Regulating the New Zealand Electricity Industry

2196 WordsJan 29, 20189 Pages
Laws 437 Research and Writing Topic #2: The application of the Commerce Act to the electricity industry “Regulating the New Zealand electricity industry—no longer just Ohm’s law” Emily Wu Electricity is a problematic commodity. Unlike other goods and services—be those vaccines, education or tennis rackets—the life of electricity is transient and without technology capable of storing it, supply must meet demand instantaneously. Due to the inherently unreliable nature of demand forecasts (e.g. an unexpected cold front leads to a demand spike as people turn on their heaters), the grid must also have the capacity to reach peak demand at all times. In addition to these complicated physical problems, the location of New Zealand’s largest demand centres compared largest generation centres means there are several infrastructural issues as well. This essay will briefly examine the industry’s regulatory history and discern how the Commerce Act 1986 fits into this regulatory context. The ability of Part 2 to control generators in net-pivotal situations will also be briefly scrutinized. Structure of the industry The electricity industry can be split 4 ways: 1. Generation: converting other energy sources (e.g. coal) into electrical energy. 2. Transmission: transferring electricity to local substations. 3. Distribution: delivers electricity from transmission system to consumers. 4. Retail: companies who buy electricity from the wholesale market and sell it to
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