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The #CleverFlicker's Monthly Market Update - 8 August 2019

Tēnā koutou, Flicksters!

We’re into the last month of winter (um, whaaat?!) which means it’s time for a look back on the month that was, as well as a wee glimpse into our electricity crystal ball to see what lies ahead. Last month renewables supplied 83.9% of our generation, and NZ’s thermal generation operators haven’t faced any major supply constraints recently - wahoo! So what else has been happening in the wonderful world of electricity?

Hydro’s looking good

Overall, NZ’s hydro storage was higher across the month, sitting above average at 114% by the end of July. South Island storage ended the month at around 117%, and even North Island storage was on the up, sitting at 97% of average for this time of year. Whoop!

Prices higher than historical

Despite there being lots of hydro in the mix and no issues with thermal generation supply, spot prices continued to be high against historical averages, with July’s spot prices averaging $107/MWh (or 10.7c/kWh) in comparison with $76/MWh (or 7.6 c/kWh) of July 2018. And, as was the case last month, prices were steady when there was lots of low-priced wind generation, but prices moved upwards when that fell away. Overall, July’s demand was similar to last year, but the end of the month did bring a new peak demand for this year which also caused a high price spike.

Warmer weather

For lots of spots around the country July was a warm one, and a little bird tells us that monthly temperatures will likely see it rank in the top 5 warmest Julys. Towards the end of the month, though, temperatures dropped, producing several snowfalls, and this build-up of snow storage will be helpful in spring and summer when the weather warms the snow melts, and the resulting water flows into rivers and lakes.

According to Metservice, August is traditionally an unsettled and wet month, with fronts and lows common across the country. The August forecast is for wild westerlies, with the West Coast, as well as Waikato to Wellington likely to be wetter than normal, and cold temperatures in Otago, Southland, the Southern Lakes and Canterbury High Country. Elsewhere we’re looking at near average August temperatures.

Upcoming outages

We’re gazing forward a good few months now, where there are a couple of big outages scheduled for the early part of next year. Transpower has advised they’ll be taking part (or possibly all) of the HVDC link, which transports electricity between the islands, out of service for some major work at various times from January through to April, and there’ll be a number of times when part of the link between Benmore (in the South Island) and Haywards (in the North Island) is out.

But in order to cause as little disruption as possible, the four bipole outages (where the entire HVDC link will be down) have been rescheduled for Saturdays (January 18, February 1, and March 7 and 21), when demand is lower and there’s less risk of generation shortfalls.

It’s also been announced that production from the Pohokura gas field will stop for about 14 days next March (between March 11 and March 24) for inspections and maintenance.

Catch you at the next update, Flicksters!