A fundamental requirement of competitive and efficient electricity markets is access to reliable data and performance metrics.
This Electricity Market Information website (EMI) is the Electricity Authority's avenue for publishing data, market performance metrics, and analytical tools to facilitate effective decision-making within the New Zealand electricity industry.
Payments to generation companies for plant that is constrained on after being instructed to ramp down have increased in recent years. Annual payments to all generators were less than $1 million in both 2015 and 2016. They jumped up to over $2.2 million in 2017 and were more than $5.5 million in 2018. These costs ultimately get passed along to consumers so until 30 April 2019 the Authority is consulting on a proposed Code amendment to remove constrained-on payments for generation that is ramping down. Selected examples of how generation companies are able to structure their offers to ensure they receive constrained-on payments while following dispatch instructions to ramp down are highlighted in a public dashboard.
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.
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.
Late in 2018 New Zealand Aluminium Smelters restarted the fourth potline at Tiwai Point after securing supply for an additional 50 MW of electricity through to December 2022 from Meridian. The potline was last in operation back in 2012. The daily energy demand at the Tiwai node has increased by more than seven per cent reflecting this change in operation.