Vector Limited · NZX:VCT
Vector — National Power Conference 2006
20 slides from Vector's conference presentation, Mar 2, 2006
Slide 1: National Power Conference: Meeting Auckland's Energy Needs
National Power Conference Meeting Auckland’s Energy Needs 3/3/2006 Andrew Knight Group General Manager - Strategy 2 March 2006
Slide 2: Auckland Regional Growth Strategy 2050 quote
“… Much of the region’s infrastructure is reaching design capacity and needs upgrading to meet increasing demand … There will need to be new and improved infrastructure to accommodate growth to 2050. Over $7 billion will need to be spent in the first 25 years for water supply, drainage and transport
Slide 3: This presentation …
This presentation … How Vector sees it Upper North Island growth Supply security implications Demand management Investment
Slide 4: How we see it …
How we see it … The issue is recognised – the question is risk tolerance Peak demand headroom is shrinking An N-G-1 event could see supply shortage Common approach is required Transmission capacity reinforcement is inevitable
Slide 5: Upper North Island Growth
Upper North Island Growth “For the past 12 months the Auckland region has been growing at an average of 71 people every day, or one person every 20 minutes – a new North Shore city in the Auckland region every eight years… “To accommodate this increase in population requires 24 new households every
Slide 6: Albany City – a new business centre
Albany City – a new business centre
Slide 7: Peak demand by month
Peak demand by month Monthly Peak Demand (percentage increase from previous year) 15.00% 10.00% 5.00% 2002 2003 2004 2005 0.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -5.00% -10.00%
Slide 8: Energy supply security
Energy supply security Energy supply security is an ongoing issue Short-term Auckland electricity supply, dry year risk, mobile generation Electricity transmission investment Medium-term Gas transmission investment to support new generation Renewables, smart metering, demand side manag
Slide 9: Networks connections – total
Networks connections – total As at 30 June 510,000 501,204 500,000 490,000 % .9 +9 As at 480,000 Dec ‘05 470,000 460,000 450,000 440,000 430,000 2001 2002 2003 2004 2005 2006
Slide 10: Networks growth – Auckland region
Networks growth – Auckland region Transformer Capacity (MVA) Network Length (km) 3,750 23,000 22,000 % % .8 11.9 11 3,500 + + 21,000 20,000 3,250 19,000 3,000 18,000 2001 2002 2003 2004 2005 2003 2004 2005 4 zone substations built 2001 – 2005 16 zone substations planned next 5 years
Slide 11: Upper NI security - summer
Upper NI security - summer 1,900.0 All plant on line 1,800.0 1,700.0 2007 forecast peak (CAGR 4%) UNI Load (MW) 2006 forecast peak (CAGR 4%) 1,600.0 2005 actual peak 1,500.0 Voltage Limit 1,400.0 Thermal Limit 1,300.0 - 100 200 300 400 500 600 700 800 UNI Generation (MW)
Slide 12: Upper NI security - summer
Upper NI security - summer 1,900.0 All plant Otahuhu B on line out 1,800.0 Otahuhu B & Southdown out 1,700.0 2007 CAGR 4% UNI Load (MW) 2006 CAGR 4% 1,600.0 2005 peak Peak supply Peak supply shortfall with 1,500.0 shortfall with Otahuhu B Otahuhu B & out Southdown out Voltage Limit 1,400.0 Thermal L
Slide 13: Upper NI security – summer load duration
Upper NI security – summer load duration 1,600 1,500 1,400 Actual 2005 Forecast 2006 Otahuhu B out MW 1,300 1,200 1,100 1,000 0 10 20 30 40 50 60 70 80 90 100 Percentage
Slide 14: Upper NI security – winter
Upper NI security – winter 2,300 All plant on line 2,200 Headroom in 2007 2007 forecast peak (CAGR 3%) 2,100 UNI Load (MW) 2006 forecast peak (CAGR 3%) 2005 ytd peak 2,000 1,900 Voltage Limit Thermal Limit 1,800 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 UNI Generation (MW)
Slide 15: Upper NI security – winter load duration
Upper NI security – winter load duration 2,200 2,000 1,800 1,600 MW 1,400 1,200 Forecast 2005 Actual ytd Forecast 2006 1,000 Forecast 2007 Otahuhu B out 800 600 0 10 20 30 40 50 60 70 80 90 100 %
Slide 16: Demand management …
Demand management … Solar Gas Smart Metering Eco Bulbs
Slide 17: Industry response …
Industry response … Industry is responding with a range of options under consideration Should security standards be based on consumer risk tolerance? Will the solutions be ready in 2010? Is the investment climate right for infrastructure investment?
Slide 18: Investment policy issues
Investment policy issues Who can best manage investment risks? Are asymmetric risks and options valued? Should risk-takers bear the gains and losses of their actions? Investment incentives: fiscal tax regime encourages investment to some extent does the regulatory tax regime support the
Slide 19: Conclusions
Conclusions Growth eroding capacity headroom Demand management will help but only defers necessity for transmission upgrade Risk tolerance must match consumers reasonable expectations
Slide 20: Questions?
Questions?