Market Report - March 2010

The first market report for 2010.

Early January saw South Island Hydro inflows reach 135% above average, driving New Zealand hydro storage to peak capacity at 132%. During this time, some South Island Hydro Generators were forced to spill large quantities of water to manage their lake levels. Through January, DC North transfer was up 70% on December totals, putting Transpower’s restricted HVDC connection to the test.

In early January, energy prices were depressed. This was due to both the lack of load and the high South Island Hydro generation through the holiday period. Later in the month, energy prices firmed as the hydro lakes in the South Island were brought back under control and load returned.

Late in January saw a weather bomb hit the East Coast, giving Waikaremoana a Hydro boost raising the lake levels to 95% full. Running at maximum output has bought the lake back to a manageable level, without disruption to the ongoing Control & Instrumentation upgrade.

A ten day station outage in early January was conducted at Rangipo to allow Transpower to carry out maintenance on their switchgear. This meant that the Tongariro scheme was running at less than full capacity for a period of time. But this has contributed to the increased availability in Genesis Energy Hydro storage as Lake Moawhango rose approximately 10% through the duration of the outage and is currently at 78% of full capacity.

With ongoing high South Island generation, the National hydro storage levels are reaching average rates. We are seeing the Southern Generators backing out of the market in an attempt to control and maintain their storage levels through into Autumn.

The annual thermal outage season continues with Genesis Energy having Huntly Unit 3 on survey, with planned return to service in late March. Huntly U6 also remains on maintenance outage with its return to service scheduled in May.

Contact’s Otahuhu Station remains on outage with a return date in early March.
Mighty River Power is currently commissioning the 135 MW Nga Awa Purua plant in the Wairakei area, bringing additional generation capacity to the market.

A number of Genesis Energy customers were without power in the Auckland region in January. This was due to a Transpower 110kv circuit coming into contact with trees in the Waikato area causing a fire; this resulted in multiple circuits tripping to prevent damage and reduced transmission capacity into Auckland.

18 February saw another significant market event with an unscheduled outage on the High Voltage Direct Current (HVDC) link that connects the power systems of New Zealand’s North and South Islands. This was caused by a fire beneath the HVDC lines in the upper South Island. As a result, prices in the North Island sky-rocketed to $1000 as northward transfer across the HVDC was reduced to zero.