ATS Energy Short Circuit October 2014

Short Circuit OC TO BER 201 4

Advice to members

HYDRO SITUATION

Tracey Gordon, ATS Energy Account Manager

In addition to what you pay for your energy use, your network charges can also go up and down if the network company tries to get people using more off-peak power.

Before opting for an option like this it is essential to do your research as this is a high risk option and you need to go into it with all the information you can get. An understanding of your consumption profile is vital with this type of pricing.

Please call Tracey at ATS Energy if you have any concerns with your electricity accounts or would like any further information on the market on 0800 BUY ATS (289 287).

SHORT CIRCUIT | OCTOBER 2014

100%

For example, prices are usually higher in the morning and evening when everyone’s using appliances. They will also be a bit higher on average during winter, when the heaters go on.

100%

When network companies try to reduce the load at peak times of the day.

75%

1 APR 1 MAY

1 JULY

1 SEPT

0%

When there’s less generation capacity (like when hydro lakes are low); or

•

75%

1 MAR

1 AUG

•

50%

1 FEB

This will not affect the majority of our members as they are already contracted on time of use metering. But there are new retailers in the market offering a different option to the normal retailers. It means you can get the whole market price, plus a fee. It is a method done in overseas countries more regularly than New Zealand.

Prices tend to be higher: • When more people are using power;

50%

1 JAN

1 JUNE

Wholesale electricity prices go up and down for a number of reasons.

25%

2014

The lack of snow sitting up on the mountains this winter is not only frustrating for the skiers but the snow also serves a bigger purpose as it fills the lakes needed for electricity generation over the summer months. There is some concern in the market this season’s lack of snow could lead to prices being pushed up for contracts over the next year.

Most electricity retailers work out a rate that flattens out the price highs and lows. Buying from the spot market is different because you get ‘raw’ prices—the highs as well as the lows.

There may be some months that your bill is higher than it would have been if you’d been with another supplier and savings can come from when you change the way you use energy, taking advantage of lower prices. However if you are unable to do this you will be affected by the spikes and higher price periods.

25%

Due to the dry weather, starting irrigation earlier this year is looking like a must for some. Take some time to check your sheds and pumps before starting to ensure nothing has nested over the winter and cause issues for start-up. The changeover dates for the summer rates are 1 September Tracey Gordon and 31 March in the EA Network while capacity charges do not start until 1 October in the Orion network. Often the changeover account can have rates pro-rated until the full summer month is billed. If you need help with this please call Tracey on 03 307 5107.

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The season has started off exceptionally with brilliant weather for a busy season.

STORAGE (% OF MAXIMUM)

Information taken from NZX Energy DISCLAIMER: The purpose of this information is to outline historic data and is intended for general reference only

Irrigation costs prompt line alternatives

By Richard Rennie

The expansion of irrigation in Canterbury has the region engulf the bulk of the country’s irrigated farm area, accounting for about 80% of the 700,000ha irrigated land in New Zealand.

However government investment in continuing irrigation development has the rest of the South Island in particular keen to reap the rewards Canterbury has enjoyed from irrigation. This has resulted in more “non-traditional” irrigation areas including parts of the upper South Island and remoter parts of Otago considering options for irrigation schemes.

However, as with any growth comes growth pains, challenges and restrictions. Energy pathways are increasingly part of those barriers for irrigation expansion. Moving water to where it needs to be becomes a region wide issue when electrical energy is required, and brings as many challenges for energy companies as it does for their farmer clients.

The growth of irrigation schemes invariably takes time, and even then established users still require the insurance of a backup bore for low flow years when restrictions apply.

Keeping that deep well pump in reserve can come as a mixed blessing, and outright expense on years not required.

Lines companies have to ensure they have the capacity to cope with those hot dry years when power demand from deep well pumps surges, and as such charge a “capacity charge” on equipment that may idle for entire seasons and often for consecutive weeks, but must be expected to activate at any time over the peak season when times are dry.

The result is lines companies have to engineer systems to cope with that, even when they may only run at a percentage of the system’s capability for long periods.

Customers may reduce their “fixed charge” payment on the equipment, but a wholesale move by customers to schemes and that reduction could result in lower capacity contributions, which has them effectively receiving a subsidy to hold those bores idle at a lower rate than those customers who run deep well bores more regularly.

But from an irrigator’s perspective the cost of having those idle bores as insurance can prove expensive. Typically costs can be as high as $1200 a month for a 100kWh pump, a considerable “standby” expense that should demand rural users consider other options for what is essentially energy continuance insurance.

The interplay between capacity charges and irrigation scheme costs is starting to be thrashed out more frequently as more and more schemes struggle with economics and potential members toss around the economics of water.

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Irrigators are also starting to seek alternative power sources to drive energy hungry dairy units, and lines companies are also having to consider the cost of upgrading lines and assets built around low use dry stock farms, sometimes for relatively limited numbers.

The most obvious “standby” power source for deep well irrigation pumps is a diesel generator, increasingly part of the “must have” kit on dairy units after last year’s devastating storms in Canterbury knocked out power for several days in some areas.

A standby generator to power a 100kWh pump does not come cheap at about $30,000, but against a $15,000 a year capacity cost it may soon stack up.

More so when a 100kVA generator suited to drive such a pump would also be capable of driving a farm dairy during a power outage. The potential to have a trailer mounter generator set capable of serving both purposes is compelling when farmers also have the option to lease the equipment, rather than own outright.

Irrigation NZ Chief Executive Andrew Curtis said a key project for the body was to explore alternative energy options, in light of high capacity costs faced by irrigators. Work by the group in 2012 found the average capacity charge in Canterbury was $6800 a property, prompting the efforts to consider alternatives.

This includes photovoltaic systems and wind generators.

“Wind generation is an option for powering a pump up to a header dam, and more schemes have looked at incorporating hydro generation into them as well.”

Chief Executive of the NZ Wind Energy Association Eric Pyle says the farming sector is starting to recognise that the benefits of irrigation are limited by the lines capacity in rural areas.

“It is an issue all over the country. It seems people have considered the water but forgotten about the electricity.”

The association is working with a Bulls farmer on combining wind and diesel generators, after he found the local lines were not up to spec’ for pump demands.

“We are playing catch up everywhere and there’s a recognition that wind can offer something for irrigators in some areas.”

For more information on this topic or any other energy issues please contact Tracey Gordon, ATS Energy Account Manager, on 0800 BUY ATS (289 287).

SHORT CIRCUIT | OCTOBER 2014