The traded price of a futures contract provides insight into the market's expectation of the spot price for the contract period. A quarterly futures contract begins to trade more than three years before the contract period begins and remains able to be traded right up until the contract period ends, and the contract expires (monthly contracts become available about six months before the contract period). Settlement occurs several days after the expiration date. During the contract period, the price at which the contract trades (orange line) will take into account the information already known about the spot price to-date (blue line) and the market’s expectation of the spot price for the remainder of the contract period. This new report derives the implied spot price for the remainder of the contract period from the bid-ask spread (blue area) and trade (the red line) within the contract period. The example for Otahuhu, Q2 2017, below shows a situation where the market is expecting the spot price to rise during the contract period. Click through to see the implied spot price for the other contracts currently trading (or see the public dashboard).

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.

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.