Spring Brings Higher Lake Levels & Lower Prices
11 December 2001
Media Release from M-co, NZEM Market Administrator
Spring Brings Higher Lake Levels & Lower Wholesale Electricity Prices
Spring has arrived in the electricity market. Above average rainfall and considerable snowmelt in late November and early December refilled the hydrological lakes. This, in combination with warmer spring temperatures, helped drive wholesale electricity prices down to levels unseen since the start of 2001.
Storage increased from 55% of the national average at the end of October to 77% at the end of November. By 10 December, lake levels had reached average levels for the first time since January, with national storage totalling 2,941 GWh.
The average half-hour wholesale electricity price for the South Island reference point, Benmore, was 4.20 c/kWh in November, down from 4.86 c/kWh in October. Haywards, the North Island reference point recorded 4.35 c/kWh, a decrease from 4.90 c/kWh the previous month. Otahuhu, often used as an indicator of upper North Island prices, recorded 4.59 c/kWh in November, down from 4.80 c/kWh.
During much of this year the North Island has had to meet some of the South Island's demand for electricity, meaning that electricity was transferred over the HVDC cable between the islands in a north to south flow. December was the first month that this did not occur since March 2001.
Other events of interest during November that influenced the wholesale electricity price included the outage of Contact Energy's Otahuhu B power station for routine maintenance.