Highlights

• National lake storage levels remain below seasonal average.
• The national average temperature for July was 9.1 °C – the third highest for July since reliable records began (1.2 °C above seasonal average).
• Spot prices remained firm in July due to the ongoing reliance on thermal plant operation to make up for the conservative hydro generation.

Spot Market Prices

Despite the continuing upward pressure on prices – a result of the conservative hydro generation approach to the current national storage situation – prices did actually ease slightly in July. The above average seasonal temperatures have seen lower than expected electricity demand. Forecast for electricity demand is expected to increase at approx 2% per annum however demand in July 05 was actually 1% lower than the demand experienced in July 04.

Prices in July traded within a very tight range with 99% of prices above 6.00 c/kWh and 92% between 6.00 c/kWh and 9.00 c/kWh.

Average Daily Prices

Hydrology

National Storage

South Island hydro inflows in July were above seasonal average at 107% however the storage situation has remained fairly unchanged at 83% of historical average for this time of year.

North Island storage fell slightly and is now at 85% of historical average.

Outlook

Prices in August are expected to remain firm as hydro generators continue to manage hydro storage levels in line with a continuation of recent inflow patterns and storage levels.