Author: Briar
Market Update January 2025
The Wholesale Electricity Market
Spot prices in the wholesale electricity market for January increased significantly from December’s very low levels. Average spot prices for the month ranged from $110 in the lower South Island (up from $20 in December) to $122 in the upper North Island ($35 last month).

The following chart shows average weekly spot prices over the last two years. The recent large increase can clearly be seen.

Electricity Demand
Electricity demand in January was lower than what we have seen in recent years, as shown below.

Electricity Generation Mix
Through January, as demand picked up and hydro inflows dropped off, there was an increase in thermal generation in the second half of the month.

HVDC Transfer
Power transfers on the HVDC link connecting the North and South Islands are important both in showing relative hydro positions and the reliance on thermal power to meet demand. High northward flow tends to indicate a good SI hydro position, whereas the reverse indicates a heavy reliance on thermal power to make up for hydro shortages.
With declining South Island hydro storage levels, January saw a decline in northward transfer and even some southward transfer at the end of the month.

The Electricity Futures Market
The Futures Market indicates where market participants see the spot market moving in the future. They are based on actual trades between participants looking to hedge their positions (as both buyers and sellers) into the future against potential spot market volatility. They are also a useful proxy for the direction of retail contracts.
The following graph shows Futures pricing for CY 2025, 2026, 2027 and 2028 at Otahuhu (Auckland) for the last two years.

Note that $100/MWh equates to 10c/kWh.
Forward prices had big increases for all years through January. CAL 2026 ended the month at $207 – up 16% over the month. CY 2027 price was up 13% at $197 while CY 2028 was up 17.5% at $201/MWh.
Known new generation projects are shown below (additions/removals/changes highlighted in bold).

Hydro Storage
Inflows in both the North and South Islands were well below average in January.

These low inflows resulted in energy storage levels falling through the month to end at 3,605GWh (82% full). Storage is now close to the average level seen at this time of year. The following chart shows the latest breakdown of storage across the main hydro catchments.

Security of supply risks increased through January with storage levels decreasing as shown below.

Snowpack
Snowpack is an important way that hydro energy is stored over the winter months and released as hydro inflows in the spring. The following graph shows that the snowpack in the important Waitaki catchment decreased through January and it is currently below the 25th percentile levels seen in the last 30 years for this time of year.

Climate Outlook Overview (from the MetService)
Climate Drivers — El Niño-Southern Oscillation (ENSO) sea surface temperatures have now reached weak La Niña thresholds, but atmospheric conditions have not yet responded. So, whilst we may start to see a more La Niña-like flavour to the weather maps in the next month or two (more northerly lows and warm humid flows), localised climate drivers and potential tropical activity will still play a key role in upcoming New Zealand weather.
The Southern Annular Mode (SAM) and Tasman Sea Index (TSI) tend negative by mid-month, with a change from fine weather under high pressure to more active weather systems across both the North and South Islands, though are likely to trend closer to normal (a mix of fronts and quiet spells) by the end of the month.
Sea surface temperatures are expected to rebound across the country which would add fuel and strength to any incoming weather systems. This includes lows originating in the tropics, which have an increased risk of developing as we progress through February and can deliver boom-or-bust rainfall events, along with bouts of warmth and humidity. While it remains too early to pick any specifics, the highest risk of any tropical influence is from the second into the third week of February, so keep a keen eye northward during this time.
February 2025 Outlook — The month commences with a very conventional summer-time weather pattern, with slow-moving high pressure bringing largely dry conditions across the country, particularly across the western South Island. While periodic fronts will attempt to sweep across the country, high pressure is likely to minimise impacts, leading to increasing soil moisture deficits across most regions. Temperatures are occasionally on the chilly side across some eastern areas in a lingering southerly flow.
Next week sees potential for this dry pattern to persist, though it may come under threat from any systems exiting the tropics. While it only takes one boom-or-bust rain deluge to push weekly rainfall totals notably wetter, any system could just as easily pass peacefully to the northeast with minimal concerns.
The start of week three sees a continued risk for tropical influence, but the weather is expected to trend more seasonal by the end, with a mix of dry highs and quick-moving lows. Temperatures are likely to fluctuate with these features, but overall trend close to normal.
The final week of February sees quite seasonable weather, with the usual sequence of high pressure interrupted by brief weathermakers, and the month may end on a rather average note.

The Wholesale Gas Market
Spot gas prices in January climbed gradually at the start of the month before jumping up from the middle of the month on. Prices for the month averaged $10.75/GJ – a 39% increase compared to December. Average prices were 29% lower than they were at the same time last year.

On the supply side, most fields maintained output through January or fell slightly. The exception was Turangi and Kowhai which increased from around 35TJ/day at the start of the month, to around 64TJ/day later in the month. Maui production reduced slightly over the month falling to 53TJ/day. Pohokura maintained output, averaging around 28TJ/day. Kupe also held its output at around 42TJ/day. McKee/Mangahewa maintained its output at 61TJ/day.
The following graph shows production levels from major fields over the last seven years.

Through much of January, Methanex used close to 95TJ/day but fell closer to 85TJ/day towards the end of the month. Huntly usage increased markedly – from 17TJ/day at the start of the month up to more than 50TJ/day at the end. TCC remained idle for the month and Contact Energy has advised that it has no gas contracted to enable TCC to run. There is talk that Genesis has swapped some contracted gas with Methanex, “banking” some gas if required for this winter.
The following graph shows trends in the major gas users over the last six years.

Gas storage is becoming increasingly important as falling production coincides with more variable demand, particularly from gas-fired electricity generation. The following chart shows how storage at Ahuroa decreased through January but it remains at the highest level it has been at this time of year over the last few years.

Internationally, LNG netback prices ended the month at $19.46/GJ – down 1.5% from last month. Forecast prices for 2025 were down 2% at $19.98/GJ. Forward prices for 2026 were flat at $17.44/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”).

New Zealand does not (yet) have an LNG export/import market, so our domestic prices are not directly linked to global prices. With recent gas supply issues, the Government is now talking about the possibility of facilitating the building of an LNG import facility.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last four years as well as forecast pricing for the year ahead. Futures pricing increased again over the last month.

The other main contributing factor to LPG prices in New Zealand is the exchange rate against the USD. The exchange rate was volatile in January ending the month near where it began – just above 0.56, near the lowest levels seen in recent years. This would tend to push up LPG prices when quoted in NZD.

The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, higher. Prices in January fell, ending the month at US$118.5/T – a 5% decrease on the December close. These prices are finally returning to levels close to what we expect to see, as shown in the following graph of prices over the last 10 years.

Like gas, the price of coal can flow through and have an impact on the electricity market. In October Genesis reported that it planned to import at least 270,000 tonnes of coal by March to help secure electricity supplies going into next winter. It had previously aimed to stockpile 350,000 tonnes, but now says it wants to hold about 500,000 tonnes to cover peak autumn and winter electricity demand in 2025. Genesis says that 500,000 tonnes is the equivalent of about 1,000GWh of electricity storage or 22% of maximum hydro storage in New Zealand.
Carbon Pricing
New Zealand has had an Emissions Trading Scheme (ETS) in place since 2008. It has been subsequently reviewed by several governments and is now an “uncapped” price scheme closely linked to international schemes. However, there are “upper and lower guard rails” set up to prevent wild swings in carbon price that act as minimum and maximum prices. These increased in December 2023 to $173 and $64 respectively. Carbon prices increased 3% in January to $63.7.

As the carbon price rises, the cost of coal, gas or other fossil fuels used in process heat applications will naturally also rise. Electricity prices are also affected by a rising carbon price. Electricity prices are set by the marginal producing unit – in NZ this is currently, typically coal, gas or hydro generators, with the latter valuing the cost of its water against the former. An increase in carbon prices can lead to an increase in electricity prices in the short to medium term (as the marginal units set the price). A carbon price of $50/t is estimated to currently add about $25/MWh (or ~2.5c/kWh) to electricity prices. In the long term, the impact should reduce as money is invested in more low-cost renewables and there is less reliance on gas and coal-fired generation.
EU Carbon units increased in January to 84 Euro/tonne – up 15%.
About this Report:
This energy market summary report provides information on wholesale price trends within the NZ Electricity Market.
Please note that all electricity prices are presented as a $ per MWh price and all carbon prices as a $ per unit price.
All spot prices are published by the Electricity Authority. Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- Transpower publishes a range of detailed information which can be found here: https://www.transpower.co.nz/power-system-live-data
- The Electricity Authority publishes a range of detailed information which can be found here: https://www.emi.ea.govt.nz/
- Weather and Climate data – The MetService publishes a range of weather-related information which can be found here: https://www.metservice.com/
Disclaimer: This document has been prepared for information and explanatory purposes only and is not intended to be relied upon by any person. This document does not form part of any existing or future contract or agreement between us. We make no representation, assurance, or guarantee as to the accuracy of the information provided. To the maximum extent permitted by law, none of Smart Power Ltd, its related companies, directors, employees or agents accepts any liability for any loss arising from the use of this document or its contents or otherwise arising out or, or in connection with it. You must not provide this document or any information contained in it to any third party without our prior consent.
About Smart Power:
Smart Power is a full-service Energy Management consultancy. Apart from Energy Procurement, Smart Power can also provide:
- Technical advice on how to reduce your energy use & emissions
- Sustainability Reporting
- Invoice Management Services
We also offer boutique energy and water billing services for landlords/property developers.
Contact us here or call one of our offices to talk to our experienced staff about how we can assist you with achieving your energy goals.
© Copyright, 2025. Smart Power Ltd
Market Update December 2024
The Wholesale Electricity Market
Spot prices in the wholesale electricity market for December were close to the very low levels seen in November. Average spot prices for the month ranged from $20 in the lower South Island (down from $24 in November), up to $35 in the upper North Island (unchanged from last month).

The following chart shows average weekly spot prices over the last 2 years. The extreme highs and lows over the last 6 months can be clearly seen.

Electricity Demand
Electricity demand in December started the month at a higher level than recent years then dropped off towards the end of the month as businesses shut down for the Xmas break.

Electricity Generation Mix
Through December increased geothermal and wind generation enabled hydro generation to reduce and thermal generation to back off to almost zero later in the month.

HVDC Transfer
Power transfers on the HVDC link connecting the North and South Islands are important both in showing relative hydro positions and the reliance on thermal power to meet demand. High northward flow tends to indicate a good SI hydro position, whereas the reverse indicates a heavy reliance on thermal power to make up for hydro shortages.
With high South Island hydro storage levels, December saw continued strong northward transfers and very little southward transfer.

The Electricity Futures Market
The Futures Market provides an indication of where market participants see the spot market moving in the future. They are based on actual trades between participants looking to hedge their positions (as both buyers and sellers) into the future against potential spot market volatility. They are also a useful proxy for the direction of retail contracts.
The following graph shows Futures pricing for CY 2025, 2026, 2027 and 2028 at Otahuhu (Auckland) for the last 2 years.

Note that $100/MWh equates to 10c/kWh.
Forward prices were largely flat for all years through December. CAL 2025 ended the month at $169 – up 0.5% over the month. CY 2026 price was down 1.5% at $179 while CY 2027 was flat at $174/MWh. CY 2028 finished the month down 1% at $171/MWh.
Known new generation projects are shown below (additions/removals/changes highlighted in bold).

Hydro Storage
Inflows in the South Island were again above average in December. The North Island had lower than average inflows for the month.

These continuing high inflows resulted in energy storage levels climbing at the start of December reaching a maximum level of 4,253GWh (96% full) on the 18th Dec before falling back to 4,171GWh at the end of the month. Storage remains well above the average level seen at this time of year. The following chart shows the latest breakdown of storage across the main hydro catchments.

Security of supply risks decreased further through December with storage levels increasing as shown below.

Snowpack
Snowpack is an important way that hydro energy is stored over the winter months and released as hydro inflows in the spring. The following graph shows that the snowpack in the important Waitaki catchment decreased through December (noting that the latest update is mid-month), however remains close to the mean levels seen in the last 30 years for this time of year.

Climate Outlook Overview (from the MetService)
Climate Drivers — Whilst the El Niño-Southern Oscillation (ENSO) often dominates the climate driver conversation, local drivers such as regional sea surface temperatures and the Southern Annular Mode (SAM) often take precedence at times where ENSO is not particularly strong, and this is what we have been seeing and are expected to see over coming months.
Whilst conditions in the central pacific will exceed weak La Niña thresholds in January 2025, the event is likely to be too short-lived to be declared as an official event (note that oceanic and atmospheric ENSO indices need to persist across three months to be declared). So, whilst we may start to see a more La Niña lilt to the weather maps in the first quarter of 2025 (northern lows and anomalous NE quarter air flows), you can expect to see significant spells of sub-seasonal variability driven by other local drivers like the SAM. A spell of persistent negative SAM in early December drove all our westerly weather through that period.
Of critical importance this summer are the very warm waters surrounding NZ, and in genesis regions for weather systems in the Coral and Tasman Seas. Sea surface temperatures currently sit some 1-3C warmer than normal here, and these warm waters will provide ample fuel for any developing low-pressure systems. That these waters are so much warmer than normal means any low pressures moving onto NZ are likely to have the capacity to deliver bursts of very heavy rainfall alongside unusually warm and muggy conditions.
Note that whilst we haven’t seen a Tropical Cyclone (TC) form in the SW Pacific in November or December, we must remain vigilant until the end of the TC season in April 2025. As per the NIWA/MetService TC Outlook, normal to elevated activity for New Zealand remains forecast this season.
January 2025 Outlook — December volatility could persist well into January, with a real mixed bag of weather expected to continue and no long-lived summer high-pressure cell coming into focus just yet.
Indeed, the first two weeks of January look to bring a succession of weather systems from both the Southern Ocean and Tasman Sea with SAM potentially fluctuating negative once more. So, more of the same, with a couple days of settled, warm weather interrupted by rain, wind and cooler spells in the wake of any weather fronts. Note that lows could be quite slow to clear east of the country, as we saw through late December, and this could bring some further notable falls to already wet areas in the east of both islands, whilst increased cloud cover and prolonged spells of SE winds also drive temperatures below seasonal norms during early January in these areas. Western areas of the South Island could well see dry anomalies early in the month, much like late December, with these weather systems not yielding particularly well here.
As we head through mid-January, hints that ridging could become more common-place across northern Aotearoa, holding the worst of any active weather further south and west across central and southern NZ, but widely it remains rather unsettled and showery with a wetter than normal bias across the bulk of NZ through the back half of January. If that northern ridge can push southwards with vigour, there is a chance of some more widespread settled, dry weather in this period but that remains a big if at this early stage.
Despite a plethora of weather systems rolling through, with seas surrounding the country so warm overall we would expect a warmer-than-normal month to play out for most of the country overall, despite those cooler anomalies signalled early in January in the east. Muggy, warm nights could well be quite commonplace across the month too. Rainfall patterns are likely to look near to wetter than normal quite widely, with eastern regions most likely to tap into wet anomalies in January.

The Wholesale Gas Market
Spot gas prices in December continued at the very low levels seen over the last few months. Prices for the month averaged $7.72/GJ – an 11% decrease compared to November. Average prices are now 47% lower than they were at the same time last year.

On the supply side Maui production stayed at the levels observed at the end of November – 55TJ/day. Pohokura maintained output, averaging around 30TJ/day. Kupe also held its output at around 42TJ/day until a scheduled outage from the 13th Dec on. McKee / Mangahewa decreased its production slightly averaging 61TJ/day. (Note that data was only available to the 17th Dec.) It was reported in late Dec that gas sales commenced from the Tariki well in Taranaki. It is expected to produce at least 10TJ per day and could contain 13.8PJ of gas.
The following graph shows production levels from major fields over the last 6 years.

Through much of December Methanex continued to use close to 100TJ/day. Huntly usage increased at the start of the month before falling away averaging 15TJ/day, while TCC remained idle for the month. (Note that data was only available to the 17th Dec.) There is talk that Genesis has swapped some contracted gas with Methanex, “banking” some gas for next winter.
The following graph shows trends in the major gas users over the last 6 years.

Gas storage is becoming increasingly important as falling production coincides with more variable demand, particularly from gas-fired electricity generation. The following chart shows how storage at Ahuroa has increased over the last few months. It is now at the highest level it has been at this time of year over the last few years.

Internationally, LNG netback prices ended the month at $19.79/GJ – up 11% from last month. Forecast prices for 2025 were up 5.5% at $20.42/GJ. Forward prices for 2026 were published for the first time this month – currently expected to average $17.5/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)

New Zealand does not (yet) have an LNG export/import market, so our domestic prices are not directly linked to global prices. With recent gas supply issues, the Government is now talking about the possibility of facilitating the building of an LNG import facility.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 4 years as well as forecast pricing for the year ahead. Futures pricing increased over the last month.

The other main contributing factor to LPG prices in New Zealand is the exchange rate against the USD. The exchange rate fell through the month ending at 0.56. This would tend to push up LPG prices when quoted in NZD.

The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in December fell, ending the month at US$125/T – a 9% decrease on the November close. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.

Like gas, the price of coal can flow through and have an impact on the electricity market. In October Genesis reported that it planned to import at least 270,000 tonnes of coal by March to help secure electricity supplies going into next winter. It had previously aimed to stockpile 350,000 tonnes, but now says it wants to hold about 500,000 tonnes to cover peak autumn and winter electricity demand in 2025. Genesis says that 500,000 tonnes is the equivalent of about 1,000GWh of electricity storage or 22% of maximum hydro storage in NZ.
Carbon Pricing
NZ has had an Emissions Trading Scheme (ETS) in place since 2008. It has been subsequently reviewed by several governments and is now an “uncapped” price scheme closely linked to international schemes. However, there are “upper and lower guard-rails” set up to prevent wild swings in carbon price that act as minimum and maximum prices. These increased in December 2023 to $173 and $64 respectively. Carbon prices decreased 3% in December to $62.

As the carbon price rises, the cost of coal, gas or other fossil fuels used in process heat applications will naturally also rise. Electricity prices are also affected by a rising carbon price. Electricity prices are set by the marginal producing unit – in NZ this is currently typically coal or gas or hydro generators, with the latter valuing the cost of its water against the former. An increase in carbon price can lead to an increase in electricity prices in the short to medium term (as the marginal units set the price). A carbon price of $50/t is estimated to currently add about $25/MWh (or ~2.5c/kWh) to electricity prices. In the long term the impact should reduce as money is invested in more low-cost renewables and there is less reliance on gas and coal fired generation.
EU Carbon Permits increased in December to 73 Euro/tonne – up 7%.
About this Report:
This energy market summary report provides information on wholesale price trends within the NZ Electricity Market.
Please note that all electricity prices are presented as a $ per MWh price and all carbon prices as a $ per unit price.
All spot prices are published by the Electricity Authority. Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- Transpower publishes a range of detailed information which can be found here: https://www.transpower.co.nz/power-system-live-data
- The Electricity Authority publishes a range of detailed information which can be found here: https://www.emi.ea.govt.nz/
- Weather and Climate data – The MetService publishes a range of weather-related information which can be found here: https://www.metservice.com/
Disclaimer: This document has been prepared for information and explanatory purposes only and is not intended to be relied upon by any person. This document does not form part of any existing or future contract or agreement between us. We make no representation, assurance, or guarantee as to the accuracy of the information provided. To the maximum extent permitted by law, none of Smart Power Ltd, its related companies, directors, employees or agents accepts any liability for any loss arising from the use of this document or its contents or otherwise arising out or, or in connection with it. You must not provide this document or any information contained in it to any third party without our prior consent.
About Smart Power:
Smart Power is a full-service Energy Management consultancy. Apart from Energy Procurement, Smart Power can also provide:
- Technical advice on how to reduce your energy use & emissions
- Sustainability Reporting
- Invoice Management Services
We also offer boutique energy and water billing services for landlords/property developers.
Contact us here or call one of our offices to talk to our experienced staff about how we can assist you with achieving your energy goals.
© Copyright, 2024. Smart Power Ltd
Market Update November 2024
The Wholesale Electricity Market
Spot prices in the wholesale electricity market for November fell even further from the low levels seen the last two months. Average spot prices for the month ranged from $24 in the lower South Island (down from $50 in October), up to $35 in the upper North Island (down from $60).

The following chart shows average weekly spot prices over the last 2 years. The extreme highs and lows over the last few months can be clearly seen.

Electricity Demand
Electricity demand in November continued the recent low trend at the start of the month but increased later to be close to average in recent years later in the month.

Electricity Generation Mix
Through November, increased hydro generation for much of the month meant that thermal generation backed off even further to be close to minimal levels for most of the month.

HVDC Transfer
Power transfers on the HVDC link connecting the North and South Islands are important both in showing relative hydro positions and the reliance on thermal power to meet demand. High northward flow tends to indicate a good SI hydro position, whereas the reverse indicates a heavy reliance on thermal power to make up for hydro shortages.
With high South Island hydro storage levels, November saw continued strong northward transfers and very little southward transfer.

The Electricity Futures Market
The Futures Market provides an indication of where market participants see the spot market moving in the future. They are based on actual trades between participants looking to hedge their positions (as both buyers and sellers) into the future against potential spot market volatility. They are also a useful proxy for the direction of retail contracts.
The following graph shows Futures pricing for CY 2025, 2026, 2027 and 2028 at Otahuhu (Auckland) for the last 2 years.

Note that $100/MWh equates to 10c/kWh.
Forward prices fell again for 2025 but increased in all other years. CAL 2025 ended the month at $167.5 – down a further 9% from last month. CY 2026 price was up 2% at $181.5 while CY 2027 also closed up 2% at $174/MWh. CY 2028 finished the month up 3% at $173/MWh.
Known new generation projects are shown below (additions / removals / changes highlighted in bold).

Hydro Storage
Inflows in the South Island were again well above average in November. The North Island had a lower than average inflows for the month.

These continuing high inflows resulted in energy storage levels climbing throughout November reaching 3,891GWh (88% full) at the end of the month – an increase of 480GWh over the month. Storage is now well above the average level seen at this time of year. The following chart shows the latest breakdown of storage across the main hydro catchments.

Security of supply risks decreased further through November with storage levels increasing as shown below.

Snowpack
Snowpack is an important way that hydro energy is stored over the winter months and released as hydro inflows in the spring. The following graph shows that the snowpack in the important Waitaki catchment decreased through November, however remains close to the mean levels seen in the last 30 years for this time of year.

Climate outlook overview (from the MetService)
Climate drivers — An active Southern Ocean brought strongly negative (active) Southern Annular Mode (SAM) last month, driving frequent frontal passages across West Coast, Fiordland and Southland, and this uptick is likely to persist into the first week of December.
A passage of Madden-Julian Oscillation (MJO) is possible across the Southwest Pacific around mid-December, with an increased risk for tropical or subtropical cyclones north of the country. These bring the potential for significant rainfall events across the North Island if they spread southwards towards New Zealand, and with the tropical cyclone season now in effect, this will be an event to watch.
El Nino Southern Oscillation (ENSO) remains neutral, and while there is about a 1-in-3 chance for a short-lived and weak event to develop later this month into early 2025, this risk has been steadily decreasing. However, a negative Indian Ocean Dipole (IOD) event persists through much of December, which in itself can mimic La Nina conditions and heighten the risk for any northerly low to affect northern New Zealand. While the signals are not fully in alignment for development north of the country, the risk is picked to increase from about mid-month
December 2024 Outlook — Summer begins on a warm note for eastern regions across the country, with cities from Gisborne down to Oamaru expected to reach into the upper 20s to low 30s over the next few days as gusty northwesterly winds spread northwards. A few rainy days from Westland to Southland, tipping rainfall above average there, while the rest of New Zealand trends much drier under prevailing high pressure. Another weather system brings a short burst of rain across southern parts of the country to end the week.
Next week sees an unsettled start with cooler temperatures over parts of the South Island, but conditions improve markedly by mid-week as another ridge slides across New Zealand. An overall dry week again for central and northern parts of the country, trending wetter about the West Coast. A windy westerly flow is likely to accompany these weather systems which could again push temperatures near or above 30C in downwind regions. It will become important to watch for any low development north of the country later in the week with the MJO passage, and any system that develops and approaches the country could bring a risk of boom-or-bust rain event into week three, along with warmer and more humid weather.
The third week of December sees the trend for a wetter west coast of the South Island persist, while high pressure moves east of the country. This may allow a progression of fronts to cross over the country with near-average rainfall elsewhere. Temperatures are likely to trend slightly warmer than average, but a northerly low could tip the scale much warmer.
The final week of the year brings little change to the weather pattern, with hints of more settled weather possible as we head into the new year. While weather models continue picking overall dry conditions across eastern South Island and most of the North Island, the start of the tropical cyclone season means conditions north of New Zealand will become increasingly favourable for low development, and it takes only one northerly low to bring a notable rain event and push totals towards the wetter end of the scale.

The Wholesale Gas Market
Spot gas prices in November continued at the very low levels seen over the last couple of months. Prices for the month averaged $8.65/GJ – a 5% increase compared to October. Average prices are now 36% lower than they were at the same time last year.

On the supply side Maui production fell through the month from 65TJ/day at the start of the month down to 55TJ/day by the end of the month. Pohokura maintained output, averaging around 30TJ/day. Kupe also held its output at around 42TJ/day. McKee / Mangahewa decreased its production slightly averaging 64TJ/day.
The following graph shows production levels from major fields over the last 6 years.

After nearly 2.5 months shutdown Methanex Motunui came back, as planned, at the very end of October. Through much of November Methanex used close to 100TJ/day. Huntly usage fell away through the month averaging 13TJ/day, while TCC remained idle for the month. There is talk that Genesis has swopped some contracted gas with Methanex, “banking” some gas for next winter.
The following graph shows trends in the major gas users over the last 6 years.

Gas storage is becoming increasingly important as falling production coincides with more variable demand particularly from gas fired electricity generation. The following chart shows how storage at Ahuroa has increased over the last few months. It is now at the highest level it has been at this time of year over the last few years.

Internationally, LNG netback prices ended the month at $17.86/GJ – up 8% from last month. Forecast average price for 2024 was flat at $15.09. Forecast prices for 2025 were up 11% at $19.35/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)

New Zealand does not (yet) have an LNG export/import market, so our domestic prices are not directly linked to global prices. With recent gas supply issues, the Government is now talking about the possibility of facilitating the building of an LNG import facility.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 3.5 years as well as forecast pricing for the year ahead. Futures pricing was flat over the last month.

The other main contributing factor to LPG prices in New Zealand is the exchange rate against the USD. The exchange rate fell through the month ending at 0.58. This would tend to push up LPG prices when quoted in NZD.

The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in November fell, ending the month at US$138/T – a 3% decrease on the October close. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.

Like gas, the price of coal can flow through and have an impact on the electricity market. In October Genesis reported that it planned to import at least 270,000 tonnes of coal by March to help secure electricity supplies going into next winter. It had previously aimed to stockpile 350,000 tonnes, but now says it wants to hold about 500,000 tonnes to cover peak autumn and winter electricity demand in 2025. Genesis says that 500,000 tonnes is the equivalent of about 1,000GWh of electricity storage or 22% of maximum hydro storage in NZ.
Carbon Pricing
NZ has had an Emissions Trading Scheme (ETS) in place since 2008. It has been subsequently reviewed by several governments and is now an “uncapped” price scheme closely linked to international schemes. However, there are “upper and lower guard-rails” set up to prevent wild swings in carbon price that act as minimum and maximum prices. These increased in December 2023 to $173 and $64 respectively. Carbon prices increased 1% in November to $64.

As the carbon price rises, the cost of coal, gas or other fossil fuels used in process heat applications will naturally also rise. Electricity prices are also affected by a rising carbon price. Electricity prices are set by the marginal producing unit – in NZ this is currently typically coal or gas or hydro generators, with the latter valuing the cost of its water against the former. An increase in carbon price can lead to an increase in electricity prices in the short to medium term (as the marginal units set the price). A carbon price of $50/t is estimated to currently add about $25/MWh (or ~2.5c/kWh) to electricity prices. In the long term the impact should reduce as money is invested in more low-cost renewables and there is less reliance on gas and coal fired generation.
EU Carbon Permits increased in November to 68.4 Euro/tonne – up 2%.
About this Report:
This energy market summary report provides information on wholesale price trends within the NZ Electricity Market.
Please note that all electricity prices are presented as a $ per MWh price and all carbon prices as a $ per unit price.
All spot prices are published by the Electricity Authority. Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- Transpower publishes a range of detailed information which can be found here: https://www.transpower.co.nz/power-system-live-data
- The Electricity Authority publishes a range of detailed information which can be found here: https://www.emi.ea.govt.nz/
- Weather and Climate data – The MetService publishes a range of weather-related information which can be found here: https://www.metservice.com/
Disclaimer: This document has been prepared for information and explanatory purposes only and is not intended to be relied upon by any person. This document does not form part of any existing or future contract or agreement between us. We make no representation, assurance, or guarantee as to the accuracy of the information provided. To the maximum extent permitted by law, none of Smart Power Ltd, its related companies, directors, employees or agents accepts any liability for any loss arising from the use of this document or its contents or otherwise arising out or, or in connection with it. You must not provide this document or any information contained in it to any third party without our prior consent.
About Smart Power:
Smart Power is a full-service Energy Management consultancy. Apart from Energy Procurement, Smart Power can also provide:
- Technical advice on how to reduce your energy use & emissions
- Sustainability Reporting
- Invoice Management Services
We also offer boutique energy and water billing services for landlords/property developers.
Contact us here or call one of our offices to talk to our experienced staff about how we can assist you with achieving your energy goals.
© Copyright, 2024. Smart Power Ltd
Market Update October 2024
The Wholesale Electricity Market
Spot prices in the wholesale electricity market for October continued at the much lower levels seen last month. Average spot prices for the month ranged from $50 in the lower South Island (down from $69 in September), up to $60 in the upper North Island (down from $80).

The following chart shows average weekly spot prices over the last 2 years. The extreme highs and lows over the last few months can be clearly seen.

Electricity Demand
Electricity demand through October was low compared to the last few years with mild spring weather in most parts of the country.

Electricity Generation Mix
Through October, increased hydro generation meant that thermal generation could largely remain backed off.

HVDC Transfer
Power transfers on the HVDC link connecting the North and South Islands are important both in showing relative hydro positions and the reliance on thermal power to meet demand. High northward flow tends to indicate a good SI hydro position, whereas the reverse indicates a heavy reliance on thermal power to make up for hydro shortages.
With plenty of uncontrolled inflows and increasing hydro storage levels, October saw continued strong northward transfers and very little southward transfer.

The Electricity Futures Market
The Futures Market provides an indication of where market participants see the spot market moving in the future. They are based on actual trades between participants looking to hedge their positions (as both buyers and sellers) into the future against potential spot market volatility. They are also a useful proxy for the direction of retail contracts.
The following graph shows Futures pricing for CY 2025, 2026, 2027 and 2028 at Otahuhu (Auckland) for the last 2 years.

Note that $100/MWh equates to 10c/kWh.
Forward prices fell steeply for 2025 but increased in all other years. CAL 2025 ended the month at $184.5 – down 16%. CY 2026 price was up 6% at $178 while CY 2027 closed up 4% at $170/MWh. CY 2028 recently started being traded and is currently at $167.5/MWh.
In late October Contact hinted that TCC may remain operating through next year to support NZ’s security of supply, though it is reliant on “materially more gas being available than is currently contracted”. TCC was due to be decommissioned at the end of this year.
Known new generation projects are shown below (additions / removals / changes highlighted in bold).

Hydro Storage
Inflows in the South Island were again well above average in October. The North Island had a little more than average inflows for the month.

These continuing high inflows resulted in energy storage levels climbing throughout October reaching 3,411GWh (77% full) at the end of the month – an increase of 529GWh over the month. Storage is now well above the average level seen at this time of year. The following chart shows the latest breakdown of storage across the main hydro catchments.

Security of supply risks decreased throughout October with storage levels increasing and Transpower making a downward adjustment in the risk curves for 2025 as shown below. This was potentially due, at least in part, to the news about TCC being available for longer.

Snowpack
Snowpack is an important way that hydro energy is stored over the winter months and released as hydro inflows in the spring. The following graph shows that the snowpack in the important Waitaki catchment decreased through most of October, however remains close to the 75th percentile levels seen in the last 30 years for this time of year.

Climate outlook overview (from the MetService)
Climate drivers — New Zealand weather during most of November will be dictated by the usual short-term climate drivers, with the Southern Annular Mode (SAM) coming out of a prolonged negative (active) phase while the Tasman Sea Index (TSI) remains largely positive. This suggests that most fronts originating from the Southern Ocean should weaken as they spread further north, and more frequent high pressure systems are likely.
El Niño Southern Oscillation (ENSO) remains neutral, and while a weak La Niña may still develop over the summer, this risk has decreased slightly. However, there is now higher confidence that a negative Indian Ocean Dipole (IOD) event develops this month, which favours a more active north Tasman Sea and in turn more frequent northerly rain events for New Zealand. This is more likely towards the end of November into the start of summer, when another pulse of Madden-Julian Oscillation (MJO) moves into the Southwest Pacific.
Both the negative IOD event and MJO passage later in the month could enhance the risk for moisture-laden air masses to spread northerly rain across the top half of New Zealand. In addition, the tropical cyclone season has now begun, so any system developing north of the country may have the conditions necessary for tropical or subtropical weather systems to develop. Any northerly low in this weather setup has the potential for bringing a ‘boom-or-bust’ rain event to the country, particularly the North Island, so keep an eye to the north.
November 2024 Outlook — The start of November sees a few fronts moving onto the lower South Island while high pressure nestles over the North Island, and a short cold snap with morning frosts is possible across southern regions after frontal passages over the weekend. A warmer northerly flow then brings above normal temperatures to most of the country for the remainder of the week, with a drier weather pattern across central and northern New Zealand, while southern regions experience a slightly wetter week.
The second week of the month trends closer to average for rainfall across the board, with passing fronts followed by mobile ridges of high pressure. Temperatures become more volatile during this period, with short bouts of morning frosts intermixed with warming ridges, and the weekends cooler than average.
A solid high-pressure anomaly moves over the country from about mid-month, with many regions experiencing extended spells of fine weather. The strongest dry signal lies across the southern South Island, which also coincides with the warmest temperature pattern.
High pressure weakens and spreads eastwards towards the end of November and corresponds with a potentially more active Southwest Pacific and North Tasman Sea. While weather models are picking generally dry conditions to persist, it will become important to keep your eyes to any system approaching from the north, which have the potential to bring a ‘boom or bust’ event. It only takes one northerly rainmaker to skew rainfall totals wetter, and we can’t forget that tropical cyclone season has just begun.

The Wholesale Gas Market
Spot gas prices in October continued at the very low levels seen in September. Prices for the month averaged $8.26/GJ – a 7% decrease compared to September. Average prices are now 22% lower than they were at the same time last year.

On the supply side Maui production fell through the month from 70TJ/day down to close to 60TJ/day at the end of the month. Pohokura also dropped output, averaging around 29TJ/day. Kupe decreased output from around 45TJ/day down to 40TJ/day at the end of the month. Bucking the trend, McKee / Mangahewa increased its production slightly at 66TJ/day.
The following graph shows production levels from major fields over the last 6 years.

After nearly 2.5 months shutdown Methanex Motunui came back, as planned, at the very end of October. On the 31st October it used 51TJ of gas – the same level it was using just before being shut down. Huntly usage was down over the month at close to 55TJ/day, while TCC remained idle for the month.
The following graph shows trends in the major gas users over the last 6 years.

Gas storage is becoming increasingly important as falling production coincides with more variable demand, particularly from gas fired electricity generation. The following chart shows how storage at Ahuroa fell over the last 18 months, but more recently increased with Methanex shut down and increased hydro inflows limiting the need for thermal generation.

Internationally, LNG netback prices ended the month at $16.49/GJ – down 5% from last month. Forecast prices for 2024 were flat at $15.08. Forecast prices for 2025 were up 4% at $17.42/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)

New Zealand does not (yet) have an LNG export/import market, so our domestic prices are not directly linked to global prices. With recent gas supply issues, the Government is now talking about the possibility of facilitating the building of an LNG import facility.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 3.5 years as well as forecast pricing for the year ahead. There has been a decrease in futures pricing over the last month.

The other main contributing factor to LPG prices in New Zealand is the exchange rate against the USD. The exchange rate fell through the month ending just below 0.6. This would tend to push up LPG prices when quoted in NZD.

The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in October were largely flat, ending the month at US$142/T – a 2% decrease on the September close. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.

Like gas, the price of coal can flow through and have an impact on the electricity market. In October Genesis reported that it planned to import at least 270,000 tonnes of coal by March to help secure electricity supplies going into next winter. It had previously aimed to stockpile 350,000 tonnes, but now says it wants to hold about 500,000 tonnes to cover peak autumn and winter electricity demand in 2025. Genesis says that 500,000 tonnes is the equivalent of about 1,000GWh of electricity storage or 22% of maximum hydro storage in NZ.
Carbon Pricing
NZ has had an Emissions Trading Scheme (ETS) in place since 2008. It has been subsequently reviewed by several governments and is now an “uncapped” price scheme closely linked to international schemes. However, there are “upper and lower guard-rails” set up to prevent wild swings in carbon price that act as minimum and maximum prices. These increased in December 2023 to $173 and $64 respectively. Carbon prices increased 2% in October to $63.4.

As the carbon price rises, the cost of coal, gas or other fossil fuels used in process heat applications will naturally also rise. Electricity prices are also affected by a rising carbon price. Electricity prices are set by the marginal producing unit – in NZ this is currently typically coal or gas or hydro generators, with the latter valuing the cost of its water against the former. An increase in carbon price can lead to an increase in electricity prices in the short to medium term (as the marginal units set the price). A carbon price of $50/t is estimated to currently add about $25/MWh (or ~2.5c/kWh) to electricity prices. In the long term the impact should reduce as money is invested in more low-cost renewables and there is less reliance on gas and coal fired generation.
EU Carbon Permits increased in October to 67 Euro/tonne – up 2%.
About this Report:
This energy market summary report provides information on wholesale price trends within the NZ Electricity Market.
Please note that all electricity prices are presented as a $ per MWh price and all carbon prices as a $ per unit price.
All spot prices are published by the Electricity Authority. Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- Transpower publishes a range of detailed information which can be found here: https://www.transpower.co.nz/power-system-live-data
- The Electricity Authority publishes a range of detailed information which can be found here: https://www.emi.ea.govt.nz/
- Weather and Climate data – The MetService publishes a range of weather-related information which can be found here: https://www.metservice.com/
Disclaimer: This document has been prepared for information and explanatory purposes only and is not intended to be relied upon by any person. This document does not form part of any existing or future contract or agreement between us. We make no representation, assurance, or guarantee as to the accuracy of the information provided. To the maximum extent permitted by law, none of Smart Power Ltd, its related companies, directors, employees or agents accepts any liability for any loss arising from the use of this document or its contents or otherwise arising out or, or in connection with it. You must not provide this document or any information contained in it to any third party without our prior consent.
About Smart Power:
Smart Power is a full-service Energy Management consultancy. Apart from Energy Procurement, Smart Power can also provide:
- Technical advice on how to reduce your energy use & emissions
- Sustainability Reporting
- Invoice Management Services
We also offer boutique energy and water billing services for landlords/property developers.
Contact us here or call one of our offices to talk to our experienced staff about how we can assist you with achieving your energy goals.
© Copyright, 2024. Smart Power Ltd
Market Update September 2024
The Wholesale Electricity Market
After record highs through August, spot prices in the wholesale electricity market for September continued at the much lower levels seen at the end of last month. Average spot prices for the month ranged from $69 in the lower South Island (down from $488 in August), up to $80 in the upper North Island (down from $457).

The following chart shows average weekly spot prices over the last 2 years. The extreme highs and lows over the last two months can be clearly seen.

Electricity Demand
Electricity demand through September was low compared to the last few years with mild early spring weather in most parts of the country.

Electricity Generation Mix
Through September, reduced demand and increased wind generation, along with increased hydro generation meant that thermal generation could back off.

HVDC Transfer
Power transfers on the HVDC link connecting the North and South Islands are important both in showing relative hydro positions and the reliance on thermal power to meet demand. High northward flow tends to indicate a good SI hydro position, whereas the reverse indicates a heavy reliance on thermal power to make up for hydro shortages.
With plenty of uncontrolled inflows and increasing hydro storage levels, September saw more “normal” northward transfers return and very little southward transfer for the month.

The Electricity Futures Market
The Futures Market provides an indication of where market participants see the spot market moving in the future. They are based on actual trades between participants looking to hedge their positions (as both buyers and sellers) into the future against potential spot market volatility. They are also a useful proxy for the direction of retail contracts.
The following graph shows Futures pricing for CY 2024, 2025, 2026 and 2027 at Otahuhu (Auckland) for the last 2 years.

Note that $100/MWh equates to 10c/kWh.
Forward prices climbed at the start of September particularly for CAL 2025, which peaked at $250/MWh before falling. CAL 2025 ended the month at $219 – down 6%. CY 2026 price was down 2% at $168 while CY 2027 closed up 1% at $164/MWh.
Known new generation projects are shown below (additions / removals / changes highlighted in bold).

Hydro Storage
Inflows in the South Island approached record levels in many hydro catchments. Te Anau / Manapouri went from minimum levels to close to the highest levels seen, at this time of year, in a matter of days. The lower Waiau river which takes over-flow or spill from Manapouri was consistently flowing more than 600cumecs (and as high as 800cumecs) for much of September. Putting this in perspective the Waikato river at the Huka Falls typically flows between 50 – 250cumecs.
The North Island was comparatively tame with a little more than average inflows for the month.

These very high inflows resulted in energy storage levels climbing throughout September reaching 2,882 (65% full) at the end of the month – an increase of 968GWh over the month. Storage is now back above the average level seen at this time of year. The following chart shows the latest breakdown of storage across the main hydro catchments.

Security of supply risks decreased throughout September with storage levels increasing. This is shown in the following risk curves.

Snowpack
Snowpack is an important way that hydro energy is stored over the winter months and released as hydro inflows in the spring. The following graph shows that the snowpack in the important Waitaki catchment increased through September with some good dumps of snow and is now above the 75th percentile levels seen in the last 30 years for this time of year.

Climate outlook overview (from the MetService)
Climate drivers — El Niño Southern Oscillation (ENSO) remains in neutral territory. Longer-range climate models continue to pick a near-even chance of either remaining neutral, or a weak La Niña developing over the next few months. In either case, any weather impacts from ENSO are not expected before summer.
The Southern Annular Mode (SAM) was strongly negative last month, resulting in frequent fronts and lows passing over the South Island. This should remain negative over the next week with further weather systems in the south, but is likely to trend neutral or even positive from the middle of October as high pressure builds across the Far South and Southern Ocean, with less frequent rain-makers for the South Island. A pulse of Madden-Julian Oscillation (MJO) is picked to move into the Southwest Pacific mid-late month, and this could enhance the risk for moisture-laden air masses to spread northerly rain across the top half of New Zealand.
October 2024 Outlook — A slow-moving low affects New Zealand through the first week of October, bringing heavy rain and thunderstorms across much of the country, and a risk for late season snow about the Otago high country farms. Another low brings a second burst of rainfall and strong westerly winds to much of the country over the weekend and into early next week. This brings warming temperatures across the North Island, but a possible cold snap in the south with frosts becoming likely from the middle of next week.
This pattern shifts around mid-October. While models famously struggle during the Southern Hemisphere spring (called the springtime predictability barrier), all indications are for more frequent and stronger high pressure systems spreading across the Southern Ocean and over the South Island. This will help push any low pressure systems further north over the Tasman Sea and North Island, and the South Island is likely to see the majority of its October rainfall during the first 1-2 weeks of the month as activity moves northwards, with a temporary reprieve from wetter conditions. However, the risk for morning frosts increases during the final two weeks of October across the South Island, with temperatures falling near or slightly below normal.
It’s a different story for the North Island, where the risk for heavy northerly rainfall events increases during the back half of the month. Passing high pressure systems are still expected, but Tasman lows become more likely during this time, and the MJO passage may enhance the moisture content of any approaching lows. Northern regions from Northland and Auckland, to Bay of Plenty and Gisborne have a greater chance of seeing these heavy rainfall events, but it’s important to remember these may be boom-or-bust events.
Springtime is a period of highly changeable weather across New Zealand, so we can expect this volatile weather pattern to continue into next month.

The Wholesale Gas Market
Spot gas prices in September continued at the very low levels seen at the very end of August. Prices for the month averaged $8.8/GJ – a 77% decrease compared to August. Average prices are now 17% lower than they were at the same time last year.

On the supply side Maui produced 70TJ/day – down 11%. Pohokura dropped output significantly at around 33TJ/day – down 35%. McKee / Mangahewa increased its production, up 25% at 64TJ/day. Kupe maintained around 45TJ/day apart from a short outage in the middle of the month.
The following graph shows production levels from major fields over the last 6 years.

As noted last month Methanex did a deal with the large electricity generators to shut down its Motunui site in the middle of August through to the end of October. Gas usage was zero for the whole of September. Huntly usage was constant at close to the 60TJ/day observed at the end of last month, while TCC was shut down for all the month.
The following graph shows trends in the major gas users over the last 6 years.

Internationally, LNG netback prices ended the month up at $17.34/GJ – up 6.5% from last month. Forecast prices for 2024 increased to $15.04 – down 2% compared to July. Forecast prices for 2025 were down 6.5% at $16.81/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)

New Zealand does not (yet) have an LNG export/import market, so our domestic prices are not directly linked to global prices. With recent gas supply issues, the Government is now talking about the possibility of facilitating the building of an LNG import facility.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 3 years as well as forecast pricing for the year ahead. There has been an increase in futures pricing over the last month.

The other main contributing factor to LPG prices in New Zealand is the exchange rate against the USD. While volatile during the month the exchange rate ended the month at about the same level that it started it.

The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in September were largely flat, ending the month at US$145/T – a 1% increase on the August close. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.

Like gas, the price of coal can flow through and have an impact on the electricity market. In August Genesis reported that it had imported additional coal. Stockpiles had reduced to 231,000 tonnes at the end of June – down from 624,000 tonnes at the end of March. Genesis says that it usually aims to hold about 350,000 tonnes of coal.
Carbon Pricing
NZ has had an Emissions Trading Scheme (ETS) in place since 2008. It has been subsequently reviewed by several governments and is now an “uncapped” price scheme closely linked to international schemes. However, there are “upper and lower guard rails” set up to prevent wild swings in carbon price that act as minimum and maximum prices. These increased in December 2023 to $173 and $64 respectively. Carbon prices increased 1% in September to $62.2.

As the carbon price rises, the cost of coal, gas or other fossil fuels used in process heat applications will naturally also rise. Electricity prices are also affected by a rising carbon price. Electricity prices are set by the marginal producing unit – in NZ this is currently typically coal or gas or hydro generators, with the latter valuing the cost of its water against the former. An increase in carbon price can lead to an increase in electricity prices in the short to medium term (as the marginal units set the price). A carbon price of $50/t is estimated to currently add about $25/MWh (or ~2.5c/kWh) to electricity prices. In the long term the impact should reduce as money is invested in more low-cost renewables and there is less reliance on gas and coal fired generation.
EU Carbon Permits decreased in September to 65.5 Euro/tonne – down 7%.
About this Report:
This energy market summary report provides information on wholesale price trends within the NZ Electricity Market.
Please note that all electricity prices are presented as a $ per MWh price and all carbon prices as a $ per unit price.
All spot prices are published by the Electricity Authority. Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- Transpower publishes a range of detailed information which can be found here: https://www.transpower.co.nz/power-system-live-data
- The Electricity Authority publishes a range of detailed information which can be found here: https://www.emi.ea.govt.nz/
- Weather and Climate data – The MetService publishes a range of weather-related information which can be found here: https://www.metservice.com/
Disclaimer: This document has been prepared for information and explanatory purposes only and is not intended to be relied upon by any person. This document does not form part of any existing or future contract or agreement between us. We make no representation, assurance, or guarantee as to the accuracy of the information provided. To the maximum extent permitted by law, none of Smart Power Ltd, its related companies, directors, employees or agents accepts any liability for any loss arising from the use of this document or its contents or otherwise arising out or, or in connection with it. You must not provide this document or any information contained in it to any third party without our prior consent.
About Smart Power:
Smart Power is a full-service Energy Management consultancy. Apart from Energy Procurement, Smart Power can also provide:
- Technical advice on how to reduce your energy use & emissions
- Sustainability Reporting
- Invoice Management Services
We also offer boutique energy and water billing services for landlords/property developers.
Contact us here or call one of our offices to talk to our experienced staff about how we can assist you with achieving your energy goals.
© Copyright, 2024. Smart Power Ltd