Electricity Price Index at its lowest point
October sees the M-co Electricity Price Index at its lowest point of the year
On 24 October, the M-co Electricity Price Index1 reached its lowest point of the year at 2.19c/kWh. This reflected the lower demand and steady hydro conditions at the time. However, the index has since moved steadily upwards due to changed market conditions.
Spot prices on the wholesale electricity market decreased in the early weeks of October, as warming temperatures led to decreased demand. However, a combination of a key thermal power plant outage, maintenance on the HVDC inter-island connector and below average inflows created upward pressure on prices over the final 10 days of the month. Consequently, daily average prices at the end of October were at similar levels to those at the beginning of the month.
The average price for October at the Haywards reference node was 3.23 c/kWh, down from September’s average of 5.19 c/kWh. Benmore, the South Island reference node, also decreased from 5.05 c/kWh in September to 2.87 c/kWh in October.
Otahuhu, a typical upper North Island reference node, decreased to 3.66c/kWh in October from 5.30c/kWh for the previous month. In October the average price differential between Benmore and Otahuhu was 28%, compared to 5% in September.
This can be attributed to both increased South Island generation output and a higher frequency of transmission constraints.
Nationwide hydro storage increased from 2195 GWh on 1 October to 2260 GWh at the end of the month. Despite this, storage decreased to 91% of average for this time of the year, due to inflows for the month being only 89% of average 1 The M-co Electricity Price Index is a seven-day rolling average of the load-weighted electricity price.
The average daily demand across New Zealand was 99.3 GWh, down from 103.5GWh in September. Demand was slightly above the average for October 2002, which reached 99.1 GWh.
On 24 October there was a maintenance outage at Otahuhu B, Contact Energy’s 375MW thermal power station. The outage finished on 3 November. In addition, one half-pole of the HVDC link was out of commission for maintenance from 29 October to 5 November, reducing the maximum northward capacity from 1040MW to 824MW.