Price Discovery in a Renewables-based Electricity System

March 2023 

The Electricity Authority’s Market Development Advisory Group (MDAG) released their Price Discovery in a Renewables-based Electricity System - options paper in December 2022. The Options Paper follows an earlier paper considering the issues of how price discovery would work in the wholesale electricity market under a 100% renewable electricity system.

Once MDAG has considered submissions, a third paper providing recommendations will be prepared for the Electricity Authority Board’s consideration.

In its submission NZWEA supported MDAG’s assessment as to the importance of the wholesale market to provide spot prices that signal the value of electricity. The Association also supported the proposed five key areas for future action and most of MDAG’s preferred recommendations.

In particular the Association considers it important to address the capacity constraints due to the mismatch between slow start thermal and variable wind and solar generation, as identified in the Electricity Authority’s Winter 2023 Consultation. Key initiatives supported include improving information, introducing a new reserve product, wholesale market product development and enhancing demand side flexibility capability.

Click on the link below to read NZWEA’s submission in full.