Flick Electric CompanyThe Blog

The #CleverFlicker's Monthly Market Update - 22 May 2020

Kia ora Flicksters,

Your friendly Flick team here, coming all the way to you from Level 2! If you’re a Freestylin’ Flickster, you might have noticed there’s been lots going on over on the wholesale electricity market as we’ve moved down the Alert Levels. So what better time to check out what’s been happening, and what might be coming up. Let’s take a look!

Demand

It’s been an interesting time, demand-wise, during COVID-19. While at the beginning of lockdown our demand dropped by around 12.5%, it’s been increasing each week since then as restrictions have eased and businesses have reopened. On our first morning in Level 2, on Thursday May 17th, there was a noticeable increase in morning demand at the usual (pre-COVID) peak times between 7:00 am and 9:00 am, reflecting the changes that have allowed many more businesses and work spaces to open their doors to staff and customers.

As is typical for this time of year, temperatures have dropped across the country as we head towards winter. That’s had an effect on demand, too, as we’ve collectively used more power in our efforts to stay warm and toasty at home - in fact, our residential Flicksters have used around 7% more power compared with this time last year due to the restrictions of COVID-19 and the majority of us working from home. Nationwide, demand for last week was still down 2.5% compared with this time last year, but it’s looking likely that we’re at the tail end of lockdown demand levels.

Hydro

The tough, dry summer has turned into a tough, dry autumn in the North Island, with Lake Taupō hydro storage continuing to drop. It’s been sitting below average since late February, and is now at 21% of full, and 54% of average, due to low inflows. Let’s hope for some North Island rain, pronto!

Thankfully, South Island hydro storage is looking much better, sitting at 99% of average - but the lack of North Island rain has the total available storage for Aotearoa at slightly below average (96%) for this time of the year.

Wind

We’d usually love these calm, still days (especially when you live in windy Wellington!), but unfortunately they come at a price. With a lack of wind for some weeks now, there’s been little in the way of wind generation to support demand, and that’s been a factor in pushing up spot prices on the wholesale market, as other, more expensive forms of generation have needed to be used.

Spot prices

Over the last six months we’ve seen some super low spot prices on the wholesale electricity market, with an average of 6.93 c/kWh from November 2019 through to the end of April 2020 - woah! But the recent combination of low North Island hydro generation, low wind generation and cooler temperatures pushing up demand has seen spot prices move upwards over the last week, to an average of 14.5 c/kWh.

Our Freestylin’ Flicksters out there might’ve noticed the occasional price spike, too, which occurred when there were periods of high demand during morning and evening peaks, combined with low wind generation, which meant we had to utilise our low North Island hydro generation.

(Unsure what a price spike is? No worries - check out our blog here for more information).

Forecast

So what’s ahead for spot prices? Good question! As we all know, COVID-19 has meant that things have been changing rapidly week by week (sometimes day by day!) and that’s been just as true for the wholesale electricity market. Consequently, it also means that our spot price crystal ball isn’t as clear as we’d like, but at the moment it’s looking likely that prices will remain higher.

Early next week MetService is forecasting some rain for dry North Island areas, and while it’s looking like some reasonable rainfall in many regions, unfortunately it’s not likely to be a drought-breaker.

It’s your power now

Keen to explore your price plan options with Flick? Don’t forget that in addition to Freestyle we’ve also got two fixed-rate price plans available, FIXIE and Earnie. You can switch plans at any time from your dashboard, which means it’s super easy to make sure you’re doing what’s best for your household. Sweet!


Got questions? Give us a bell on 0800 435 425 or drop us an email at hello@flickelectric.co.nz. And keep your eyes peeled for the next market update, you #CleverFlicker, you!