Low holiday season demand lowers prices

media release 15 February 2005

Low holiday season demand lowers prices

Lower daily demand in January, on average hydro inflows and above average hydro storage resulted in a decrease in average wholesale market prices over the month. Average monthly prices at the Haywards, Otahuhu, and Benmore reference nodes decreased in January by varying degrees in comparison with December. The average Haywards prices decreased to 3.12c/kWh in January from 4.02c/kWh in December and Otahuhu prices decreased to 3.46c/kWh from 4.36c/kWh respectively.

The monthly average price at Benmore decreased from 3.46/MWh in December to 2.85c/kWh in January. Flows over the HVDC inter-island link were restricted throughout January to the standing limit of 870MW. An unplanned outage of the HVDC occurred between 16:00 and 18:30 on 16 January. During this outage North Island prices spiked to over 50c/kWh in the 17:30 trading period.

In that trading period the price differential between the Haywards and Benmore reference nodes was 50.4c/kWh. Daily demand during January 2005 was at a lower level than that recorded during December 2004 and January 2004. Average daily demand in January 2005 was 93.9GWh compared to 96.1GWh in December and 95.6GWh in January 2004.

Hydro inflows in January were 99% of average for the month and at 31 January total national storage stood at 108% of average for that time of the year. National Storage increased through the first half of January to reach 112% of average on 18 January. National storage remained steady at 112% of average until 25 January when it began to decline to the month end figure of 108% of average.

Summary of Wholesale Electricity Prices Physical Market Daily Average Energy Prices 0 2 4 6 8 10 1-Nov 1-Dec 1-Jan c/kWh Otahuhu Haywards Benmore All figures quoted are in cents per kilowatt hour (c/kWh) as this is the unit measure used in domestic consumers’ power bills.

Aug 2004 Sep 2004 Oct 2004 Nov 2004 Dec 2004 Jan 2005

Otahuhu

Average price 3.31 3.28 3.80 3.80 4.36 3.46

Highest price 110.56 9.81 14.24 12.84 31.32 52.30

Lowest price 0.04 0.04 1.43 1.17 0.23 0.01

Average weekday 3.78 3.32 3.88 3.90 4.22 3.81

Average weekend 2.16 3.19 3.64 3.53 4.67 2.92

Haywards

Average price 3.95 2.97 3.58 3.61 4.02 3.12

Highest price 1201.91 8.62 6.46 13.97 20.24 50.72

Lowest price 0.04 0.04 1.33 1.10 0.21 0.01

Average weekday 3.54 2.99 3.68 3.69 3.84 3.41

Average weekend 4.95 2.89 3.39 3.39 4.41 2.65

Benmore

Average price 2.69 2.67 3.41 3.40 3.46 2.85

Highest price 89.06 6.29 5.98 5.42 16.76 6.93

Lowest price 0.00 0.04 1.27 0.20 0.20 0.01

Average weekday 3.07 2.69 3.51 3.50 3.51 3.20

Average weekend 1.74 2.63 3.24 3.13 3.35 2.29

ENDS

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