Woods MeganMINISTERIAL STATEMENTSEnergy and Resources—Power Outages 9 August 2021Hon Dr MEGAN WOODS (Minister of Energy and Resources): I wish to make a ministerial statement relating to yesterday's power outages. Yesterday an emergency mechanism in the electricity system was triggered by the system operator Transpower requesting network companies direct grid connections to reduce load on their networks. Network companies then took action in response to this request which saw a number of power outages across the North Island between 6 p.m. and 9 p.m. last night. This situation was caused due to insufficient generation being available to meet unprecedented demand on a cold winter's evening across the country.Yesterday's events unfolded as follows: at 6.43 a.m. Transpower issued a low residual notice to participants following their forecast showing a deficit in generation during the forecast evening peak. Transpower requested more generation or less load. At 1.02 p.m. yesterday Transpower issued a warning that there was insufficient generation coming in for the evening peak and another warning was issued at 5.07 p.m. At 6.40 p.m. Transpower issued a request for network companies with direct grid connection to shed load by 1 percent. At 7.10 p.m. Transpower issued a grid emergency notice.From this timeline three things have become clear to me: the electricity market had clear warnings about the potential for the shortage situation; secondly there was inadequate communication with the public about the situation; and thirdly there is enough capacity in the system. This led me to write to the large generators asking what action they took in response to Transpower's notice at 6.43 a.m. I also asked them to confirm with officials that they have confidence their companies are doing everything they can to maintain their generating capacity and ensuring security of supply. This is the number one priority for the electricity market. Since my letter this morning Genesis has explained why it made a commercial decision not to operate one of its plants in response to the forecast shortfall.Transpower will also apologise for the miscalculation in its demand reduction notice and their communication to the lines companies through the warnings and notices given. I have asked officials to consider what more can be done to better inform the public in the event that a rare grid emergency is likely to occur. I am concerned that the system could not deliver given there was capacity that could have been brought on but wasn't.It is not uncommon for Transpower to issue requests for generators to bring on more generation to meet demand but it is unusual for an emergency notice to be issued. But let me be clear regardless of the mechanisms of the electricity market New Zealanders rightly expect the lights to be on and the heaters to be running on a cold winter's night. That's why the situation that unfolded yesterday was unacceptable. If we're going to have a market-orientated system providing security of supply then that market must deliver. The market failed in this respect.This morning I convened an urgent meeting of senior officials from Transpower the Electricity Authority and the Ministry of Business Innovation and Employment (MBIE). I asked a series of questions and sought assurances about the ongoing operations of the market to maintain security of supply. I have also asked that a coordination group be established by MBIE to lead the response and commence a review of what has occurred. While we cannot undo what happened yesterday we can thoroughly investigate the cause and take steps to minimise the risk of it happening again. I will add that this Government has taken numerous steps towards ensuring the electricity market is working as it should including a range of responses to recommendations from the electricity price review. The recent spike in high electricity prices as a result of the dry hydrological year and a short-term gas supply issue led me to seek analysis on this from the Electricity Authority. Yesterday's events have prompted further questions on whether the system is fit for purpose.