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News: Blog


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.

Electricity market


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.

Electricity market


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

Electricity market


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.

Electricity market


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

Electricity market


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

Electricity market


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

Gas market


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?

Electricity market, Gas market


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

Electricity market


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

Electricity market, Carbon


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

Electricity market, Hedging


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 

Gas market, Electricity market


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.

Electricity market


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.

Electricity market


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.

Electricity market, Gas market


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.

Electricity market


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.

Electricity market, Procurement, Hedging


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.

Electricity market


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.

Electricity market


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.

Procurement, 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?

Electricity market, Procurement


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.

Procurement, Electricity market


Is the Answer Blowing in the Wind - an Update?

By Greg Sise, April 24, 2017

I was once again privileged to speak at NZWEA’s annual conference held in Wellington last week, updating some aspects from 2016 and posing a paradox for 2017.

Electricity market


Energy Link’s April 2017 Price Path

By Greg Sise, March 27, 2017

Our Price Path is a forecast of electricity spot prices at over 200 nodes on the national grid. The latest version was released last week and covers the period from April 2018 to March 2033.

Electricity market


Energy Exchange Reverse Auctions

By Greg Sise, March 12, 2017

Since launching in August 2016, the Energy Exchange has run reverse auctions covering a range of site types and sizes, proving its ability to deal with the wide range of needs typical of many larger electricity consumers.

Procurement


What drives electricity prices?

By Greg Sise, March 6, 2017

What drives electricity prices? Demand? Fuel costs? Losses? Transmission constraints? Carbon costs? The cost of new generation? Inflows? Well they all have an impact to a certain degree. The time frames vary but the answer in the long run is surprising, especially given that we are currently running at over 80% renewable generation.

Electricity market, Gas market


Back-casting 2016

By Greg Sise, February 26, 2017

One of the many challenges for anyone forecasting electricity spot prices, as Energy Link has done since first trading in 1996, is that some key factors affecting spot prices are fundamentally unpredictable in the short to medium term: inflows to the hydro lakes are a case in point.

Electricity market


2016 in Retrospect

By Greg Sise, February 5, 2017

Over the last 20 years, spot prices in the electricity market were highly volatile. But 2016 will be remembered as one of the least volatile years on record.

Electricity market


Energy Link’s January 2017 Price Path

By Greg Sise, December 22, 2016

This week we released our latest quarterly Price Path, a long term forecast of spot prices, to our subscribers. 2016 has indeed been an uneventful year on the spot market, a function of a warm winter and lots of rain for generation and for pastures. However, the last quarter delivered up some very significant news on the gas front.

Electricity market, Procurement, Hedging


New Zealand’s First Electricity Auction

By Greg Sise, November 21, 2016

Last Thursday 17th November our new Energy Exchange web site ran New Zealand’s first live internet reverse auction for electricity supply for the Southern Hemisphere Proving Ground, attracting bids from six retailers. By Greg Sise, Managing Director


Futures Efficiency and 100% Renewables at the OERC Symposium

By Greg Sise, November 17, 2016

The 10th annual Symposium of the Otago Energy Research Centre (OERC) was held in Dunedin on 10th and 11th November. I presented at the conference, and Fergus Bevin-McCrimmon gave a presentation of the results of his research on the efficiency of electricity futures markets. Energy Link was very pleased to sponsor the prize for the best student presentation, won by PhD candidate Paul Crane for his presentation titled “Helping Support Energy Management Systems at the University of Otago”.

Electricity market, Hedging


2017 Course Dates are Now Available

By Greg Sise, November 17, 2016

Our courses are widely recognised as the most comprehensive in their subject areas.  For 2017 we are running three sets of public courses, all in Wellington.  We are also available to run these courses or customised courses in-house. 


NZ Gas Forum - Electricity Scenarios for Gas Demand

By Greg Sise, November 15, 2016

Gas market


Is the Electricity Futures Market Liquid?

By Greg Sise, October 13, 2016

This is the third and final post in a series which draws on research undertaken in collaboration with the Department of Accountancy and Finance at the University of Otago.  In the first post, we looked at evidence for premia in electricity futures prices.  In the second post we found some surprising drivers of premia observed in futures prices.  In this post we look at liquidity in the futures market, how it has evolved, and what developments or events caused it to change.

Electricity market, Hedging


Energy Link’s October 2016 Price Path

By Greg Sise, September 21, 2016

Yesterday we released our latest quarterly Price Path, a long term forecast of spot prices, to our subscribers.  It was an uneventful quarter since publishing our last Price Path update in July, but this update included some significant revisions of probabilities on extreme scenarios, and a large section on the viability of the thermal fleet.By Greg Sise, 21 September 2016

Electricity market, Procurement, Hedging

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