Power prices firmer despite better rain

SYDNEY - New Zealand spot power prices firmed over the past week despite more solid rainfall as generators tried to conserve water in depleted hydro-electricity catchments ahead of the winter months.

Prices at the North Island reference point of Haywards rose 1.9 per cent to an average $167.03 per megawatt hour (MWh) while at the South Island reference point of Benmore they rose 6.0 per cent, to an average $177.37 per MWh.

"We've had a much wetter few days and inflows have inched above average for the first time in weeks in some catchments," an analyst said on Wednesday.

"But I think what we're seeing is some conservation of that water because lake levels are still low and the picture doesn't look great for winter."

Traders said the greater price rise on the South Island reflected the fact that for most of the week gas-fired power had flowed southwards from the North Island. This was especially true at the start of the week before the heavier rainfall began.

Inflows into the South Island were 104 per cent of average over the past week to Tuesday, rising from 60 per cent last week.

But lake levels in the key Waitaki and Clutha catchments are still only 56 and 64 per cent of average respectively.

National demand fell 0.8 per cent to 101,840 gigawatt hours. Market operator M-Co said New Zealand's stored energy rose 5 percentage points over the past seven days to 71 per cent of normal levels.

- REUTERS