It's a Clayton's exemption. It's a half-way step. This doesn't work in the situation we have in the Far North.
"We have the dearest power in the country because of where we are. If we can stay as an independent, community-owned asset it will enable Northlanders to have cheaper power."
