Abnormally high power prices confirmed
Meridian has denied changing its market behaviour prior to sweeping government reforms, but a nearly 80% yearly increase in wholesale electricity prices suggests that something is definitely in the water.
Meridian has denied changing its market behaviour prior to sweeping government reforms, but a nearly 80% yearly increase in wholesale electricity prices suggests that something is definitely in the water.
A heavy rain dumping in late April left South Island lakes full to the point of overflowing - good news for hydro generators, if not for Queenstown residents.
As a result, average electricity prices for April dropped 28.5% compared to the previous month - but remained 79.5% higher than at the same time last year.
Last week's Forsyth Barr electricity report cites the yearly increase as the best evidence yet of a step increase in wholesale power prices, which have been high since the start of the year.
Hydro conditions in April 2009 were almost identical to April 2010, and a slight increase in demand was more than offset by new ‘must-run’ generation from West Wind and Nga Awa Purua.
The report argues that, given strikingly similar hydro patterns, wholesale electricity prices for April this year should have been lower than at the same time last year.
As of yet, the increase in wholesale prices has not flowed through to the retail sector.
Forsyth Barr analyst Andrew Harvey-Green told NBR that it was difficult to predict when a corresponding rise in retail prices would occur.
“With the ministerial review swapping around where certain assets are, that means there’s more uncertainty in how companies balance their generation and retail load”, he said.
Nina Fowler
Mon, 10 May 2010
Mon, 10 May 2010
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Abnormally high power prices confirmed
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