Energy Resources Aotearoa welcomes the introduction of a new standardised flexibility product, which will be brokered by member Aotearoa Energy to improve competition in the wholesale electricity market.

Energy Resources Aotearoa Chief Executive John Carnegie says the new standardised super-peak hedge contracts traded by Aotearoa Energy will allow wholesale market participants to manage high wholesale electricity price risk during periods of peak demand when intermittent generation may be at its lowest.

"Providing a new insurance policy for wholesale market participants means our major exporters and regional employers will have more options to manage and avoid price spikes when the sun isn’t shining, hydro lake levels are low, and the wind isn’t blowing.

We’re pleased to see an industry-led representative panel appointed by the Energy Competition Task Force select Energy Resources Aotearoa member organisation Aotearoa Energy as the broker for this first trading event."

Aotearoa Energy Director Daniel Skipper says he’s pleased to be able to bring trading for these products online, especially given the short timeframe to launch.

"Our team has considered offering trading for these products since 2022. With a complete vision for market function, participant engagement, and feedback already fleshed out, we’re delighted to have brought this solution online quickly.

We hope to expand the participation in the trading window to include all types of energy market participants, not just retailers, generators, and financials for hedging, but additional liquidity from major users and renewable generators."

Carnegie says as part of a wider risk management strategy, the new tool can help industrial users keep costs under control through the risk of a constrained energy supply in winter 2025.

"In 2024, major energy users announced plans to shutter production due to ongoing losses driven by high input costs, including energy.

Deindustrialisation is not the way to a vibrant, prosperous economy that benefits all Kiwis. This tool will provide stability against unpredictable spikes in electricity prices, keep our largest exporters and employers operational, and enable them to continue making significant contributions to the New Zealand economy."

About Energy Resources Aotearoa

Energy Resources Aotearoa is New Zealand’s peak energy industry body. We represent participants from right across the energy system, providing a strategic sector perspective on energy issues and their adjacent portfolios. 

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