The Electricity Commission last month stated the need to watch overseas developments before regulating smart meter installation in New Zealand, but this week's announcement that all UK households will have smart meters by 2020 was not welcomed by all industry players.

The UK’s Department for Energy and Climate Change’s £8 billion ($NZ18.3million) scheme is designed to see 47 million meters installed in 26 million properties by 2020.

The Electricity Commission faces a serious challenge to its existence from a Ministerial working party announced this morning by Energy Minister Gerry Brownlee at the National Power Conference in Auckland.

In his first keynote speech as Energy Minister since taking the portfolio late last year, Brownlee strongly endorsed the thrust of a Business New Zealand-commissioned report, released yesterday, that questions the role of the EC across its current range of responsibilities.

The Whirinaki diesel fired plant, the country’s generator of last resort, should be taken off the reserve energy scheme and could face relocation or a change in fuel, according to a new report from the Electricity Commission.

In the commission’s review of power generation during last year’s winter, it recommends that the operations at Whirinaki should be analysed to determine whether the three 52MW units at the plant could be more cost effective at another location or with a different fuel supply.

The Electricity Commission is reviewing how the electricity market can be improved in areas such as competition, prices and affordability.

Releasing its options paper today, the commission said it also intended to review at the end of winter how operations in a dry year were managed, given the low storage levels in hydro lakes. That review would look at current arrangements in the lead up to winter, market responses to tight supply, and the reserve energy scheme.