There were 7 contracts traded that were eligible to include in the index calculations this month, which was a step up from last month which had only 3 contracts.
Electricity Contract Indexes May 2021, Issue 146
By Claudia McHerron, June 15, 2021
There were only 3 contracts traded that were eligible to include in the index calculations this month, following the trend in April of low volumes of trading.
Our LCOE Calculator Works Out the Cost of New Generation
By Greg Sise, June 14, 2021
Our prototype LCOE calculator is now live!
Hedging Fundamentals Part 4
By Paul Chapman, May 28, 2021
“Are there any risks in using CFDs to hedge wholesale electricity prices?”
Electricity Contract Price Increases?
By Greg Sise, May 21, 2021
Electricity contract prices have risen, and could rise further. Every month we publish the electricity contract index, but I thought it's instructive to delve deeper into the underlying contract data.
Hedging Fundamentals Part 3
By Greg Sise, May 16, 2021
In New Zealand the contract-for-differences (aka CFD) is the most common off-exchange method for hedging the price of electricity traded on the wholesale market for a specified quantity and time period. In other words, the CFD is a fundamental tool in the hedging toolbox.
Who's setting the Gas Price?
By Greg Sise, May 7, 2021
"Electricity prices are high at present. Gas prices are also high. Who’s setting these prices?”
Energy Link Electricity Contract Indexes April 2021, Issue 145
By Claudia McHerron, April 30, 2021
There were 8 contracts traded that were eligible to include in the index calculations this month, but the last of these was on the 6th April, and since then nothing has traded in the OTC market (or at least not that meets the index criteria for size and duration).
Levelised Cost of Energy - What is it?
By Greg Sise, April 23, 2021
“We’re about to launch a new, free tool on our web site. It calculates the LCOE of your generation project. But what the f*&% is it?"
Hedging Fundamentals Part 2
By Paul Chapman, April 18, 2021
This blog post follows on from Hedging Fundamentals Part 1 and answers "Why are spot prices in the NZ wholesale electricity market so volatile?"
What's behind the high spot prices?
By Greg Sise, March 28, 2021
What’s behind the high spot prices? We take a more detailed look at who is setting prices, when and why.
Energy Link Contract Indexes March 2021, Issue 144
By Claudia McHerron, March 19, 2021
There were no FPVV contracts traded over the last month, so the FPVV index goes sideways this month, i.e. it defaults to last month's value of 10.2 c/kWh. Strong CFD growth has brought the main index up to 12 c/kWh.
Hedging Fundamentals Part 1
By Paul Chapman, March 19, 2021
This blog post breakdown the fundamentals of hedging and provides an answer to the question "What is a hedge?".
Selling generation into the market
By Greg Sise, March 12, 2021
If you have some small-scale generation, how do you sell its generation output? This post briefly describes some common scenarios.
Energy Link Contract Indexes February 2021, Issue 143
By Michael Cawte, February 24, 2021
Both the FPVV and CFD sub-indexes rose sharply this month, and the main index jumped almost 16% as a result. Hardly surprising, given the seemingly inexorable upward movements in spot and futures prices.
What probability did futures traders give to Tiwai staying?
By Greg Sise, February 1, 2021
We now know that the Tiwai smelter is likely to be around for another four years to December 2024; but prior to 14th January we didn’t know this. What do futures prices tell us about futures traders’ views of the probability of Tiwai staying longer than August 2021?
Tiwai Remains Another ‘X’ Years
By Greg Sise, January 21, 2021
The Tiwai Pt aluminium smelter has received a stay of execution, with the news last week that Meridian Energy and the smelter’s majority owner, Rio Tinto, reached agreement on 13th January to amend their existing agreement so that its termination date is now 31st December 2024, and not August 2021.
Energy Link Contract Indexes January 2021, Issue 142
By Greg Sise, January 21, 2021
The FPVV sub-index went up this month, but the CFD sub-index went down. The net result was the main index more-or-less went sideways, increasing by just over 1% to 8.9 c/kWh.
Tiwai Closure – Its Impact on the Electricity Sector and on Prices
By Greg Sise, July 13, 2020
Rio Tinto, the majority owner of the Tiwai Pt aluminium smelter, announced last Thursday, 9th July, that it has terminated its electricity contracts with Meridian Energy and that it will close the smelter by August 2021. This will have a profound impact on the electricity sector which will be felt for years to co
Tiwai Closure – Unanswered Questions
By Greg Sise, July 13, 2020
Rio Tinto, the majority owner of the Tiwai Pt aluminium smelter, announced last Thursday, 9th July, that it has terminated its electricity contract with Meridian Energy and that it will close the smelter by August 2021. The announcement is short on details, and many questions remain unanswered.
Covid-19 and Electricity Demand
By Greg Sise, April 21, 2020
A thought on everyone’s mind these days, or at least those involved in electricity supply, is what is Covid-19 doing to electricity demand? Well, the answer to this question is not simple, and we are working on it, but the answers will come highly qualified by the uncertainty surrounding the disease in New Zealand, the econ
Covid-19 Business Continuity
By Greg Sise, March 25, 2020
Energy Link is working as normal, from home, during the Alert Level 4 lock-down, while we all get the virus under control. Contact us as normal, via email landline or mobile. That’s really all you need to know, but more details are in the blog.
The Big Q1 2020 Futures Spread
By Greg Sise, December 2, 2019
The HVDC link will be operating with only one pole (one half) in service for most of the first quarter of 2020, to allow essential maintenance to be carried out. When this was first announced back in December 2017, futures prices barley moved, but they now show an expectation of a price difference between upper north and mid-south islands in the vicinity of $55/M
Well done OMV!
By Greg Sise, October 21, 2019
The gas market is opaque relative to the electricity market, but recent major gas field outages have prompted moves to improve transparency. One of the first improvements is an initiative by the gas industry regulator, the Gas Industry Company, which
Are Higher Electricity Prices Here to Stay?
By Greg Sise, September 27, 2019
Spot prices surged late last year when there was a prolonged, unplanned outage at the Pohokura gas field offshore Taranaki. But they haven’t come back down to where they were prior to the gas outages. In this post we look at the reasons why and ask the question on everyone’s mind – will they remain high?
The three most important issues for the 2020s - #3, Extreme Renewables
By Greg Sise, July 16, 2019
This is the third in a series of three posts on what I see as the most important issues for the electricity market for the 2020s and beyond. The first issue was woeful lack of disclosure in the gas market, and the second issue was the ineffectiveness of the electricity hedge market. This third and final issue is on the challenge of moving toward extremely high level
The Clean Car Discount
By Greg Sise, July 10, 2019
The government released a consultation paper yesterday on the Clean Car Standard and Clean Car Discount. The Clean Car Standard would require importers of new and used vehicles to lower the average emissions of the vehicles they bring into the country. The Clean Car Discount increases the cost of vehicles t
The three most important issues for the 2020s - #2, The Hedge Market
By Greg Sise, June 10, 2019
This is the second in a series of three posts on what I see as the most important issues for the electricity market for the 2020s. The first issue was disclosure in the gas market, which has as much impact on electricity as it has on gas, and is woefully inadequate. The second issue, and the topic of this post, is the electricity hedge market: how it is not working for new retail
The three most important issues for the 2020s - #1, Gas Disclosure
By Greg Sise, May 2, 2019
This is the first in a series of three posts on what I see as the most important issues for the electricity market, and by association the gas market, for the 2020s. This first post is actually a submission to the Gas Indsutry Company's recent consultation on information disclosure in the wholesale gas market. The GIC documents and all subsmissions can be found at
The Whys and Wherefores of High Spot Prices
By Greg Sise, October 24, 2018
We’ve been asked many times recently why spot prices are so high, so this has prompted me to finally put fingers to keyboard for another blog. The spot prices are a function of low hydro storage, restricted fuel supplies, and plant outages.
Price Spikes Hit the Big Time
By Greg Sise, May 31, 2018
Since 23rd May we’ve seen big price spikes, to over $1,000/MWh at Otahuhu for example, consistently during the peak demand at the end of the day. In this post we take a brief look at what’s causing these spikes.
End of an Era in Exploration
By Greg Sise, April 18, 2018
It’s ironic that this month’s announcement that there will be no new offshore oil and gas exploration permits issued in New Zealand was titled “Planning for the future…”. This announcement was totally out of the blue and if there is a “plan” somewhere, it appears that no one outside of government knows what it is.
Gas versus Coal – ‘Storage Wars’
By Shelley Mackay, March 12, 2018
It’s been a while since our last blog post due to workload and other factors, but it’s a new year and it’s going to be another interesting year in the electricity industry, an industry undergoing change. In this post we look at the recent announcement by Contact Energy of the sale of the Ahuroa Gas Storage facility to First Gas.
The Cost of Inter-island Power Transfers
By Greg Sise, November 27, 2017
I’ve given talks recently at the Energy Trader Forum in Wellington and at the Otago Energy Research Centre’s annual symposium in Dunedin, including an overview of how recent upgrades on the HVDC link have changed the cost of transmission between the islands.
Issue 100 of the Electricity Industry's Best Kept Secret
By Greg Sise, July 19, 2017
The majority of direct and indirect participants in the electricity market, from generators and retailers through to large consumers, aren’t aware that there is an essential piece of market intelligence available free on this very web site. And this month we publish it for the 100th time.
Records Fall as Dry Period Continues
By Greg Sise, July 19, 2017
Inflows into the South Island’s major hydro lakes since February rank as the lowest on record, by quite a margin.
1992 Shortage Revisited
By Greg Sise, June 23, 2017
With the storage lakes falling fast, it got me thinking about other ‘dry year’ events we’ve experienced, which really helps to put the present, and the market, into context.
Competition, the Internet and the Customer
By Greg Sise, May 28, 2017
I was privileged to speak at the Energy Management Association of NZ (EMANZ) annual conference in Wellington last week and showed how market reforms over the last two decades, and now the Internet, are working together to disrupt the retail electricity market.
Should I stay on spot or switch?
By Greg Sise, May 26, 2017
After a long period of low spot prices and low volatility in spot prices, hydro storage lakes are emptying out and it’s a timely reminder that the hydro situation can change very quickly. But it raises the question: when spot prices start to rise, should I stay on a spot pricing plan, or should I switch to a fixed price plan?
Cost on the Line – The rising cost of delivering electricity
By Greg Sise, May 5, 2017
The charges for delivery of electricity (a.k.a. lines charges) include the cost of providing local networks and the transmission grid, and are published by local network companies, typically from 1 April for the year ahead. Now that the dust has settled from the most recent round of price adjustments, let’s take a look at what’s happening to line charges in major centres around the country.