This new report shows trends in the proportion of a company's generation or demand that is exposed to the physical wholesale market. The report ignores any derivative or hedge positions held by the parent companies. A measure above zero represents a long position on physical generation while a measure below zero represents a short position on physical generation. The figure below highlights the changing market over time where the aggregate physical generation of the five largest companies unbalanced by their own purchases has been growing. This level peaked at 14.8% for April 2018, well before NZAS (included with Meridian) increased their demand by adding the fourth potline.

The long-dated forward price (i.e. for contracts maturing more than 12 months ahead) has increased by almost $30/MWh (approximately 40 per cent) in the last six or so months. Forward prices at this level are unprecedented in the New Zealand electricity sector, although six and a half years ago in July 2012 it got up to almost $90/MWh. However, trade volumes were fairly low back then. The next two reports highlight a change to the treatment of Tekapo contingent storage in the hydro risk curve framework (that came into effect 29 August 2018) and increased Tiwai demand.

October 2018 was a period of low inflows and reduced thermal fuel availability that resulted in sustained high prices. Several participants joined forces to lodge an Undesirable Trading Situation (UTS) claim in relation to the circumstances and information available to market participants at this time. Taupo inflows have been low since late September 2018, (74 per cent of average from 1 Oct 2018 to 15 Jan 2019) contributing to national controlled storage remaining below average. As 2019 gets underway, prices continue to remain stronger than in recent years.

National controlled storage recovered following significant South Island rainfall in late March. In addition, 220GWh of stored water becomes available on 1 April as it changes from contingent storage (over summer) to active storage available to generation companies. On 29 March the system operator updated the hydro risk curves, raising them slightly. Each update to the 2019 HRCs is presented in a public dashboard on EMI. Official curves and more information on security of supply forecasting is available on the system operator's website.