Some of you may be familiar with a post we wrote on price spikes this time last year. We’ve seen spot prices lift a little of late, and some #CleverFlickers have asked why.
Most Flicksters will know that spot prices go up and down as supply and demand conditions change.
In New Zealand, supply is largely affected by water because we’re lucky enough to produce so much hydro power. So prices tend to go up when there’s less water; plant maintenance going on, putting some of our generation out of commission; or issues with the lines, stopping the electricity getting to where it’s going!
Our resident expert on pricing is our CFO Jurjen. We had a chat to him about what’s been going on over the past few weeks…
Last week, we saw prices go up, why is that?
Jurj: Prices were a little higher than normal in the North Island due to generation outages and maintenance on the lines that connect the generation in the South Island, to customers in the North Island. It’s always a good idea keep an eye on em6live for current spot prices, but remember, the site refers to megawatt hours so divide by 1,000 to get the kilowatt hour price.
Are the prices we are seeing normal for this time of year?
Jurj: It’s pretty normal for power plants undergo maintenance at this time of year. Lake storage was also below average last week – meaning it’s being controlled and held back until there is certainty about our summer weather. Water always becomes more valuable about now. Compared to November/December in other years though, prices are actually pretty normal.