Stormy weather in August leads to record demand

media release

6 September 2004

Stormy weather in August leads to record demand and increased wholesale electricity prices

In the latter half of August, stormy weather resulted in restricted transmission flows and record demand, pushing wholesale electricity prices upwards.

Flows across the HVDC inter-island connector were restricted throughout the month, initially due to the standing 700MW capacity restriction following an outage on 23 June. From 19 to 28 August, stormy weather resulted in the restriction being tightened to 570MW. As a result of the restrictions, price separation between the islands occurred throughout the month. The highest price differential between Haywards and Benmore occurred on 26 August, when the 18:00 Haywards final price was 88.9 c/kWh higher than the Benmore final price. On 21 August a full outage occurred for seven hours to allow storm damage to be repaired. Combined with another transmission outage in the lower North Island, this contributed to very high prices in the lower North Island, with prices reaching $12/kWh in the 10:30 trading period.

On 17 August, the daily demand reached 126.6GWh, the highest ever recorded. Average daily demand for August was 116.5 GWh, up from 114.5 GWh in July. On 14 days in August, the daily demand exceeded 120 GWh. In comparison, the average daily demand in August 2003 was 108.3 GWh.

August inflows were 109% of the average and by the end of the month storage was 111% of average. Storage levels began the month at 2,953 GWh and by 31 August had dropped 482 GWh to 2,471 GWh.

For more information on electricity prices and hydrological conditions, visit: www.comitfree.co.nz

Summary of Wholesale Electricity Prices

All figures quoted are in cents per kilowatt hour (c/kWh) as this is the unit measure used in domestic consumers’ power bills.

Mar 2004 Apr 2004 May 2004 June 2004 July 2004 Aug 2004
Otahuhu
Average price 3.39 4.57 4.55 3.63 2.86 3.31
Highest price 225.58 14.53 27.26 107.89 109.36 110.56
Lowest price 0.00 0.01 0.12 0.00 0.01 0.04
Average weekday 4.15 4.95 4.71 3.93 3.11 3.78
Average weekend 1.23 3.80 4.24 2.94 2.26 2.16
Haywards
Average price 2.97 4.63 4.42 3.35 2.61 3.95
Highest price 207.66 15.06 25.91 101.82 100.66 1201.91
Lowest price 0.00 1.07 0.11 0.00 0.01 0.04
Average weekday 3.65 5.05 4.56 3.63 2.84 3.54
Average weekend 1.04 3.80 4.12 2.69 2.92 4.95
Benmore
Average price 1.04 4.42 4.26 2.72 1.77 2.69
Highest price 15.99 14.64 24.59 6.39 5.43 89.06
Lowest price 0.00 0.41 0.11 0.00 0.00 0.00
Average weekday 1.20 4.83 4.38 2.83 1.92 3.07
Average weekend 0.58 3.58 3.99 2.48 1.42 1.74

Please note: the average prices quoted in this release are the time-weighted half-hour wholesale electricity prices at the location indicated. Wholesale prices tend to fluctuate in the short term and are set by competitive behaviour in the market. Half-hourly and annual averages are published on www.comitfree.co.nz.

The wholesale electricity price differs from the retail electricity price, which is the price domestic consumers pay retailers for electricity and is the price consumers see on their electricity bill. There are a number of factors, including the wholesale price, that influence retail prices.

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