Dry March quarter impacts electricity supply and demand

Media release

10 June 2015

Dry March quarter impacts electricity supply and demand

The Ministry of Business, Innovation and Employment’s latest New Zealand Energy Quarterly shows that hydro generation was 6.2 per cent lower than in previous March quarter.

“The large drop in hydro generation for the March 2015 quarter was a consequence of a fairly dry first quarter of 2015,” said MBIE’s Manager of Modelling and Sector Trends, Bryan Field.

“Wind generation was also down from the previous March quarter by 7.9 per cent, whereas geothermal generation was 13.6 per cent higher than in the previous March quarter,” he said.

Renewable energy contributed 76.9 per cent of New Zealand’s electricity, with coal generation, up by 92.4 per cent from the previous March quarter, bucking its recent declining trend. Gas generation was down three per cent over the same period.

“The dry weather around parts of New Zealand also affected demand, with the electricity consumed by the agriculture, forestry and fishing sectors up by 20.6 per cent from the previous March quarter as a result of higher utilisation of irrigation,” Mr Field said.

Overall, electricity demand during the March quarter 2015 was up by 0.7 per cent from the previous period. The large increase in agriculture, forestry and fishing consumption, and a 2.6 per cent increase in commercial demand, was balanced by a 2.4 per cent decrease in industrial demand and a three per cent decrease in residential electricity demand.

MBIE also released the latest data on average sales-based residential electricity cost for the March year 2015, and the latest Quarterly Survey of Domestic Electricity Prices (QSDEP) indicator for the June quarter 2015.

Average sales-based electricity cost data shows the average residential cost per unit of electricity used was 3.8 per cent higher than in the previous March year. The lines charge increase that occurred in April 2014 was responsible for the majority of this increase, with lines charges (covering transmission and distribution) increasing by 6.3 per cent over the March year 2015. The energy and other retail cost component of the average residential cost per unit increased by two per cent over the same period.

The QSDEP indicator shows that on a national average, lines charges increased by just 0.2 per cent, and the energy and other retail cost component increased by just 0.1 per cent. Overall, this means that average residential tariffs increased by just 0.2 per cent from the June quarter 2014 – the lowest ever annual increase in the QSDEP indicator.

“Many retailers have committed to not increasing the energy and other retail cost component of residential tariffs, therefore over the next year we expect residential electricity tariffs to remain relatively flat out to at least the end of March 2016,” said Mr Field.

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Read New Zealand Energy Quarterly: http://www.med.govt.nz/sectors-industries/energy/energy-modelling/publications/new-zealand-energy-quarterly

Read about electricity cost and price monitoring: http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/prices/electricity-prices

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