Highlights

• National storage levels remain below seasonal average.
• Demand was below historical average due to unseasonably warm weather.
• Spot prices moved slightly lower in August.

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 again in August. As per July, the above average seasonal temperatures in August have seen lower than expected electricity demand. Forecast electricity demand is expected to increase at approx 2% per annum however demand in August 05 was actually 3.7% lower than the demand experienced in August 04. The average national temperature over the winter was 9.1C, 0.7C warmer than normal and 0.1C shy of the most recent warmest winters on record in 1984 and 2000. Auckland was the warmest, wettest and sunniest of the main centres, and the city's average winter temperature of 11.6C was 0.2C above average.

Electricity continued to trade within a tight price range:

• 93% of Otahuhu prices were between 6.00 c/kWh and 9.00 c/kWh.
• 68% of Otahuhu prices were between 6.00 c/kWh and 8.00 c/kWh.

Average Daily Prices

Hydrology

National Storage

The South Island hydro inflows were about normal during the month of August leaving South Island storage at 82.0% of historical averages. North Island storage is at 105% of historical averages.

Outlook

Prices in September 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.