Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Electricity Market Bried Dec 22

Termination of the Reserve Generation Capacity Agreement – Transfer of Whirinaki Ownership
The ownership of the Whirinaki generating station will transfer from the Crown to Contact Energy at 3pm today, Thursday 22 December 2011. Accordingly, the Reserve Generation Capacity Agreement between the Electricity Authority and the Crown will terminate at 3pm. Contact Energy took over the submission of offers into the market at 1pm today for trading periods starting from 3pm today.

The Crown’s transfer of ownership of the Whirinaki generating station is in accordance with the recommendations of the 2009 Ministerial Review of Electricity Market Performance.

Since its establishment a little over a year ago, the Authority has introduced a number of measures to enhance market incentives for efficient management of tight supply situations. The key initiatives are outlined below.

Customer Compensation Scheme

The Customer Compensation Scheme (CCS) requires retailers to pay qualifying customers $10.50 per week during Public Conservation Campaigns (PCCs). They may also offer their own compensation schemes linked to individual customers’ conservation efforts. In addition, the scheme sets a firm trigger for when a PCC may be implemented, and assigns clear responsibility for triggering and ending a campaign to the system operator.

The $10.50 component of the CCS encourages retailers to develop innovative schemes to encourage consumers to conserve electricity ahead of any need for PCCs, and it reduces incentives on retailers to call for PCCs when they are not needed. These measures should result in electricity conservation campaigns occurring less frequently than in the past, and should strengthen consumer confidence in the reliability of supply.

Scarcity Pricing
Scarcity pricing introduces a $10,000/MWh price floor and $20,000/MWh price cap to the spot market when emergency load shedding occurs throughout one or both islands.

The scarcity price floor is intended to give investors in last-resort generation plant, and investors in demand response capability, confidence that emergency load shedding will not unduly suppress spot market prices and undermine the business case for investing in those resources. This promotes reliable supply by the electricity industry, which reduces the risk of emergency load shedding occurring in the first place. The scarcity pricing initiative is scheduled for implementation by June 2013.

Stress Testing
The stress testing regime requires parties buying from the clearing manager, and consumers directly connected to the national grid, to produce a report each quarter on their spot price risk exposure and to report their stress test results to their board. An independent registrar will provide risk exposure measures to the Authority in a form that ensures individual parties cannot be identified by the Authority. The Authority will publish the stress test results and market statistics.

Stress testing makes it clear that parties buying electricity on the spot market do so knowing the risks they are taking, and that they are solely accountable for the consequences of their risk management decisions. Consequently, purchasers will be encouraged to better manage their risk position through means such as improved demand response and appropriate hedge cover, which in turn will improve the reliability of supply.

More information on these market improvements is provided at:

© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news