Physical wholesale position

Report notes

1. The physical wholesale position report is a companion report to the vertical integration report. While vertical integration doesn't differentiate between an independent seller or purchaser, this report highlights the degree to which a company is long (positive) or short (negative) on physical generation. To say this another way, it shows the proportion of a company's generation or demand that is exposed to the physical wholesale market.

2. Physical wholesale position in this report is defined by (S-P)/max(S,P) where S denotes sales or injection and P denotes purchases or offtake. Thus, the physical wholesale position of a company must lie between a fully independent purchaser or retailer (-100%) and a fully independent generator or seller (+100). A company that has sales and purchases perfectly matched for a time period will have a wholesale position of zero. Changes to aggregate demand or generation can rapidly change the physical wholesale exposure of an individual company. The position measure is derived from monthly reconciliation data (GR-010) produced by the reconciliation manager.

3. The average spot price is made available on the right hand axis so users can explore the potential incentives on participants given their exposure in the physical supply market. However, without knowledge of positions held in derivative markets, such exploration may not be particularly revealing. The average spot price is a simple average of prices in the region and is not weighted by generation or demand. To download spot price data, please see the wholesale energy prices report.

4. Parent companies include activity of subsidiary traders with the clearing manager. The report excludes derivative markets or other financial hedging arrangements. However, due to the physical nature of the following relationships we have included the New Zealand Aluminium smelter with Meridian and the joint venture geothermal operations at Nga Awa Purua and Mokai (Turopaki power company) with Mercury. Please let us know if we have missed any relationships of a similar physical nature.

5. Grouping parent companies enables users to compare the four or five largest incumbent parent companies, either in aggregate or separately, against the rest of the market (small and medium companies). Grouping all companies will simply illustrate that approximately three per cent of sales are generated to meet grid losses. This effect will slightly exaggerate the long physical generation position of grid connected generation companies.

6. Users can select a timescale ranging from trading period to year. The report simply aggregates sales and purchase volumes within these periods to calculate the net physical wholesale position. Trading period resolution is only available for date ranges of less than months and daily resolution for date ranges less than 2 years. Reports can be generated from 1 January 2005 until the end of the latest month when data arrives about the middle of the month following.