Hydro storage and demand continue to decline

16 November 2004

Hydro storage and demand continue to decline in October

While October saw a continued decline in demand due to improved weather conditions, below average hydro inflows and declining storage levels as a percentage of average resulted in an overall increase in wholesale market prices over the month. Monthly average prices at the Haywards, Otahuhu, and Benmore reference nodes all increased in October in comparison to September’s figures.

The average Haywards prices increased from 2.97c/kWh in September to 3.58c/kWh in October and Otahuhu prices increased from and 3.28c/kWh to 3.80c/kWh respectively. The monthly average price at Benmore increased from 2.67c/kWh in September to 3.41c/kWh in October. An unplanned outage of the half of the HVDC inter-island link occurred on 5th October. While this resulted a northward flow limitation of 886MW for the remainder of the month, there was no noticeable impact on price differentials between the North and South Island.

Daily demand during October was at a lower level than that recorded during September. Daily demand exceeded 110GWh only twice in October. In September daily demand exceeded 110GWh on 19 days. Average daily demand in October was 101.7GWh compared to 109.2GWh in September and 99.3GWh in October 2003. Hydro inflows in October were 84% of average for the month and at 31 October total national storage stood at 91% of average for that time of the year. While total storage levels actually increased 62GWh in October, as a percentage of average they declined.

Summary of Wholesale Electricity Prices

Physical Market Daily Average Energy Prices

0

5

10

15

20

25

1-Aug 1-Sep 1-Oct

c/kWh

Otahuhu Haywards Benmore

All figures quoted are in cents per kilowatt hour (c/kWh) as this is the unit measure used in domestic consumers’ power bills.

May 2004 June 2004 July 2004 Aug 2004 Sep 2004 Oct 2004

Otahuhu

Average price 4.55 3.63 2.86 3.31 3.28 3.80

Highest price 27.26 107.89 109.36 110.56 9.81 14.24

Lowest price 0.12 0.00 0.01 0.04 0.04 1.43

Average weekday 4.71 3.93 3.11 3.78 3.32 3.88

Average weekend 4.24 2.94 2.26 2.16 3.19 3.64

Haywards

Average price 4.42 3.35 2.61 3.95 2.97 3.58

Highest price 25.91 101.82 100.66 1201.91 8.62 6.46

Lowest price 0.11 0.00 0.01 0.04 0.04 1.33

Average weekday 4.56 3.63 2.84 3.54 2.99 3.68

Average weekend 4.12 2.69 2.92 4.95 2.89 3.39

Benmore

Average price 4.26 2.72 1.77 2.69 2.67 3.41

Highest price 24.59 6.39 5.43 89.06 6.29 5.98

Lowest price 0.11 0.00 0.00 0.00 0.04 1.27

Average weekday 4.38 2.83 1.92 3.07 2.69 3.51

Average weekend 3.99 2.48 1.42 1.74 2.63 3.24

Please note: the average prices quoted in this release are the time-weighted half-hour wholesale electricity prices at the location indicated. Wholesale prices tend to fluctuate in the short term and are set by competitive behaviour in the market. Half-hourly and annual averages are published on www.comitfree.co.nz. The wholesale electricity price differs from the retail electricity price, which is the price domestic consumers pay retailers for electricity and is the price consumers see on their electricity bill.

ENDS

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