A year is a long time in the world of electricity. A lot happens.
And when you’re watching the wholesale electricity market like we are, you see it all: the blink-and-miss spikes, the calm plateaus, the short-lived highs and the lingering lows.
But that’s why we’re in this business. Because over that very same year – despite the ups and downs – if you’re buying electricity with Flick at the wholesale price, your long term gains will be in the black.
So how does it work?
Approximately 80% of New Zealand’s electricity is harnessed from renewable sources, like wind farms, hydropower stations and geothermal plants. By its very nature, that also means that our weather will influence how much electricity these sources generate. In short, lots of wind and rain = lots more electricity (there’s always a silver lining!).
So, what does that mean for you? Basically, it comes down to seasonal supply and demand, which is why it’s so important to look at spot prices and savings over the course of the entire year, not just day-by-day or week-by-week.
So what happens over the year?
In the colder months when the days are short, treacherously wet and windy, and you’re huddled inside by the fire, the wholesale price of electricity drops because there is plenty of wind to spin the turbines and rain to fill the rivers and lakes. Supply is high!
If you’re with a traditional power company though, you won’t notice this increase in supply because you pay a fixed rate. That means that any savings made during these wet and windy months goes straight into the fat wallet of your power company. In fact, it’s more than likely that your power bill will increase because you’re using more electricity to combat the cold weather, while still paying the same fixed price.
But Flick customers can rejoice – the cheaper price of electricity is passed directly on to you! While we might see the occasional higher price or spike (though they’re few and far between), in general, more wind and rain means more savings in your bank account.
But what about in the summertime?
In summer and autumn, when the days are long and warm and the weather tends to be calm and sunny (mostly…), the spot price of electricity increases thanks to less wind and rain. Supply is generally lower. But at the same time, demand for power also decreases – the heaters are turned off, lighting isn’t needed until much later at night, and the washing is dried on the line.
Your power bill under the traditional flat-price model of electricity will generally be lower than usual because you’re using less. By wholesale standards though, the fixed rate prices are still quite high.
For Flick customers, spot prices may be slightly higher than usual. But because you use less electricity over this time, it’s not going to affect your power bill too much. And the spot prices will generally still be lower than what you’d pay on a fixed rate contract. Check out your latest power bill and see how your kilowatt charges compare to the spot prices listed below.
What else happens in the year?
So much! Did you know that there are certain times of each and every day when spot prices are low? At Flick we have our eyes and ears on the market, so we can tell you exactly when the least people are using their electricity (also known as ‘off-peak’ times). Less users means less demand and lower spot prices. And if you’re aware of these off-peak times, you can be a bit more picky about when you use your power each day. Think of the savings over the course of the year!
But what about price spikes?
Occasionally, prices will spike when there isn’t enough low cost electricity in the market to meet demand (for example, if the wind drops and there isn’t enough reserve generation, or if a snow storm rolls in and everyone cranks up their heaters!). But don’t stress – this usually only lasts for one or two 30-minute trading periods before generators release electricity from alternative sources to catch up with demand. If you’re still silently freaking out at the thought of price spikes, have a read of our blog, ‘Price spike 101’ to calm your nerves.
So it really is a long term game?
Yip, it really is. Some weeks you’ll see savings, others you won’t, but so far savings across for our Flicksters are at $498 for the past 12 months (May 2017). That’s huge!
Make the change to Flick: we’re flickin’ confident that you’ll be better off in the long run.