Energy Minister Megan Woods is sticking to her guns, saying commercial reasons were partly behind Monday's power outage and that she isn't scapegoating Genesis Energy for the generation shortage.
Tens of thousands of properties across the North Island were thrown into darkness on Monday night after Transpower, responsible for the country's electricity transmission, warned there was insufficient generation to match record-high demand on one of the coldest nights of the year.
With Prime Minister Jacinda Ardern labelling the outage unacceptable, Woods met with Transpower and the Electricity Regulatory Authority on Tuesday morning and wrote to generators demanding answers and assurances it wouldn't happen again.
She later revealed there has been capacity in the system for the required generation but market failures to blame. She said Genesis had made a "commercial decision" not to operate its third Rankine boiler at Huntly, while also noting Transpower had miscalculated the amount of demand it needed to reduce, meaning more people had the lights turned out than needed.
Genesis, however, said that upon receiving notification on Monday morning from Transpower that there was potentially insufficient national generation, it assessed "it had adequate generation capacity to meet its portfolio demand with some contingency built in" and there no indication the third Rankine - which can take up to 10 hours to fully fire up - was needed.
The generator said Transpower didn't request "participants to increase available generation" until a Grid Emergency Notice at 5:11pm on Monday" and that issues with weeds and a lack of wind meant there was some loss of generation at other stations.
Genesis Energy's chief executive Marc England said the decision not to fire up the third Rankine was an operational decision and he felt scapegoated by the minister, but Woods rejected that on The AM Show on Wednesday.
"That is simply not true. The question that needed to be answered yesterday morning was did we have the physical capacity to generate the energy, the electricity that was needed on that night when the lights went out… the answer was yes," she said.
"There were markets/commercial reasons why that wasn't brought on. That is where we need to focus our energies on what needs to be fixed. There is no point anybody pointing fingers, there is no point anybody feeling aggrieved about the fact that we have to find out what happened because the most important thing for me as minister is ensuring we don't get into this situation again."
She said 240MW didn't come into the system because the Huntly Rankine didn't come on "because the individual company that runs that doesn't have oversight of the system".
"[Genesis] didn't see there was going to be demand for that night so it didn't respond. I think we need to have a look at how can we make sure we are getting coordination of that information, that only the system operator has the absolute oversight of what everyone in the market is doing and we need to make sure we have got the right levers so we can bring on all the generation."
Woods said it was critical to understand what happened so it didn't happen again. Ultimately, she said, it appeared Monday's issue was a result of not all generation that could have been brought on, not being brought on, as well as more demand being shed than needed.
"The most important thing for me yesterday was making sure it didn't happen again last night, and it didn't. What the job is now is to find out, did we have a system failure or whether simply mistakes were made. Whatever way, we have got to fix it."
She has asked for advice on what could be done differently.
"We actually did have capacity that wasn't brought on. It wasn't that we didn't physically have the amount of power to generate. It is the way in which the market responds to these that we need to look at and that is certainly something I have asked for some pretty rapid advice on.
"What can we do differently? If we know there is going to be a shortfall, we need to make sure we are bringing all the generation we can on so people can keep the lights on and their heaters going on a cold night."
The minister said the biggest driver pushing up electricity prices is when there is a lack of water in our hydro dams, such as what happened in the South Island earlier this year, though that has since been rectified.
"That is exactly why the Government is looking at what we can do about longer term storage solutions in a drier year. We are calling it New Zealand's Battery. Our hydro lakes only hold a couple of months' worth of water, if you compare it to some of the Scandinavian systems that have a couple of years.
"We have got to do something more to store for a dry year in a renewable form. We know that continuing to burn coal or gas is going to get expensive and that will drive up the price of electricity. The cheapest electricity we can produce is renewables so that is also work we have underway."
Judith Collins, the National Party leader, told The AM Show that as a former Minister for Energy and Resources she believes New Zealand doesn't have enough gas.
"The minister should never have gone along with a ban on offshore exploration for natural gas. Gas is one of those things that actually enables us to have such a high proportion of renewable energy in our electricity grid… Gas is very quick to be able to be fired up and to keep the power on."
Woods has pushed back on the suggestion that Monday's outage shows the Government shouldn't have banned new oil and gas exploration in 2018. She said on Tuesday that any permits that would have been issued since would still be in an exploratory stage and no new gas has been found in New Zealand waters since 2000.
Collins was also critical of Woods only finding out about the outage at about 8:30pm on Monday night - more than hour after some Kiwis were affected - and said the Government's commitment to pumped hydro in the south wasn't being accompanied by an upgrade to the Cook Strait cable.
Woods said in Parliament on Tuesday the HVDC cable between the North and South Island was running at just 50 percent capacity on Monday, showing it has the ability to transport more power. Pumped hydro was a long-term project with a timeline of about a decade, she said.
