Updated 5th April 2019
It’s been an autumn of real contrasts so far: from long spells of hot and dry weather (on the back of an also hot-and-dry summer), through to the swift and sudden downpours and scary state of emergencies we’ve seen lashing the West Coast and other areas of NZ.
Thankfully, a good dose of rain also fell in the catchment areas for our South Island hydro lakes, giving them a much-needed top up - yippee! So, what does that mean for our Freestyle Flicksters (and you interested FIXIE-ers out there!)?
First came the rain
The intense deluge that hit the South Island last week means we’ve now got some healthy lake levels - according to Transpower, inflows were the biggest recorded since 2013 (check out the big jump in inflows in the chart below)!
In terms of hydro storage, South Island levels have moved out of the 1% risk area (which basically means there was a 1% chance of national energy shortage), and back into the ‘Normal’ range (check out EnergyLink’s hydro reports from 28 March and 4 April). Wahoo!
While it’s a slightly different story in the North Island with Lake Taupō sitting below its historical average, on the whole, lakes are looking good - EnergyLink has advised this week that there’s been a slight increase in North Island storage, and NZ’s total hydro storage has increased significantly over the last two weeks (by 602 GWh at 28 March, and 194 GWh at 4 April), placing it above average at 105% for this time of year.
Spot prices drop
The dry weather conditions and low hydro storage levels of the last couple of months meant that thermal generators have been running at close to capacity to cover the shortfall of hydro generation. As we’d expect, these conditions have been reflected on the wholesale market with spot pricing regularly sitting above $200, but since last week’s rain, we’ve seen spot prices drop, averaging around $135 over the last couple of days. Sounds good, but it’s interesting to note that even with this recent drop, spot prices are still sitting higher than the $89 spot price average of the last 5 years (Jan-March 2015-2019). Crikey!
So, what’s going on? Well, our #CleverFlickers know that spot and hedge prices are influenced by lots of different factors, including rainfall and outages, and this time is no different. With low hydro storage in the North Island, our generation on rivers (like the mighty Waikato) has been reduced. The Taranaki Combined Cycle plant (TCC) is also not currently operating, and Pohokura’s offshore gas pipeline is undergoing maintenance, affecting thermal availability. It’s likely that all of these separate factors will be having an impact on spot pricing.
At the moment, futures prices for the winter are high (in a very small nutshell, ‘futures’ fix the price of energy at a time in the future), suggesting that there’s still uncertainty and risk of outages in the market. Transpower has mentioned there’s a potential risk of small generation shortfalls in May due to generation outages in both islands, as well as transmission maintenance, and this (along with the factors mentioned above) may partly be why.
In good news, Pohokura is due to be back online towards the end of April (weather and operational requirements depending). Yahoo!
Weatherwise, Metservice has advised that April is looking to be drier than usual in the South Island, with near normal rainfall being forecast in the North Island. We’ll be watching to see what impact this has on generation heading towards winter, and we’ll keep our Flicksters posted!
Remember, our super friendly and helpful Customer Experience team is only a phone call (or email, or DM!) away, so don’t hesitate to get in touch with any of your burning questions.
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