Wholesale Electricity Prices Rise
Demand for electricity rose slightly during January compared with December as the country packed up their beach bags and headed back to the office. This contributed to a rise in average wholesale electricity prices.
A significant divergence between North Island and South Island prices also occurred during January. Factors contributing to both this divergence and higher wholesale prices, included:
· outages on the HVDC cable, which links the North and South Islands, on 26 and 27 January. This meant a limited volume of electricity could travel North for the period of the outages;
· the Otahuhu B power station not generating for much of January, which meant Auckland's demand had to be met from generation further afield; and
· constraints between Tokaanuu and Whakamaru in the Upper North Island on 18 and 23 January. This caused price spikes in the Upper North Island as limited electricity could get through to meet demand.
The average half-hour wholesale electricity price for the South Island reference point, Benmore, was 1.61 c/kWh in January, up slightly on 1.06 c/kWh recorded in December. Haywards, the North Island reference point recorded 2.98 c/kWh in January, compared with 1.61 c/kWh the previous month. Otahuhu, often used as an indicator of upper North Island prices, recorded 3.78 c/kWh, an increase from 2.15 c/kWh in December.
Lake levels remained at healthy levels during January. Storage increased to 104% of the national average at the end of the month, up from 95% at the end of December, with national storage totaling 3,559 GWh. South Island storage was 2,944 GWh, 99% of average.