Keeping the energy flowing

Generation
Connection Guide
Including commissioning, registering,
dispatch and payment
 © TRANSPOWER NEW ZEALAND LIMITED ALL RIGHTS RESERVED 2021
This document is produced for external release. Its conclusions are based on the information currently available to Transpower and
may change as further information becomes available either internally or externally
Table of Contents
Glossary .................................................................................................................... 4
Generation connection guide .................................................................................. 5
INTRODUCTION ...................................................................................................................................... 5
GENERATION CONNECTION PROCESS ...................................................................................................... 6
Timeline Process Timeline.............................................................................................................. 8
WORKSTREAM A - TRANSMISSION CONNECTION ...................................................................................... 9
Phase A1. Concept ...................................................................................................................... 9
Phase A2. Feasibility ................................................................................................................. 11
Phase A3. Approval ................................................................................................................... 12
Phase A4. Design and construction........................................................................................... 13
WORKSTREAM B : GENERATION COMMISSIONING................................................................................... 15
Phase B1. Planning ................................................................................................................... 15
Phase B2. Pre-commissioning ................................................................................................... 20
Phase B3. Commissioning ......................................................................................................... 25
Phase B4. Post-commissioning ................................................................................................. 26
C – MARKET REGISTRATION ................................................................................................................. 27
D – DISPATCH ..................................................................................................................................... 29
E – PAYMENT ...................................................................................................................................... 33

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .3
Glossary
ACS Asset Capability Statement

AOPO Asset Owner Performance Obligation

Code Electricity Industry Particpation Code 2010 1

FTR Financial Transmission Rights

GIP Grid Injection Point

Grid The system of transmission lines, substations and other works, including the
HVDC link used to connect grid injection points and grid exit points

GXP Grid Exit Point

ICCP Inter-Control Centre Communications Protocol

LCE Loss and Constraint Excess

NZX NZX Energy (currently the Clearing Manager, Pricing Manager, WITS Manager
and Reconciliation Manager)

PPO Principal Performance Obligation

RCPD Regional Coincident Peak Demand

RTUs Remote Terminal Units (RTUs) or, in future, ICCP

SCADA Supervisory Control And Data Acquisition system

SSR Solution Study Report

SOW Statement Of Work

System Transpower acting in its role as System Operator

Operator

TPM Transmission Pricing Methodology

TSA Transpower Services Agreement

TWA Transpower Works Agreement

WITS Wholesale and Information Trading System

1 See www.ea.govt.nz/code-and-compliance/the-code/

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .4
Generation connection guide

Introduction
The document provides a guide to connecting, commissioning, registration, offering and
dispatching of new generation plant onto New Zealand’s electricity system, plus a summary of
transmission charges.
Transpower’s purpose is ’empowering the energy future for New Zealand’, through its two
roles as Grid Owner and System Operator:
 As Grid Owner, maintaining a reliable transmission network while undertaking efficient
investment to achieve a less constrained and more resilient grid.
 As System Operator, providing an integrated operations service facilitating a reliable
efficient and competitive wholesale electricity market.
Transpower’s commitment is to deliver this safely and efficiently to meet customer
requirements and shareholder 2 expectations. This is accomplished while complying with the
regulatory obligations and fulfilling its responsibilities to future generations of New
Zealanders.
Generation connection, commissioning and dispatch are complex processes, requiring the
coordination of activities between several parties. This document provides a guide on the
processes required for new generation to be successfully connected, commissioned,
registered, offered and dispatched, plus a summary of transmission charges.
The latest version of this document, plus associated documentation and information, is
available on Transpower’s ’Connect your generation’ page:
https://www.transpower.co.nz/keeping-you-connected/getting-you-connected/connect-your-
generation
Transpower also provides information on its future plans and on market conditions through its
website www.transpower.co.nz, including its Transmission Planning Report and System
Security Forecast.

2Transpower is 100% owned by the New Zealand Government and operates under the State Owned Enterprises
Act

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .5
Generation connection process
The complexity and duration of each phase will vary from project to project but typically
follows a standard sequence from concept development through to operation.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .6
 The generation connection process is further broken down into discrete phases that occur
across five concurrent workstreams.
A description of each of the workstreams is provided below.

Concept, investigations, design, Applies to all generation

construction and commissioning of the plant connecting directly
Grid Injection Point (GIP) where new to Transpower’s assets
A
generation plant will connect to
Transmission May not apply to
Transpower’s assets
connection generation equipment that
This is conducted by Transpower in its connects within a
capacity as owner of the assets distribution network

Commissioning and testing required to Applies to all generation

ensure that the new generation is plant with a capacity
B
compliant with the Electricity Industry >1MW, but smaller plant
Generation
Participation Code’s requirements can be excluded from
commissioning some of the requirements
This is conducted the System Operator
in some situations

Registration for market services allows the Applies to all generation

trading of and payment for electricity with a connection to a
C produced by generation plant network
Market This is conducted by NZX Energy in its
registration role as Clearing Manager, which oversees
the trading and reconciliation for the New
Zealand electricity market

Generators are required by the Electricity Applies to all dispatched

Authority to comply with the Code generation plant. (optional
D for plant less than 10MW
This provides a brief summary of these
Dispatch if not required by the
requirements as they relate to dispatch
System operator to
maintain system security)

This workstream covers the financial Applies to all generation

aspects of connection to the grid plant connected directly to
Transpower’s assets
E Transpower charges for concept
assessment, investigation, detailed design
Transmission
and construction work in Worstream A
charges and, once connected, through the
Transmission Pricing Methodology (TPM)
and Transpower Works Agreement (TWA)

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .7
 Phasing by workstream
The diagram below shows the typical sequencing of the connection, commissioning and registration.

Workstream
Commissioned
A A5
A1 A2 A3 A4
Transmission Concept Investigation Approval Design
Construction &
connection Commissioning

B B3 B5
B1 B2 B4
Generation Concept Planning
Pre-
Commissioning
Post-
commissioning commissioning commissioning

C C1
Market Market
registration registration

D D1
Dispatch Dispatch

E4
E E1 E3
E2 Ongoing TPM charges
Services Transpower
Transmission agreement +
Investigation
works E5
charges SOW
concept SOW agreement Ongoing electricity
industry levy

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .8
Workstream A - Transmission connection
This section provides an overview of the process for generators who require connection to
Transpower’s assets. This workstream does not apply to generators who are
connecting to a local network, but other workstreams do. (Note; for significant new
distributor connected generation, the company you are connecting to may need to
undertake some activities with Transpower under this workstream)
Transmission connection comprises five phases:
• Concept
• Investigation
• Approval
• Design
• Construction and Commissioning
Each phase consists of a number of actions that generally need to be completed before
moving to the next phase.

Phase A1. Concept

In this phase, generators who are considering a new generation project provide Transpower
with high level details of their plans. Transpower will then provide guidance on the connection
process, and assess the generator’s concept covering feasibility, connection options, grid
constraints, any operational considerations and likely timeframes.

A1.1 Develop concept

Description The Generator determines their need for a new connection to

Transpower assets. Considerations include: the type and size of the
proposed generation, location in relation to Transpower’s assets,
operating scenarios, desired connection resilience and any consenting
and property issues.
Responsible party Generator
Timeframe Dependent on Generator

A1.2 Express interest

Description The owner of the proposed new generation plant will contact
Transpower’s Customer Solutions Team. A meeting will be arranged
with the prospective Generator to discuss their proposal. Transpower
provides guidance and information on the process required for
generation connection. Transpower will appoint a point of contact
person for the connection process.
Responsible party Generator, Transpower’s Customer Solutions Team
Timeframe Dependent on Generator
Resources Customer.solutions@transpower.co.nz or +64 4 495 7000.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .9
 A1.3 Provide preliminary information

Description Following the initial meeting, the Generator submits a formal request for
a Concept Assessment workshop or a Concept Assessment completed
by desk top study.

Responsible party Generator

Timeframe Dependent on Generator

Resources Concept assessment request forms are available on request from

Transpower’s Customer Solutions at
customer.solutions@transpower.co.nz or +64 495 7000

Costs are incurred to the Generator from this stage on.

A1.4a Concept workshop

Description Using the information provided by the Generator, Transpower arranges

a concept assessment workshop to discuss considerations for
connection options, site selection, estimated costs, environmental and
property requirements, operational considerations and system
constraints.
This can be in person or via video conference and is normally requested
where the generator has multiple options for their project they wish to
evaluate and narrow down. Transpower will normally charge a fee for
the Workshop to cover costs.
Responsible party Transpower
Timeframe About 2 weeks

A1.4b Concept Assessment

Description Using the information provided by the Generator, Transpower prepares

a Concept Assessment report covering the following aspects:
connection options and feasibility, estimated timeline for connection,
estimated costs and risks, environmental and property requirements,
operational considerations, system constraints and next steps.
This is a desktop study. Transpower will normally charge a fee for the
Concept Assessment to cover costs.
Responsible party Transpower
Timeframe About 6 weeks

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .10
 Phase A2. Investigation
The Generator reviews the Concept Assessment and decides whether to proceed. This
process may involve several further discussions with Transpower before the Generator is
ready to commit to more detailed studies.

A2.1 Proceed with investigations

Description Following on from the results of Transpower’s Concept Assessment, the

Generator will decide whether to proceed with a detailed investigation or
optioneering.
If proceeding, Transpower will determine resource availability and
confirm the timeframe to undertake the detailed investigation.

Responsible party Generator / Transpower

Timeframe Dependent on Generator

A2.2 Detailed Solutions Development (DSD)

Description Transpower and the Generator agree and sign a Detailed Solution
Development (DSD) statement of work under a Transpower Services
Agreement (TSA) . The DSD documents the scope and cost of work to
produce a Solution Study Report (SSR) .
Transpower will agree the exact scope with the Generator.
Depending on the complexity of the project and the Generator’s internal
decision points, this may be staged with a series of agreed scopes of
work..
Responsible party Generator / Transpower
Timeframe About 1 month

A2.3 Agreement on land acquisition and environmental approvals

Description Transpower and the Generator agree on the process and

responsibilities associated with environmental and property processes
and approvals for the new Transpower connection point. Transpower’s
preference is to obtain a designation for its short and long term
flexibility. Designations can only be applied for by Transpower. In
some instances, Transpower may be able to rely on regional consents
or other environmental approvals obtained by the Generator (subject to
Transpower’s requirements being met). There is some flexibility
regarding whether property rights are obtained by the Generator or by
Transpower (on condition that Transpower’s property requirements are
met). The resultant agreements are included as appendices to the
Transpower Works Agreement (TWA) in Phase A3.2.
Responsible party Generator / Transpower
Timeframe Two weeks

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .11
 A2.4 Solution Study Report (SSR)

Description Transpower engages a design consultant to prepare a Solution Study

Report (SSR). The SSR will typically cover the conceptual connection
design, system impact, wide area protection impact, and detailed cost
and timeline estimates. A final report is provided to the Generator
following review by Transpower.
Responsible party Transpower

Timeframe About 6 months (depending on complexity)

A2.5 Environmental and property investigation

Description Transpower engages a planning consultant to undertake an

environmental assessment. The assessment would typically identify the
approvals required under the Resource Management Act and Heritage
New Zealand Pohere Taonga Act as well as issues, risks and potential
timeframes for obtaining the approvals. Information regarding the
approvals required, risks and timing is provided to the Generator by
Transpower.
Responsible party Transpower

Timeframe About 6 months (may run in parallel with A2.5)

Phase A3. Approval

When the Generator is ready to proceed, the Generator enters into a contract with
Transpower to cover the cost of constructing the new Transpower connection facility.

A3.1 Proceed with construction

Description Following on from the results of the SSR, the Generator decides
whether to proceed, and advises Transpower accordingly.
Responsible party Generator
Timeframe About 2 to 3 months for Transpower approval

A3.2 Transpower Works Agreement (TWA)

Description Transpower and the generator agree and sign a Transpower Works
Agreement (TWA). The TWA is Transpower’s standard contract
covering the terms and conditions for Transpower’s provision of new
infrastructure to enable customer projects, and the recovery of costs.
Responsible party Generator / Transpower
Timeframe About 2 months

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .12
 Phase A4. Design
Transpower undertakes the design of the new connection on behalf of the Generator.

A4.1 Detailed design

Description Transpower prepares the detailed design for the construction and
commissioning of the new connection.
The design work will typically be undertaken concurrently with the
consenting process (Phase A4.2).
Responsible party Transpower
Timeframe Varies depending on the complexity of the project

A4.2 Obtain environmental approvals

Description The party or parties designated in Phase A2.2 secures the necessary
environmental approvals to enable the construction, operation,
maintenance and upgrade of the new connection.
Gaining approvals will likely be staged. Some may be obtained based
on SSR level engineering detail. Others will require detailed design and
civil design aspects (Phase A4.1).
Responsible party Generator or Transpower (dependant on Phase A2.2).
Timeframe Varies depending on the complexity of the project

A4.3 Metering

Description The Generator must arrange a metering installation that complies with
the Code. Grid connected Generators must provide Transpower with a
copy of their metering installation design for review and comment.
Generators should note that the Code contains other obligations on
collecting and providing data to the market, noted below. (Noted also in
section B2.8).
Responsible party Generator / Transpower

Timeframe 6 months pre commissioning

Compliance Part 10 (Metering arrangements) of the Code includes metering
installation requirements
Part 13 (Trading arrangements) of the Code includes requirements for
embedded generators subject to dispatch or intermittent generation
connected to the Grid.
Part 15 (Reconciliation) of the Code includes requirements for collection
and provision of metered data to the market

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .13
 Phase A5. Construction & commissioning
Transpower undertakes the construction and commissioning of the new grid connection on
behalf of the Generator.

A5.1 Construction & commissioning of new connections to Transpower

Assets

Description Transpower undertakes the construction and commissioning of the new

connection to its assets. Monthly project progress reports are provided
to the Generator.
Progress meetings can be arranged if and when required.
Responsible party Transpower
Timeframe Varies depending on the complexity of the project

A5.2 Transmission Agreement

Description All parties connected to Transpower assets are required to have a

transmission agreement, which stipulates terms and conditions of the
connection. The form of the standard transmission agreement, known
as the Benchmark Agreement, is set out by the Electricity Authority in
the Code. A copy of the Benchmark Agreement is available on
Transpower’s website
Generators with an existing transmission agreement do not require an
additional agreement. Rather, new schedules are added to the existing
agreement.
Responsible party Generator / Transpower
Timeframe 4 – 8 weeks
Resources Reference to the Benchmark Agreement can be found in Part 12 of the
Code.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .14
Workstream B : Generation commissioning
This section outlines the process for Generators who want to commission new generation
plant onto the grid or a local or embedded network. It applies to all generators. However,
not all of the phases may be applicable to smaller Generators. Transpower in its role as
System Operator will advise what is required.
Generation commissioning comprises four phases:
• Concept
• Planning
• Pre-commissioning
• Commissioning
• Post-commissioning
Each phase consists of a number of actions that need to be completed before moving to the
next phase. Each of the actions has an associated commissioning lead-time, which is the
minimum period of time between completing the action and beginning the commissioning and
testing in order to avoid delays to the planned commissioning date. The actions within each
phase can be carried out in any order, so long as they are all completed by their ‘lead-time’.

Phase B1. Concept

Irrespective of whether a generator connects to Transpower assets (during stages A1 and A2
of this guide) or Distribution assets, the generator should engage directly with the System
Operator to discuss potential operational considerations for the project. These may impact the
generators’ planning, design, procurement and business case. This is especially important
for investments in new generating technologies and should occur early in the project to avoid
unforeseen complications during commissioning and operation.

B1.1 Education during concept phase

Description Read operational guidance available on Transpower’s website

and assess operational obligations under the Code. Seek
clarification from the System Operator as required
(compliance@transpower.co.nz).
Responsible party Generator
Timeframe During concept phase
Compliance No
Show-stopper No

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .15
 B1.2 Education pre Investigation

Description Understand the operational implications of various technology

and design options being investigated. Seek clarification from the
System Operator as required (compliance@transpower.co.nz).
Responsible party Generator
Timeframe Pre investigation phase
Compliance No
Show-stopper No

Phase B2. Planning

The System Operator meets with the Generator to discuss and agree key aspects of the
commissioning, and highlight the information requirements, studies and approvals that need
to occur to ensure there are no delays. The Planning phase commences soon after the
Generator has approval to construct the new generation plant whether connected to
Transpower (Workstream A: Phase A3) or Distribution assets.

B2.1 Advice of Commissioning

Description Consultation with the System Operator that a commissioning is planned

will help parties identify and discuss key activities which may include:
• Allocation of 3 letter operational code for dispatch purposes
• Identifying if activities may result in a secondary risk to the power
system
• Agreement of relevant Asset Owner Performance Obligations and
early notification of any residual non-compliances
• Agreement of points of contact within affected organisations
• Discussion of connection to the grid or a local network as
appropriate to convey energy to the market.
• Provision of generating unit/inverter planning models
• Requirements for connection studies
Responsible party Generator
Lead-time 12 months pre commissioning
Compliance No
Show-stopper No

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .16
 B2.2 Identify protection coordination requirements

Description Coordination of protection requirements can be a long lead-item and

impact multiple asset owners at the grid interface
Responsible Generator / Transpower as grid owner
party
Lead-time 12 months pre commissioning
Compliance Clause 4(4a) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code
Show- No
stopper

B2.3 Identify any ancillary services capability

Description The Generator should have an awareness of ancillary services that may
be offered to the electricity market, that could be required to be
demonstrated during commissioning. Examples may include, but not be
limited to:
• Fast and/or sustained instantaneous reserves
• Over-frequency reserves
• Single frequency keeping
• Multiple frequency keeping
• Black start
Responsible Generator
party
Lead-time 6 months pre commissioning
Compliance No
Show- No
stopper

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .17
 B2.4 Submit Planning Asset Capability Statement (ACS)

Description Generators are required under the Code to submit an Asset Capability
Statement (ACS) to the System Operator. The ACS contains the
technical details of the new generation plant to be connected. This is
the first stage of an iterative process, with more detail added to the ACS
as the project progresses toward commissioning. Transpower will
provide access to their on-line Asset Capability Database upon
request.
Responsible party Generator
Lead-time 6 months pre commissioning
Compliance Clause 8.25(4) of Part 8 (Common Quality) of the Code
Clause 2(5) of Schedule 8.3 (Tech Code A) of Part 8 (Common Quality)
of the Code
Show-stopper No
Resources Information on Asset Capability Statements is available via
Transpower’s Generation Connection & Dispatch page 3. For further
information contact the System Operator

B2.5 Agree applicable Asset Owner Performance Obligations (AOPOs)

and Techncial Codes

Description Based upon the submitted ACS the generator the System Operator
should agree which Asset Owner Performance Obligations (AOPOs)
and Technical Codes apply to the unit being commissioned and any
changes to obligations of the station it is a part of.
Any residual non-compliances should be noted and managed
appropriately as they are identified.
Responsible party Generator / System Operator
Lead-time 6 months pre commissioning
Compliance Part 8 (Common Quality) sub-part 2 of the Code
Show-stopper No

3 www.transpower.co.nz/industry/generation-connection/generation-connection-dispatch.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .18
 B2.6 Consider establishing a Memorandum of Understanding (MoU)

Description An optional Memorandum of Understanding (MoU) can be agreed

between Transpower and the Generator. The MoU clearly defines an
issue escalation process, and contains an agreement that failure to
meet Transpower’s ‘show-stoppers’ will result in delays to
commissioning.
The MoU includes a risk register with compliance issues, an actions
register with pending tasks, and a decisions register detailing decisions
that have been made to date.

Responsible party Generator / System Operator

Lead-time 6 months pre commissioning
Compliance No
Show-stopper No

Resources A draft MoU is available on Transpower’s Generation Connection &

Dispatch page 4.

B2.7 Market considerations

Description Where generators are uncertain of all the Code obligations Transpower
may be able to give guidance in specific areas to assist, which could
include establishing the need for dispatch facilities. If a new dispatch
connection is required this could take several months to arrange
depending on the type of facility.
Responsible party Generator
Lead-time 6 months pre commissioning
Compliance Yes
Show-stopper No

4 https://www.transpower.co.nz/system-operator/resources-asset-owners/generation-connection-dispatch

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .19
 B2.8 Metering Installation Design

Description The Generator must arrange a metering installation that complies with
the Code. Grid connected Generators must provide Transpower with a
copy of their metering installation design for review and comment.
Generators should note that the Code contains other obligations on
collecting and providing data to the market, noted below. (Noted also in
section A2.6).
Responsible party Generator / Transpower
Lead-time 6 months pre commissioning
Compliance Part 10 (Metering arrangements) of the Code includes metering
installation requirements
Part 13 (Trading arrangements) of the Code includes requirements for
embedded generators subject to dispatch or intermittent generation
connected to the Grid
Part 15 (Reconciliation) of the Code includes requirements for collection
and provision of metered data to the market
Show-stopper Yes

Phase B3. Pre-commissioning

The System Operator reviews the information that is provided by the Generator to ensure that
the new generation plant is compliant with the Code. All 'showstoppers' must be satisfied
before commissioning and testing of the generation plant commences.

B3.1 Submit Pre-commissioning ACS

Description As more data comes to hand, the Generator provides further technical
details of their new plant via an updated ACS.
Responsible party Generator
Lead-time 4 months pre commissioning
Compliance Clause 8.25(4) of Part 8 (Common Quality) of the Code
Clause 2(5) of Schedule 8.3 (Technical Code A) of Part 8 (Common
Quality) of the Code
Show-stopper No

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .20
 B3.2 Submission of draft plans for review

Description Commissioning and an Engineering Methodology plans should be

prepared by the generator and submitted for for agreement by the
System Operator. It can be advantageous to develop plans in
conjunction with the System Operator.
Responsible party Generator
Lead-time 4 months pre commissioning
Compliance No
Show-stopper No

B3.3 Submit outage requests for grid equipment

Description All outage requests must be lodged in the Transpower outage planning
system for primary grid equipment and protection systems.
Responsible party Generator
Lead-time 4 months pre commissioning
Compliance No
Show-stopper Yes

B3.4 Submission of final plans for review and agreement

Description Final drafts must be submitted the System Operator for review and
agreement with sufficient time for a review to be carried out and
changes, if identified, made to the documents.
Responsible party Generator
Lead-time 3 months pre commissioning
Compliance Clause 2 of Technical Code A of Part 8 (Common Quality) of the Code.
Show-stopper Yes

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .21
 B3.5 Indications and measurements

Description The Generator provides Transpower with indications and

measurements as specified in the Code. These are supplied through
Inter-Control Centre Communications Protocol (ICCP) data links.
Indications and ACS data are utilised to ready Transpower’s Market
model for dispatch where appropriate and organise configuration of
SCADA databases.
Responsible party Generator
Lead-time 4 months pre commissioning
Compliance Appendix A (Indications and Measurements) of Technical Code C
(Operational communications) of Schedule 8.3 (Technical codes) of
Part 8 (Common quality) of the Code.
Show-stopper Yes

B3.6 Agree commissioning and test plans

Description The System Operator reviews and signs off the commissioning and test
plans.
Responsible party System Operator
Lead-time 6 weeks pre commissioning
Compliance Clause 2(7) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality)
Show-stopper Yes

B3.7 Agree Protection coordination studies

Description The Generator liaises with Transpower to ensure that the protection
settings and design at the Grid interface meet Code requirements.
Transpower will provide the Generator with the Transpower document
‘Generation Protection at the Interface’.
Responsible party Generator / Transpower
Lead-time 3 months pre commissioning for the final draft
Compliance Clause 4(4a) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code
Show-stopper Yes

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .22
 B3.8 Notices of intention to Connect and Offer

Description If the generating units are greater than 1MW, the Generator submits a
'Notice of Intention to Connect' and a “Notice of Initial Offer” as
appropriate to the System Operator.
Responsible party Generator
Lead-time 4 weeks pre commissioning
Compliance Clause 8.21(2) of Technical Code A (Assets) of of Part 8 (Common
quality) of the Code
Show-stopper Yes
Resources These forms are available via Transpower’s Generation Connection &
Dispatch page 5.

B3.9 Finalising protection and SCADA details

Description Commissioning requires:

 protection coordination sign-off from Transpower, and
 indications and measurements available in Transpower SCADA.
A special meeting to discuss delaying commissioning is held if
protection has not been agreed, or real-time data is not available.
Responsible party Transpower
Lead-time 2 weeks pre commissioning
Compliance Technical Code C (Operational communications) of Part 8 (Common
quality) of the Code
Clause 4(4) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code
Show-stopper Yes

B3.10 Week ahead schedule

Description The System Operator needs to receive a commissioning/testing

schedule one week prior to commissioning.
Responsible party Generator
Lead-time 1 week pre commissioning
Compliance No
Show-stopper Yes

5 https://www.transpower.co.nz/system-operator/resources-asset-owners/generation-connection-dispatch

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .23
 B3.11 Market confirmation

Description This requires setting a minimum confirmation period to the market for
system ride through and other significant system tests when required.
Responsible party Generator
Lead-time 2 days
Compliance No
Show-stopper Yes

B3.12 Day ahead schedule

Description The System Operator needs to receive a commissioning/testing

schedule one day prior to commissioning activities for the next day.
Responsible party Generator
Lead-time 1 day
Compliance No
Show-stopper No
Resources The difference between B3.10 and B3.12 is in Transpower’s Companion
Guide for Commissioning Generation on Transpower’s Generation
Connection & Dispatch page 6.

B3.13 Offer and Dispatch during commissioning

Description The Generator must comply with all the relevant Electricity Market
Trading Arrangements including:
• Complying with offer and dispatch provisions unless agreed
otherwise in an approved Operational Test Plan
• Managing the offer of the commissioning assets in order to
ensure they are dispatched to the loads necessary for
commissioning. At the discretion of the Generator this may
include bidding into the must run dispatch auction 7 or offering
the unit at $0.01/MWh.
Responsible party Generator
Show-stopper No
Resources See D3 for more information on offering and dispatch

6 https://www.transpower.co.nz/system-operator/resources-asset-owners/generation-connection-dispatch
7The must run dispatch auction enables generators to offer generation at $0/MWh, giving the generator the
greatest likelihood of dispatch but it does not confer a guarantee of actually being dispatched. See D6.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .24
 Phase B4. Commissioning
The Generator commissions and performs the required tests - adhering to the timeline in the
agreed commissioning and test plan.

B4.1 Perform tests

Description The Generator commissions the new plant, then performs the tests
according to the timetable in the Commissioning Plan unless agreed
otherwise with the System Operator.
Responsible party Generator
Compliance Clauses 3(7-9) of Technical Code A (Assets) of Schedule 8.3
(Technical codes) of Part 8 (Common quality) of the Code

B4.2 Witness testing to demonstrate compliance with the Code

Description The System Operator may request to witness AOPO tests as required.
Responsible party System Operator
Compliance Clause 8(4) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code

B4.3 Provide test results

Description The Generator provides test results and data to the System Operator
to demonstrate compliance with AOPOs and Technical Codes.
Responsible party Generator
Compliance Clause 8 of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .25
 Phase B5. Post-commissioning
Following commissioning and testing, the Generator provides updated test data to
Transpower, who reviews and provides a final assessment of compliance. The Generator is
required to adhere to all of the ongoing obligations as set out in the Code.

B5.1 Post-commissioning ACS

Description The Generator provides a final updated ACS following the

commissioning and testing.
Responsible party Generator
Compliance Clauses 8.25(4) of Part 8 (Common quality) of the Code
Clause 2(5) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code

B5.2 Submit test reports

Description The Generator submits test reports and data from commissioning
(including unencrypted verified models) to Transpower for analysis.
Responsible party Generator
Compliance Clause 2(5b) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code

B5.4 AOPO and Technical Code non-compliances

Description If any potential non-compliances are identified during either:

commissioning, testing; or production of the test reports they must be
identified to the System Operator.
Responsible party Generator
Compliance Clause 8.29 of Part 8 (Common quality) of the Code.

B5.3 Assessment of compliance

Description The System Operator completes a report on final assessment of

compliance, on request of the generator, based upon the information
provided throughout the ommissioning process.
Responsible party System Operator
Compliance Clause 2(3) of Technical Code A (Assets) of Schedule 8.3 (Technical
codes) of Part 8 (Common quality) of the Code.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .26
C – Market Registration
This section provides an overview of the process for Generators who will be offering electricity
to the market after the new generation has been commissioned. Registration comprises six
actions that must be completed prior to starting commissioning, so is typically conducted in
parallel with the early phases of the commissioning workstream.
The Generator registers with the Electricity Authority and NZX Energy as the appointed
Clearing Manager. The generator will also require a contract with NZX Energy as the
appointed Clearing Manager in order to take or inject electricity from or to the Grid.

C1 Register as market participant

Description All 8 new Generators must register as a market participant, if not

currently registered with the Electricity Authority.
Responsible party Generator
Lead-time 6 months
Compliance Clauses 9, 10, 27-31 of Electricity Industry Act 2010
Resources www.ea.govt.nz/operations/industry-participants/how-to-register-as-a-
participant

C2 Advise dispatch requirements

Description The Generator advises the System Operator of dispatch requirements

Responsible party Generator
Lead-time 6 months
Compliance Clause 13.76 of Part 13 (Trading arrangements) of the Code.
Resources See section D of this guide for a summary of dispatch requirements

C3 Notice to submit offers

Description The Generator submits a 'notice of intention to submit initial offers’ to

Transpower. This includes whether the offer will be by station or unit.
Responsible party Generator
Lead-time 4 weeks
Compliance Clause 13.6(4) of Part 13 (Trading arrangements) of the Code.
Resources A template Notice of Intial Offer is available via Transpower’s website
https://www.transpower.co.nz/system-operator/electricity-market/offer-
and-bid-setup.

8 An exemption to registering as a participant for small generation (<100kw) has been drafted by the Authority but
is yet to be enacted at the time of publication

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .27
 C4 Register for WITS

Description The Generator registers for WITS (the wholesale information and trading
system) with the Clearing Manager (NZX Energy) if it has not already
done so. cadmin@nzx.com

Responsible party Generator

Lead-time 4 weeks
Compliance No
Resources www.ea.govt.nz/operations/wholesale/spot-pricing/wits

C5 Advise clearing manager

Description The Generator advises the Clearing Manager (NZX Energy) of the
upcoming generation connection in order that they are setup in the
Clearing Manager’s system in order to be cleared in the market each
month. cmanager@nzx.com

Responsible party Generator

Lead-time 4 weeks
Compliance Part 14 (Clearing and settlement) of the Code

C6 Advise reconciliation manager

Description The Generator advises the Reconciliation Manager (NZX) of the

upcoming generation connection. Contracts for selling and/ or
purchasing energy may be required. rm@nzx.com

Responsible party Generator

Lead-time 4 weeks
Compliance Clauses15.38 and 15.39 of Part 15 (Reconciliation) of the Code

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .28
D – Dispatch

This section provides a high-level description of the dispatch process. This guide is not
intended to relieve asset owners from identifying and meeting their obligations set out in the
Electricity Industry Participation Code 2010 (Code). Where there is conflict between this guide
and the Code, the Code takes precedence.

D1 Electricity market

The System Operator schedules and dispatches generation on the basis of the bids
and offers made by purchasers and generators. Generators offer electricity into the
electricity market. Purchasers bid for electricity.

D2 Pricing

The New Zealand wholesale market design includes dispatch, based on bids and
offers with locational marginal pricing (nodal pricing) to arrive at the overall lowest
cost dispatch solution. The co-optimisation of the cost and quantity of reserve
needed to cover the loss of generation or HVDC transfer, along with the cost of
energy dispatch, is included in meeting the least cost objective.
The market settles on an ex-post basis with 30 minute trading periods and a price
for each of the over 200 nodes in the market model. Generators are paid for the
amount of output produced in a trading period, at the final price for the trading
period, at the node to which they are connected. Dispatch occurs every five
minutes through formal dispatch instructions sent electronically.
The Electricity Authority is currently developing enhancements to the spot market so
settlement prices will be available in real time.

D3 Generation offers

All generation offered under the trading rules in Part 13 of the Code is dispatched
through the offer process in real time. There is no provision for dispatch rights
based on any bilateral arrangement or hedge arrangements between generators
and retailers.
All generation over 10 MW - if directly grid connected - must offer. Embedded
generation above 10 MW can be required to offer if this will assist the System
Operator in meeting its principal performance objective (PPO). Embedded
generation below 10 MW can be required to provide intended output data if the
Authority agrees this will assist the System Operator in meeting its principal
performance objective (PPO).
Different dispatch rules exist for intermittent (wind and solar) generation and certain
types of co-generation plant, reflecting the characteristics of these generators.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .29
 Participants can change their offer up to ‘gate closure’ 9. A number of schedules are
provided to participants up to a week in advance giving an indication of the likely
dispatch quantities and prices.
There is currently no binding ahead or unit commitment market as in some
overseas jurisdiction.

D4 No right of capacity

A connection to the Grid does not result in any capacity rights for that connected
party. Generators connecting to the Grid should be aware that existing, or future
congestion on the Grid may affect the ability of a generator to deliver its energy to
the market.

D5 No right of dispatch

Connection to the grid and participation in the electricity market does not guarantee
that a generator will be dispatched at all times by the System Operator. A generator
may not be dispatched where:
• there is sufficient lower priced generation to meet demand;
• there are constraints on the power system that limit the amount of electricity
that the generating unit can produce; or
• the generator is non-compliant with the AOPOs and Technical Codes.

D6 Sufficient lower priced generation

Dispatch is based on offer price. Generating plant may not be dispatched if there is
sufficient lower priced generation offered to meet system demand.
At times, clearing prices may drop to close to zero if there is a surplus of generation
that wants to run irrespective of the clearing price. This typically happens at times
of low system demand; overnight in summer, and at other times when there is a
very high proportion of hydro generation relative to total system demand due to full
storage catchments and strong inflows.
Negative priced offers are not allowed; however, there is a Must Run Dispatch
Auction (MRDA) where generators can bid for rights to offer at $0.00 per MWh. The
quantity of generation that can be cleared in this auction is limited to 80% of the
minimum system demand. All other generation must offer at $0.01 per MWh or
above.
Rules for the dispatch of intermittent (wind and solar) generation and type B
cogeneration plant effectively see them dispatched to their current output. However
due to the offer price, system constraints or times of excess generation, intermittent
generation may need to “spill” in the same way that can happen with hydro

9Gate closure is the point at which changes to offers can no longer be made for commercial reasons. For most
generation this is currently 1 hour ahead of dispatch beginning for the applicable trading periods. Clause 13.17 of
Part 13 of the Code.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .30
 generation at times.
Holding rights to offer at $0.00 per MWh from the MRDA does not guarantee
dispatch. Reserve co-optimisation or constraints, could result in dispatch being less
than the quantity offered at times, particularly during periods of low demand. In
some cases, this may put thermal generating units below minimum running limits,
requiring the plant operators to disconnect the generating unit.

D7 Constraints on the power system

Transmission constraints on the Grid may also affect generation dispatch. The
System Operator analyses generation schedule information to identify when and
where a constraint may have to be applied to ensure the power system remains
within capability. The market system will bring on higher cost generation within a
constrained region once a constraint limit is reached.
Details of the permanent transmission constraints applied by the System Operator
are available on this page of our website.

D8 Ancillary services cost allocation

Transpower, as the System Operator, procures ancillary services (instantaneous

reserve, over frequency reserves, frequency keeping, voltage support, and a black
start facility) to meet it’s PPO. The costs of procurement of these services are
allocated to participants as set out in Clauses 8.55 to 8.70 of Part 8 (Common
quality) of the Code.
Some ancillary services costs are allocated to generators:
• The availability costs of instantaneous reserves for a trading period are
allocated to generators when their generating units output is above 60 MW.
• An event charge is payable by generators if their assets cause an under
frequency event.
• Non-compliant generators with dispensations are allocated a share of reserve
costs related to their non-compliance.
Generation plant with certain capability may also be able to be offered or tendered
to provide ancillary services. Please see www.transpower.co.nz/system-
operator/electricity-market/ancillary-services-overview and section B2.3 of this guide
for further information.

D9 Co-optimisation of energy and reserve

The New Zealand power system currently has single generating units of up to 380
MW output dispatched. Single generating units or multiple generators on a single
connection can be constrained back at times due to the co-optimisation of reserve
in the market model.
In determining the least cost solution for each 30 minute trading period, the market
system co-optimises the cost and quantity of instantaneous reserve (reserve)
needed to cover the loss of the largest generating unit connected, group of
generators on a single connection or HVDC at risk transfer at that time. Where the
cost of the reserve to cover the loss of the largest generating unit, group of

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .31
 generators on a single connection or at risk HVDC transfer is more than dispatching
energy from other generators, the market system will dispatch the largest
generating unit, group of generators on a single connection (or adjust the HVDC
transfer by re-dispatching generation in one island to the other) below where it
might otherwise clear based on its offer price alone.
Reserve is offered through the market in a similar way to energy offers. Reserve is
offered as generator response or interruptible load. There can be times where
reserve prices are as high as, or higher than, energy offers. There are also times
when there is insufficient reserve to cover the full output of the largest generating
unit or at risk HVDC transfer. In such situations, large generating units, at risk
HVDC transfer or a group of generators on a single connection, may be constrained
back.
Common situations where generation unit dispatch can be constrained by reserves
include:
• when reserve prices may be high relative to energy prices; and
• times where prices are low and close to zero.
In some situations (i.e. low load), reserve co-optimisation has resulted in large
generators being dispatched below minimum running levels and having to
disconnect.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .32
E – Transmission charges
A generation plant connecting to the Grid will be required to pay charges as follows.

E1 Transpower Services Agreement(TSA) and Concept Assessment statement of

work (SOW)

In.phase A1.3 Transpower and the Generator sign a Transpower Services

Agreement (TSA) as a master agreement for the provision of Transpower Services,
and for the recovery of costs by Transpower from the Generator.
Transpower and the Generator will also sign a Statement of Work(SOW) under the
master TSA. This defines the scope and cost of the Concept Assessment.

E2 Investigations Statement of Work (SOW) under master Services Agreement

In phase A2.3, Transpower and the Generator agree and sign a Detailed Solution
Development statement of work (SOW)). This defines the scope and cost of
investigation to produce the Solution Study Report (SSR).
Depending on the complexity of the project, the investigation may be staged, with a
series of SOWs.

E3 Transpower Works Agreement(TWA)

A Transpower Works Agreement (TWA) is a bilateral contract between a connected

customer and Transpower to cover the costs of any new Transpower assets
required to enable the Grid. This is an unregulated revenue stream for Transpower.
Normally any maintenance or operating costs associated through these assets will
be recovered through the TPM.

E4 Transmission Pricing Methodology (TPM)

Transpower’s business is subject to price and quality regulation under Part 5 of the
Commerce Act 1986. This regulation determines the amount of revenue
Transpower can recover, while the methodology by which Transpower allocates the
annual revenue requirement is regulated by the Electricity Authority under Schedule
12.4 of Part 12 (Transport) of the Code: this is known as the Transmission Pricing
Methodology (TPM)
There are three charge components to the TPM, plus LCE rebates.
Connection charges
A connection asset is any Grid asset that connects a customer to Transpower’s
interconnected transmission network. Connection charges recover the capital,
maintenance, operating and injection overhead component associated with
connection assets.
Interconnection charges
A demand based charge that recovers the remainder of Transpower’s HVAC
revenue requirement. The charge is based on each customer’s contribution to the
regional coincident peak demand (RCPD) in their region.

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .33
 HVDC charges
An injection based charge levied on South Island generators, used to recover
Transpower’s revenue allowance associated with the operating the HVDC
interisland link. This charge was based on each customer’s historic anytime
maximum injection (HAMI), however from September 2015 Transpower began
transitioning in the South Island Mean Injection (SIMI) charge to replace HAMI. The
SIMI charge will first be charged in April 2017 and be used to allocate 25% of
Transpower’s HVDC revenue allowance, reaching 100% of Transpower’s revenue
allowance by April 2020. There will be no HAMI charges for generators connected
after 31 August 2015.
LCE credit
Under Part 14 (Clearing and settlement) of the Code, Transpower receives the loss
and constraint excess (LCE), a surplus generated in the wholesale electricity
market, net of that used for the Financial Transmission Rights (FTR) market. There
is currently no regulation around how Transpower should allocate the funds,
however the current methodology is to allocate the LCE back to the assets that
have created the LCE. For example, where an LCE amount has generated from the
HVDC link, this amount is apportioned back to those of Transpower’s customers
that contribute toward our HVDC revenue. In most cases, this can result in a credit
toward the cost of our customer’s transmission bill.
Information
For more information on the historical TPM rates levied on transmission customers,
see Transpower’s revenue and pricing page, which includes information on our
forecast transmission revenue for future years.
TPM review
At the time of writing, the TPM is under review by the Electricity Authority 10.A new
Transmission Pricing Methodology is under development, more information can be
found on this page of our website.

E5 Electricity industry levy

All registered market participants are required pay an electricity industry levy to
cover the cost of the Electricity Authority’s activities. The levy is payable in monthly
instalments to NZX Energy as the Clearing Manager .

10 See www.ea.govt.nz/development/work-programme/pricing-cost-allocation/transmission-pricing-review

Generation Connection Guide © Transpower New Zealand Limited 2021. All rights reserved .34