Introduction

The MDP initially integrated the outputs of two Electricity Commission reviews - the Market Design Review and the Winter 2008 Review. It also drew on the outcome of the Commerce Commission investigation into the electricity market.

Advisory Groups have been involved in the development of the MDP, along with technical groups drawn from a range of interested parties to provide advice for some of the projects.

The Electricity Commission published an MDP Overview Paper in September 2009 to provide an outline of the issues and the Commission's proposed solutions.

The Electricity Commission published a further paper to coincide with the MDP conference in May 2010. This paper details progress and current thinking on the core projects and the integrated market development package.

The Authority is progressing a number of the MDP projects as priority projects.

In September 2010, the Commission published a working draft of an integrated cost-benefit analysis (CBA) covering five interrelated projects in its Market Development Programme.

The working draft is not a consultation paper, but the Commission welcomed feedback from interested parties on the approach taken and on the identification of the costs and benefits. The paper will be refined as the individual projects progress.

MDP projects

  • Transmission pricing review - reviewing the allocation of transmission costs to enable the efficient use of, and investment in, transmission assets, and to provide a coherent signal through the electricity value chain
  • Instantaneous reserves market - determining whether interrupting residential hot water load utilising frequency sensitive relatys can be used to reduce procured instantaneous reserves quantitiies and costs
  • Improve frequency keeping market - developing a system to coordinate multiple frequency keepers, including a national-based market instead of an island-based market.
  • Scarcity pricing and default buy-back project - this is a priority project
  • Locational hedges project - this is a priority project
  • Property rights for load management project, including demand-side bidding and forecasting, and dispatchable demand - these are priority projects
  • Standardising distribution tariff structures and use-of-system agreements - this is a priority project.

Technical Groups


The following technical groups were established to provide advice on the market development projects:

  • Scarcity Pricing and Default Buyback Technical Group
  • Locational Price Risk Technical Group
  • Transmission Pricing Technical Group