Decision paper on wholesale market information disclosure – review of thermal fuels
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The Authority has decided to amend the Electricity Industry Participation Code 2010 (Code) to improve the availability of thermal fuel information, following a consultation process in July - September 2020 and subsequent consultation on Guidelines for participants on wholesale market information disclosure obligations in October - November 2020.
The Code amendment comes into force on 1 April 2021 and imposes further obligations on a new class of participants, called major participants, including an obligation to report to the Authority on how they are meeting their disclosure obligations under clause 13.2A of the Code.
The decision to amend the Code and other decisions related to the Authority’s review of thermal fuel information is set out in a decision paper published today.
These decisions will help build confidence for participants in the market by allowing them to better manage risk by giving them more visibility of market activities, which will ultimately benefit consumers in the long-term through more efficient prices.
The next phase of the project will look at hydro disclosure and commence early 2021.
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Hedge Market Enhancements – update on market making implementation
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The Authority decided to pursue a commercial market making approach in 2020 and will continue to implement this decision throughout 2021. The decision is set out in full on the Authority’s website.
Consultation on a proposed mandatory market making backstop closed on 18 January 2021. The Authority intends to announce its decision on this proposal in April 2021.
The Authority has made progress on procuring commercial providers of market making services. On 19 January the Authority initiated a Request for Information (RFI) to further inform the design of the commercial market making scheme. Interested providers of commercial market making are invited to provide feedback on the Authority’s proposed scheme design.
Following the RFI close in March 2021, the Authority will use the information provided to refine the commercial market making scheme design, with the intention to progress to a formal procurement process in the second half of the year when interested parties will be shortlisted for a Registration of Interest, then a Request for Proposal toward the end of the year.
The Authority anticipates commercial market making will commence in early 2022.
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Hedge Market Enhancements – permanent mandatory market making backstop consultation paper submissions published
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On 24 November 2020 the Authority published a consultation paper Hedge Market Enhancements – Permanent market making backstop, and invited stakeholder feedback. Submissions closed on 18 January 2021. Eleven submissions were received and are now available on our website. The Authority intends to announce its decision on this proposal in April.
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Market performance quarterly review – October 2020
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This review covers a broad range of topics in the electricity market and provides data and commentary. It is published quarterly to provide visibility on some of the regular monitoring undertaken by the Authority. This review gives an overview of the market between July to September 2020, and also includes a deep dive on high prices on 14 May 2020.
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Reminder: Stress testing regime – update to energy shortage scenario
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The Authority has updated the energy shortage stress test scenario in anticipation of expected spot price volatility in 2021.
A forecasted La Niña climate event is likely to cause an extended dry period in 2021 and there is also reported reduction in some gas supply.
This means there is an increased probability that the spot market will be impacted.
Given these factors, the Authority wants to ensure that wholesale market participants are aware of the potential for spot price volatility and are pro-actively managing their risk exposure.
The updated scenario assumes an average spot price of $400/MWh for the quarter. This is reflective of current market risk compared to the previous setting of $250/MWh.
A reminder that test scenarios are hypothetical and are not forecasts. They are scenarios designed to ensure disclosing participants have considered the spot price volatility which may arise from rare, yet possible, risk events.
For more information please contact marketoperations@ea.govt.nz
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Reminder: Beginner registry user training – spaces available in Wellington
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The Authority is running two-day, hands on, training courses for registry users in 2021. Limited space is still available for the Wellington training on 17 and 18 March 2021.
The course is suitable for new registry users and participants who want to gain knowledge of how the registry and associated processes work.
Registration is essential. To express an interest in attending please email your name and contact details to conference@ea.govt.nz as soon as possible with ‘registry training’ in the subject line.
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Electricity Industry Participation Code Amendment (Metering and Related Registry Processes) 2020
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On 1 February 2021 the Electricity Industry Participation Code Amendment (Metering and Related Registry Processes) 2020, will come into force.
The amendment relates to Parts 1, 10, 11 and 15 of the Code and makes a number of improvements to the Code that the Authority had identified in the course of its operational review of metering and related registry processes.
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Draft determination of the causer of the 4 February 2020 under-frequency event
Ending: 09/02/2021 5pm
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Level 7, Harbour Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand
Tel: + 64 4 460 8860 Email: communications@ea.govt.nz
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