It sees no compelling reason to make any fundamental changes to New Zealand’s spot market design. However, the Authority is proposing to develop and evaluate two options that have the potential to enhance retail competition for the long term benefit of consumers.

The options are to:

  1. base settlement prices on real-time prices (RTPs) calculated and published during the trading period
  2. add an hours-ahead market so that real-time prices apply only to residual quantities not covered in the hours-ahead market.

These options should improve efficiency and support retail and hedge market competition because spot market participants would receive more reliable and timely information on settlement prices. This should help them to make better decisions about discretionary generation and consumption, which will contribute to more efficient market outcomes.

Subject to consultation, the Authority is proposing to add a project to its work programme in 2015/16 to explore these options in detail sufficient to prepare a consultation proposal.

As part of its review, the Authority sought the views of experts on the PJM market in the US and the National Electricity Market (NEM) in Australia. These experts were Howard Haas and Joseph Bowring from Monitoring Analytics (the official monitor for the PJM market) and Greg Thorpe from Oakley Greenwood (consultant specialising in energy market design), respectively.

Their reports are attached as appendices to the main body of the Authority’s discussion paper. 

Howard Haas and Greg Thorpe were available to discuss and answer questions about their reports at a workshop on 15 April 2015.

Workshop

Feedback was requested by 5pm on Tuesday 5 May 2015.

 

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