Tēnā koutou, Flickers!
Change is afoot in our industry and we couldn’t be more excited about it! The results of the Electricity Price Review’s (EPR) final report were released at the start of October, and they include a number of recommendations we’ve been banging on about for a good few years now. In this month’s market report we’ve got more details on that, plus all of September’s info. Choice!
First things first - what does the EPR mean for the wholesale market?
On the whole, it’s looking like a promising start! The Government’s final EPR report has made a couple of recommendations that we’re hopeful will have an all-round positive impact on the wholesale market, including:
Improving the availability and disclosure of information on the wholesale electricity and gas markets.
Enforcing market-making (the process in which NZ’s 4 biggest gentailers help to set market prices, and it’s currently a voluntary one) in the hedge market, unless the industry can effectively bring in an incentive-based scheme (which, to be honest, isn’t likely).
What else? There are also recommendations about the monitoring of wholesale contract prices, as well as how gentailers disclose the profitability of their retail activities. Good stuff, we reckon!
To find out more about the EPR and how it will affect you, take a read of our recent blog.
Hydro went down, spot prices went up
Our #CleverFlickers out there will know that spot prices go up with demand during cold snaps, and we saw evidence of that in early October when spot prices were pushed up due to a lack of major inflows, and hydro storage sitting at 80% of average. Because hydro storage was so low, our more expensive thermal plants picked up the slack, with prices averaging 18c/kWh, and price spikes during peak demand times.
Good news though - things are trending up for our hydro storage which is now sitting at 90% nationally, and last week spot prices averaged 11.3c/kWh. Spring’s warmer weather has seen the demand for power falling with each passing week – while still high, the spot price average has dropped to 13.44c/kWh for the month so far.
As we mentioned in our last update, Aotearoa’s largest gas production site, Kupe, has a planned outage for November when its operators will be undertaking inspections and maintenance.
Plus, there are more outages on the cards in the coming weeks, including:
A planned outage at Unit 5 at Huntly Power Station between 15-22 November
A planned outage at Taranaki Combined Cycle thermal plant between 10 November and 1 December
And hydro outages at Tokaanu, Manapouri and Ohau.
In light of these outages, Transpower has announced that generation supply could be tight in the coming weeks, particularly between 13-22 November.
What else? Well, 2020 is fast approaching (eek!), and we know that there are scheduled HVDC outages between January and April 2020, as will a Pohokura gas outage during 11-14 March 2020.
How’s the weather?
According to Niwa’s seasonal outlook, temperatures look likely to be pretty much average for most of NZ, with the only exceptions being in the west and north of the South Island, where temperatures are likely to be average or below-average. Rainfall looks set to be around normal for most of New Zealand.
Next week we’ll take a look back on the winter that was - stay tuned, Flicksters!