The performance of New Zealand’s wholesale electricity futures market will be enhanced by the introduction of a commercial market-making scheme by the Electricity Authority.

Bold Trading has been selected by the Authority to provide commercial market-making services and will enter the market on 1 September 2022.

"The awarding of this contract and amendments to the Electricity Industry Participation Code will enhance existing market-making arrangements, benefiting competition and ultimately consumers," says James Stevenson-Wallace, Chief Executive of the Electricity Authority.

"This will help strengthen and support the operation of the hedge market, enhance efficiency, and improve trust and confidence in forward prices of electricity in the wholesale electricity market. It will increase market innovation and lead to greater consumer choice and price benefits.

"The Authority’s reform of market making arrangements is part of its future-focused Energy Transition Roadmap, which sets out the actions the Authority is taking to support an efficient transition to a low-emissions energy system."

The changes are the outcome a review of market-making arrangements by the Authority in 2020 which decided on a transition over a period of years, to a full incentivised arrangement where market-marking services are provided solely by commercial market makers.

The NZ electricity futures market is hosted on the Australian Securities Exchange (ASX). This market is currently supported by market-making services provided by New Zealand’s four largest electricity generator-retailers: Contact Energy Limited, Genesis Energy Limited, Mercury NZ Limited and Meridian Energy Limited.

The first iteration of the commercial market-making scheme will mean Bold Trading will provide 20 percent of the total volume of market-making contracts, with the remaining 80 percent being provided by the existing regulated market makers.

Bold Trading was awarded the contract following a two-stage procurement process.

More details are available here(external link)

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Information for Editors:

About the New Zealand Electricity Authority

The Electricity Authority regulates the NZ electricity market. Its statutory objective is to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers. The Authority is an Independent Crown Entity and is accountable to Parliament and has oversight provided by the Minister of Energy and Resources.

The Authority:

  • develops, administers and enforces the Electricity Industry Participation Code (the Code), which is a set of rules that govern nearly every aspect of NZ’s electricity industry including generation, transmission, system operation, security of supply, market arrangements, metering, distribution and retail;
  • supports the development of the industry through education, guidelines, information and model arrangements;
  • monitors the industry and makes information available through the Electricity Market Information (EMI)(external link) website; and
  • contracts service providers to operate the electricity market and system as set out in the Code.

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For more information contact:

Sean Martin | Principal Communications and Engagement Advisor, Electricity Authority

Email: sean.martin@ea.govt.nz, Mobile: +64 (0)21 073 7777