The Wholesale Electricity Market
Spot prices in the wholesale electricity market decreased in April. Average spot prices for the month ranged from $96.5 in the central North Island (down from $146 in March), up to $107 in the upper South Island ($157 in March).
The following chart shows average weekly spot prices over the last 2 years. The extreme low prices last summer can be clearly seen, as well as the recent variability in prices.
Electricity Demand
Demand in April bounced around with the weather – low early in the month, then higher than it has been in recent years later in April as shown below.
Electricity Generation Mix
Hydro generation picked up towards the end of April as we had some higher inflows and demand increased. This allowed thermal generation to back off slightly.
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.
Southward transfer initially picked up at the start of April until increased South Island inflows later in the month flipped the transfer to be largely northward.
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, 2028 and 2029 at Otahuhu (Auckland) for the last 5 years.
Note that $200/MWh equates to 20c/kWh.
Forward prices were down for all years through April. CAL 2027 dropped 10% ending the month at $139/MWh. CY 2028 was down 9.5% at $131. CY2029 was down 11.5% at $128.
Known new generation projects are shown below (additions / removals / changes highlighted in bold).
Hydro Storage
NI inflows were well above average especially the second half of April. SI inflows were close to or above average for most of the month, as shown below.
The generally higher inflows resulted in storage increasing through most of April. Energy storage levels increased 197GWh through the month to end at 3,786GWh (86% full). Storage is now 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 remained low in April with storage levels above the average levels 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 increased during April and is slightly above the average level seen in the last 30 years for this time of year.
Climate outlook overview September - November 2025 (from NIWA)
- Seasonal air temperatures for May – July 2026 are about equally likely to be near average or below average in the South Island and the west of the North Island, and near average in the north and east of the North Island. Occasional cold snaps are possible, especially under persistent high pressure where fog, frost, and cold nighttime temperatures could occur.
- Rainfall totals for May – July 2026 are about equally likely to be near normal or below normal for all regions of the country, except for the west of the South Island, where near normal or above normal rainfall totals for the season are equally likely. The risk of drier than normal conditions is expected to increase as the season progresses.
- During May – July 2026, soil moisture levels and river flows are expected to be near normal or below normal for the east and north of the South Island. Near normal soil moisture levels and river flows are most likely for the west of the North Island and the west of the South Island. In the east and north of the North Island, soil moisture levels are expected to be near normal or below normal, while river flows are most likely to be near normal.
- Southerly quarter air flow anomalies are expected at the beginning of the outlook period due to strong high-pressure systems approaching from the west. Air flow patterns are expected to tend towards a southwesterly flow anomaly, characteristic of El Niño conditions, towards the end of the three-month period.
- Neutral El Niño–Southern Oscillation (ENSO) conditions are currently present in the tropical Pacific; however, the coupled ocean–atmosphere system is showing signs of a rapid transition toward El Niño.
- Warm subsurface ocean temperature anomalies have continued to intensify and expand in the tropical Pacific, consistent with an ongoing transition toward El Niño and raising the potential for a significant event.
- There is about a 65% chance for El Niño conditions to emerge over the forecast period (May – July 2026)
- El Niño–related influences on regional weather patterns are expected to become more apparent as the season progresses and ENSO signals strengthen.
- Peak El Niño conditions are expected to occur during the austral summer of 2026–27, with the potential for this event to have significant impacts
The Wholesale Gas Market
Spot gas prices increased through April. Prices for the month averaged $16.3/GJ – a 30% increase compared to March. Average prices are 21% below what they were at the same time last year. Note that spot gas prices include the cost of carbon (currently around $2/GJ)
On the supply side most fields maintained output through April. McKee / Mangahewa’s output was variable but averaged 65TJ/day, close to last month’s average. Turangi and Kowhai maintained around 54TJ/day. Pohokura maintained output at 27TJ/day for most of the month before a 4-day shutdown at the end of the month. Maui decreased output to average 38TJ/day. Kupe also held output at 33.5TJ/day.
It was announced during April that Maui would cease production towards the end of this year, a year earlier than previously expected. The loss of close to 20% of NZ’s gas production is going to have a significant impact on supply, and it is likely that it will have an impact on the viability of large gas users.
The following graph shows production levels from major fields over the last 7 years.
On the demand side Huntly increased gas usage through the month averaging close to 50TJ/day. Methanex maintained usage at close to 60TJ/day. Balance restarted at the end of March, using close to 20TJ/day through April. At the start of May, Methanex entered a scheduled 2 month shutdown where it sold its gas supply to electricity generators.
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 maintained the same high level seen in March. It is close to the maximum levels seen at this time of year over the last few years.
Internationally, LNG netback prices have increased on the conflict in the middle east. Prices in April jumped another 20% to $23.12/GJ. However forecast prices were down 10% at $18.92/GJ for 2026 and 14% at $16.6 for 2027. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)
New Zealand does not (yet) have an LNG export/import market, so our domestic prices are not directly linked to global prices, though this may change with the Government announcing that an LNG import terminal will be built in the next few years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 5 years as well as forecast pricing for the year and a half ahead. The war in the middle east has resulted in a large increase in pricing over the past month.
The other main contributing factor to LPG prices in New Zealand is the exchange rate against the USD. The exchange rate was around 0.575 at the start of the month, rising consistently to end the month at 0.59. This remains below the average levels seen in recent years. The recent increases would tend to push down LPG prices when quoted in NZD.
The Coal Market
The conflict in the middle east has resulted in coal prices increasing along with other international energy commodities. To date the impact has not been as great as that observed during the initial years of the Ukraine war. Prices in April dropped slightly, ending the month at $134/tonne – down 4% 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.
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 again in April, up 30% at $54
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 units increased in April to 76.3 Euro/tonne. Australian Carbon Units also rose, up 3% at AUD$37.5
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/
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