Market Design Review
The Market Design Review project also provided an opportunity to consider whether the design of the market needs to be modified to:
- Reflect significant changes to the structure of the industry, technology and fuel costs over the last ten years; and
- Address potential future developments, such as increased levels of renewable and intermittent generation.
In May 2007, the Commission released an Issues Paper for consultation to identify areas or issues that needed further attention. The Issues Paper presented information on the performance of the current arrangements in terms of providing security of supply, the level and trends in prices, opportunities for demand-side participation, and the level of competition.
Five key areas of concern were identified:
- Pricing and competition (especially in the retail market)
- Energy affordability issues
- The effectiveness of the energy-only spot market design
- Demand-side participation
- Availability of market information.
In July 2008, the Commission released an Options Paper for consultation, which presented possible options for addressing concerns identified in the Issues Paper, and proposed future actions.
The recommendations concerning improving electricity market performance that came out of the Market Design Review project were integrated with other priority projects under the Market Development Programme.
Issues Paper update reports
The Commission prepared a Market Design Review - Update Report, dated 4 October 2007. This report presented:
- the Commission's initial views on the areas where improvements might be possible to the current design of the electricity market
- the broad direction of work that the Commission intends to pursue in the next stage of the Market Design Review.
Energy Poverty Data
The Energy Poverty Data (spreadsheet) used to derive figures 33-36 in the Market Design Review: Options Paper is available for download.
Long Run Marginal Cost (LRMC) Data
The LRMC Data (spreadsheet) used to derive figure 7 in the Market Design Review: Options Paper is available for download.
Background to the review
- NZIER The markets for electricity in New Zealand (February 2007)
- NZIER market design reports - August 2005
- LEGG and TWSCL report on the state of competition in wholesale and retail markets - August 2004