Power prices more than double as demand rises

MELBOURNE - New Zealand wholesale power prices more than doubled over the past week as demand continued to climb back to pre-Christmas levels while North Island prices also rose because of an outage on the main power link.

"The HVDC was out for five trading periods on Sunday and North Island prices in every region during one of those periods rose above $500," an analyst said on Wednesday.

The 1040 megawatt (MW)-capacity High Voltage Direct Current (HVDC) transports electricity from the South Island to the North Island. The link's capacity has been reduced to 886-MW until maintenance is finished in March.

Over the past week to Tuesday, the average price at the North Island reference point of Haywards rose to $38.63 per megawatt hour (MWh) from $16.27.

In the same period, the average price at the South Island reference point of Benmore rose to $32.71 per MWh from $14.97.

Demand rose to 3.3 per cent to 94,618 MWh, edging closer to pre-Christmas levels of around 100,000 MWh.

Prices strengthened despite above average inflows and stored energy levels.

Around two-thirds of New Zealand's electricity is generated by hydroelectric power stations mostly located in the South Island.

On Tuesday, New Zealand's inflows were at 121 per cent of average while stored energy was 112 per cent of average, according to market operator M-co.

Over the past seven days, inflows were strongest at the South Island catchment of Waiau which were 153 per cent of average.

Analysts said the country's big thermal generators were increasing output in line with higher demand.

The 1000-MW capacity Huntly power station, owned by state company Genesis Power, was generating as much as 600 MW, while the Contact Energy-owned Taranaki Combined Cycle (TCC) generator was offering as much as 320 MW.

Genesis owns 19 per cent of New Zealand's generation capacity while Contact owns 23 per cent.

Contact's gas-fired, 385-MW Otahuhu B power station resumed output on Sunday after a more than three-week planned outage.

- REUTERS