Highlights

• Heating resource constraints on Waikato River caused very high daily prices at the beginning of the month, half hour prices spiked to over 100.0 c/kWh.
• Nationally February 2005 was the eighth warmest on record with Auckland Airport mean temperature reaching 20.8°C (0.8°C above monthly average).
• The National Hydro storage situation is five percent above seasonal average

Price Changes

At the three main reference nodes monthly average prices on the NZ Electricity Market were:

The South Island inflows were below seasonal average during the month (94% of normal) leaving South Island storage at 101% of normal while North Island storage was at 139% of historical average at month end.

The two charts below show that prices through February were pushed higher as warm weather increased the temperature of the Waikato River. The increase in river temperature caused Huntly to reduce production due to river heating restrictions. Huntly uses the Waikato River water for cooling when it generates and must keep the water temperature at the outflow below certain levels. 74% of prices were higher than 7.0 c/kWh and 15% higher than 10.0 c/kWh.

The chart below shows that most high prices occurred in the late afternoon, a direct effect of the river heating constraint periods.

The rolling one year price has been pulled sharply higher by the high February prices and now stands at 4.09 c/kWh, up 0.53 c/kWh.

With the combination of hydro conservation prior to the winter months and expected outages, there should be limited upward or downward pressure on price in March.

Disclaimer: Every effort has been made to ensure the accuracy of the above information, but no liability is accepted for any error or omission.