6 Feb 2017

Electricity prices stable in 2016 - analysis

7:12 am on 6 February 2017

New analysis shows wholesale electricity prices were more stable last year than at any time on record.

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The analysis found that 2016 was the least volatile year for electricity prices since 1997. Photo: 123rf.com

The analysis came from the consultancy firm, Energy Link.

This looked at electricity prices at three points, Benmore in Canterbury, Haywards in the Hutt Valley and Ōtāhuhu in Auckland.

The work used several different analytical methods and putting them all together found 2016 was the least volatile year since 1997.

Prices were also lower than forecast - with average prices at Benmore $50.49 a megawatt hour, one third below forecasts.

Even at Ōtāhuhu, at the far end of a long transmission line, average prices were $60.41 per megawatt hour, one quarter below forecasts.

Energy Link attributes part of this to higher water inflows into hydro lakes than average, making electricity generation more plentiful.

Compounding this effect was lower demand, with less electricity needed for irrigation and less electricity for home heating during a milder winter.

The Benmore figure of $50.49 works out at 5.049 cents a kilowatt hour.

Average retail prices were 28.12 cents a kilowatt hour, though most of this came from lines and other costs, not the price of electricity itself, which has been falling slightly for retailers as well as wholesalers.

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