Spot power prices fall as weather hits demand

Spot power prices fell over the past week due to downward pressure from warmer weather and reasonable inflows into South Island hydroelectricity catchments, analysts said today.

Prices at the North Island reference point of Haywards fell over five per cent, to an average NZ$76.03 per megawatt hour (MWh) and at the South Island reference point of Benmore over four per cent, to an average NZ$76.31.

"The weather has certainly been warmer and that has contributed to reduced demand and therefore reduced prices," an analyst said. "But that's not the end of winter prices, as last year we saw peak demand levels touched in August."

Inflows into the South Island, where all electricity is produced by hydro power stations, were only 96 per cent of average over the past week to Tuesday, well below a near four-month high of 112 per cent earlier this month.

Analysts said that while inflows were lower, they remained within a normal range and had actually been above average for the first three days of the week when prices were lowest.

The biggest inflows were recorded in the North Island's Taupo and Waikato catchments, while inflows into South Island catchments were all below average.

Demand fell 1.8 per cent to 111,025 gigawatt hours (GWh), also helping lower prices.

Market operator M-Co said New Zealand's stored energy rose one per cent over the past seven days to 84 per cent of normal levels.

Around 60 per cent of New Zealand's electricity is produced by hydro power stations.

- REUTERS