Wholesale market
Electricity is bought and sold on the wholesale market. There are about 330 participants in New Zealand's wholesale electricity market.
About the wholesale market
The wholesale market is where generators sell electricity and retailers buy electricity. Retailers then on‑sell that electricity to businesses and households across New Zealand.
There are about 80 generation companies, 62 retailers and 6 gentailers (generator-retailers) in New Zealand's wholesale market. The remaining wholesale market participants comprise distribution and network companies and traders in secondary markets, such as financial hedges.
The spot and hedge markets are the major components of the wholesale market. Prices on the spot market are calculated every half-hour and vary depending on supply and demand, and the location on the national grid.
In addition to buying electricity directly from the spot market, retailers and large industrial users can also enter into financial contracts (hedges), which smooth out some or all of the volatility in spot prices. For retailers and large industrial users, a hedge is a form of insurance against the financial harm of high electricity prices. Equally, some generators can sell their output via hedge contracts, insulating them against the risk of low spot prices.
Our role
What we do
We work to ensure the wholesale electricity market is efficient, reliable and competitive to achieve the best long-term outcomes for households and businesses across New Zealand.
We do this by developing the policy, systems and rules for the buying and selling of wholesale electricity and for managing security of supply.
New participant?
Find out how to register and participate in the electricity industry.
More about the wholesale market
Learn about how different parts of the wholesale market operate and interact, our responsibilities and industry participants' obligations. This section includes general information, as well as more technical information for industry participants.
Spot market
The spot or wholesale market is a marketplace to buy and sell electricity. It is known as a ‘spot’ market because prices are set on the spot, at a particular time and place.
Hedge market
An active hedge or futures market is critical to promote competition, reliability and efficiency in the wholesale and retail markets. It helps create transparent and robust forward prices and easy accessibility for new generators, retailers and consumers.
Security of supply
Security of supply is the balance of electricity supply and demand over time. It's how the wholesale market balances electricity supply and demand in response to generators' ability to supply demand today and in the future.
Wholesale information and trading system
The wholesale information and trading system is for industry participants to upload their bids and offers. It also makes pricing, scheduling and other market data available to industry participants and the public.
Undesirable trading situations
Undesirable trading situations are extraordinary events that threaten the integrity of the wholesale market.
It's our priority to make sure the wholesale market operates efficiently and competitively, so we investigate undesirable practices that can deter trading and participation.
Report an undesirable trading situation, view claims and decisions
Wholesale market participants' obligations
All participants in the wholesale market must comply with their industry obligations as set out in the Code.
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