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Risk management through the transition

Pricing in a renewables-based electricity system

The Government is aspiring to achieve 100% renewable electricity by 2030. The Market Development Advisory Group is investigating how the wholesale electricity market might operate with an electricity supply that is renewables-based.

  • Generation
  • Low emissions

    • Overview

    This project has three key stages:

    1. Issues discovery - understanding how the electricity system is likely to behave and how the market should be designed with an electricity supply that is renewables-based.
    2. Option identification and analysis - identifying and analysing solutions for future action.
    3. Recommendations and proposal - reporting to the Electricity Authority’s Board.

    We have consulted on the Price discovery in a renewables-based electricity system - options paper and look forward to sharing the submissions received and our next steps soon.

    Timeline

    Past activity

    Project background

    New Zealand has committed to achieving net zero emissions by 2050, with the Government aspiring to achieve 100% renewable electricity by 2030. Over the coming decades it is likely that heating and transportation in New Zealand will need to be electrified, causing a significant increase in demand for electricity. This will need to be met by large quantities of new renewable electricity generation.

    This project, led by the Market Development Advisory Group (MDAG), aims to understand how price discovery would work in the New Zealand wholesale electricity market (including spot and hedge markets), in a renewables-based electricity system. MDAG will develop recommendations for changes to the wholesale electricity market. The aim of these recommendations is to ensure economically efficient price signals (from short to long term) and the efficient operation of the electricity industry for the long-term benefit of consumers.

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