The Electricity Authority Transpower published an issues paper Promoting competition in the wholesale electricity market in the transition toward 100% renewable electricity in November 2022.
The Issues paper follows the Authority’s Market Monitoring Review of Structure, Conduct and Performance in the Wholesale Market (WMR) from 2019 to mid-2021 which concluded that prices had, at least to some extent, reflected underlying supply and demand conditions but that a sustained upward shift in the average price level was not fully explained.
The authority also noted that the transition toward 100% renewable electricity may increase market power of generators with storable fuel, especially at those times that the electricity market relies on flexible generation and therefore published the Issues Paper.
NZWEA, in its submission, also referenced the review undertaken by the EA’s Market Development Advisory Group and its conclusion that the forecast increase in wind and solar generation will cause more spot price volatility and strengthen the importance of hydro flexibility.
The Association agreed with the EA’s view on the high level of market uncertainty and supported the proposed initiatives to promote wholesale competition. View NZWEA’s submission below: