Electricity Prices Climb

10 July 2001

Average wholesale electricity prices climbed markedly in June, reflecting continued high demand and prolonged periods of below average rainfall into the country’s main hydro lakes. Demand for electricity in June was around 4.7% higher than this time last year and around 4.8% higher on average than in May.

While national hydro storage levels increased during June, this was predominantly due to the conservation of water in the main hydro lakes rather than their replenishment through high rainfall. At the end of the month national storage was at 1,970 GW/h, 77% of the average for that time of year, with South Island storage at 85% of average.

Intermittent periods of rain during the month saw some South Island hydro lake levels increase. However, the larger lakes did not benefit significantly from wet spells. Lakes Tekapo and Pukaki, which account for around 60% of New Zealand’s total storage capacity for hydro-electric generation, recorded storage levels of 49% and 51% respectively at the end of the month.

The capacity of the transmission lines transporting electricity down to the Wellington region was increased in mid June. This eased line constraints in the area and allowed more electricity to flow through to the South Island, helping to lower wholesale prices toward the end of the month.

The average monthly price at Benmore, the South Island reference point, more than doubled in June to 16.97 c/kWh, up from 7.45 c/kWh in May. The lower North Island reference point at Haywards recorded a similar price increase to 16.61 c/kWh, up from May’s figure of 7.55 c/kWh. The average price at Otahuhu, the reference point for the upper North Island, also rose to 14.90 c/kWh from 7.39 c/kWh in April.
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