Market Forecasts
We Can Help Solve Your Big Challenge
A major source of risk for all large players in the electricity market is the volatile spot price of electricity. To manage price risk effectively you need a view on the future evolution of spot prices - a spot price forecast.
While a forecast is essential to understanding price risk, developing one that is comprehensive and accurate requires the deployment of complex market models, an understanding of the related natural gas and carbon markets and the committed time of skilled team members.
Our independent electricity and gas forecasts have set the industry standard since 1997, and are prepared using New Zealand’s fastest and most accurate market models.
If you already produce your own forecasts, then Energy Link’s forecasts will provide you with an independent credibility check, and alternative views of the future.
A comprehensive range of standard forecasts
Energy Link’s range of forecasts encompasses the short term and the long term:
- Price Forecast: electricity price and location factor forecasts 12 months out, with updates published each and every month. The expected prices and percentiles are taken from hundreds of scenarios which take account of demand, inflow and other uncertainties over the coming year
- Price Paths: electricity and gas price paths and location factors for 1 through 16 years out with updates published each and every quarter. The expected prices and percentiles are taken from hundreds of scenarios which take account of demand, inflow, carbon price and other uncertainties over the next 15 years (20 years for gas). The gas forecasts include forecasts of gas reserves and the probability of an LNG terminal being established in New Zealand.
Forecasts and other modelling to your unique specifications
With our EMarket, I-Gen and EMarketOffer electricity market models, and GMarket gas market model, we can produce forecasts customised with outputs and time frames specific to your situation. These assignments can cover periods from next month to the distant future (40 years or more). Or if great accuracy over the very short term is what you need our EMarketOffer model allows us to analyse market conditions down to the half hour trading period at any point across New Zealand’s Grid.
Our standard forecasting methodology
Our forecasting methodology is designed to handle the volatility and complexity inherent in the electricity and natural gas markets. For the longer term Electricity and Gas Price Paths, using the output of our GMarket and I-Gen models, and other energy market intelligence, we first develop our fundamental “base case” scenario. This is our view of what is most likely to occur over the forecast period assuming rational behaviour by existing and potential market participants. We run this scenario through EMarket to produce our base case electricity Price Path.
A range of other scenarios is then developed, with each scenario designed to test the effect of different market conditions on the key base case assumptions. Forecasts are produced for each alternative scenario and their probabilities weighted.
Finally, we provide a comprehensive report on the key inputs and assumptions made in our forecasts, to help you understand the scenarios and to provide insights into key issues such as market participants’ commercial and operating strategies.
Presentation and delivery of the forecasts
Our forecasts are sent by email and hard copy in a summarised form which includes a concise report, charts, assumptions and commentary on the inputs and strategies. The detailed forecast scenario data is also available by email.