News: Blog, Hydro Watch, Electricity market, Hedging

The CFD index pushed up again this month, toward the ASX three-year average, but the FPVV index went down slightly on a greater volume (relative to CFDs). So overall, the main index rose by 1.8% to 11.3 c/kWh.

As we make the transition to net-zero carbon, it’s always interesting see forecasts of emissions in the future. Every time we run our quarterly long-term forecast, the ‘Price Path’, we get updated forecasts of how emissions might change in the electricity sector.

CFD index went down, FPVV index went up, so no change to the overall index this month, which stayed at 11.1 c/kWh ($111/MWh)

The main index continued its fall this month, as did both the FPVV and CFD indexes. The traded volumes in the indexes were relatively low again this month, perhaps as a result of lockdowns, but this may be pure coincidence.

Forecasts of spot prices are an important tool in the hedging toolkit, and this post provides an overview of the role of forecasts in hedging.

The blackout event of Monday 9th August caused a huge amount of negative publicity for the electricity market, but let’s take a closer look at some interesting aspects of this event.

        Total storage increased 283.6 GWh over the last week. South Island controlled storage increased 11.4 % to 1894 GWh; South Island uncontrolled storage increased 6.2 % to 509 GWh; with Taupo storage increasing 63.9 % to 156 GWh.

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.

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.

“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?"

What’s behind the high spot prices? We take a more detailed look at who is setting prices, when and why.

If you have some small-scale generation, how do you sell its generation output? This post briefly describes some common scenarios.

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.

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

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

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 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

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

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.