The coal would be used to generate power at the Huntly Power Station when electricity supplies were under threat. Photo: Lynn Grieveson
- Commerce Commission willing to approve gentailers' coal buying deal
- Big four plan 600,000 tonne stockpile at Huntly for quick generation
- Comcom says electricity security in public interest offsets competition issues
The Commerce Commission is prepared to approve the big four power companies to build a massive coal stockpile to reduce the risk of future electricity shortages during a "dry winter".
Genesis, Meridian, Contact and Mercury asked for clearance to build up reserves of 600,000 tonnes, which Genesis would use in its Rankine thermal units to generate power at the Huntly station when electricity supplies were under threat.
Genesis had planned to close one of the Rankine units early next year.
The regulator's Associate Commissioner Nathan Strong said it was ready to approve the arrangement.
"Our provisional view is that this will improve security of supply and lower wholesale prices while new capacity in the pipeline comes to market," Strong said.
"The Commission is provisionally satisfied that the proposed arrangements create net public benefits that outweigh any potential lessening of competition."
The gentailers devised the stockpile scheme to prevent a repeat of winter 2024, when a combination of low hydro-lake inflows, low wind conditions and fluctuating natural gas supplies sent wholesale electricity prices soaring and forced emergency measures to avoid shortages.
Strong said Genesis had also said there was surplus capacity available for smaller power retailers, businesses, and other generators, and the Commission expected Genesis to follow through on the commitment.
The Commission would approve the four-company deal for 10 years, but has asked for feedback before making a final decision.
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