Flick Electric CompanyThe Blog

The #CleverFlicker's Monthly Market Update - 26 September 2019

Tēnā koutou, Flicksters!

Spring’s here, and with it, too, that typical, changeable weather. But how was the last month of winter in the electricity world? Here’s all your August info all bundled up.

Lake levels lowering

If you’ve been following our updates, you’ll know that demand for electricity is typically high at this time of year while we’re turning up the heat to combat the cold. At the same time, our hydro storage usually dips as we use lots of that good renewable energy to keep the lights on. That trend is occurring right now as our lake levels continue to drop - at 24 September, hydro storage is sitting at 88% of average for this time of the year. NZ’s largest storage lake, Lake Pukaki, is still looking fairly healthy at around 59% of full, but we’ve seen significant storage drops in the Clutha system which is sitting at 10% of full, and Lake Tekapo which is sitting at 28% of full.

Outages

An outage at the Taranaki Combined Cycle thermal plant in late August meant supply was tight for a while, and Unit 2 at Huntly Power Station is back online after a planned outage (although Unit 1 is now offline for maintenance, until the end of September).

Kupe, one NZ’s largest gas production sites, has an outage planned for November when its operators will be undertaking inspections and maintenance. Genesis also announced that Kupe is in decline (aka running out of gas), meaning that NZ has approximately 11 years of supply left assuming no more gas is found (that’s according to MBIE, and based on the average consumption of the last four years). This news, alongside Kupe’s outage and the Pohokura outage in the new year, is expected to keep the pressure on the gas market.

We love wind!

It’s not so great for that romantic picnic you had planned, but our wonderful wind provides some awesome renewable energy here in NZ, and we’re excited to share that several new wind farms have recently been confirmed: one near Palmerston North and one near Waverley, in Taranaki. Whoop whoop!

Higher demand, higher prices

As winter hit and demand increased, August saw higher spot prices, with an average price of $128MWh (or 12.8 c/kWh). During the early part of August, NZ demand reached its highest half-hour peak for this year, and also had the highest week of overall demand since mid-2016. Crikey! Compared with August last year, our national electricity demand was 2.4% higher, but so far in September average spot prices have been a little lower than August, sitting at around the $120MWh (or 12 c/kWh) level. Overall demand is now falling as the days get warmer and longer, with daylight savings (and summer!) now just around the corner.

What’s up with the weather!?

August was a month of four seasons up and down the countryside, with some areas seeing very cold temperatures and other areas being warmer than usual. A super cold outbreak in early August produced snow to sea level in Southland, with several more snowfalls observed at higher altitudes in both the North and South Islands during the first half of the month. Overall, monthly temperatures were on the warmer side across most of the North Island but were below average for the north and west of the South Island.

How’s spring looking?

According to Niwa’s seasonal outlook, September through to November is likely to see near average or below-average temperatures for the north and west of the South Island, while everywhere else is looking set for near-average temperatures. There’s also a higher chance of cold snaps, especially for the South Island, during the first half of spring. Rainfall levels are looking to be near normal or above normal for much of the country.

Stay tuned for the next update, Flicksters.

P.S. it’s daylight savings on 29 September, so don’t forget to put your clocks forward!