Consultations

The Authority is seeking feedback from interested parties on the Making hours-ahead price forecasts more accurate consultation paper.

We have been considering ways to improve the accuracy of prices in the forecast schedules available up to 36 hours in advance of real-time. This is one of two spot market refinements we are exploring (the other is real-time pricing).

We expect that making hours-ahead forecast prices more accurate would encourage more efficient demand-response and generation scheduling. This would promote all three limbs of the Authority’s statutory objective. It would promote efficient short-term (that is, operational) decisions about demand-side participation and generation dispatch. Longer term, it would improve decisions about generation investment and retirement, as well as promoting retail innovation and confidence in the wholesale market.

We’ve published a consultation paper seeking views on options to improve spot pricing arrangements in the wholesale electricity market. At present, the pricing manager does not determine and publish final spot prices for a trading period until at least two days later. We have considered options under which final spot prices would be determined before, during, or just after the trading period.

We have developed four options to a conceptual level, two of which (dispatch-based prices and 5-minute ‘look behind’ prices) we expect would deliver net benefits compared with current arrangements.

If one of these options was adopted, it would replace the current method for calculating spot prices. Our assessment suggests dispatch-based pricing would deliver greater net benefit to consumers than the other options we considered.

We are seeking submissions to decide whether to explore real-time pricing in more detail and, if so, which option to develop further. If we consider that a real-time pricing option is consistent with our statutory objective, we will prepare a formal proposal to amend the Electricity Industry Participation Code 2010 (Code), for consultation in the 2016/17 financial year.

If we decide to adopt real-time pricing, we expect it would take more than two years to implement.

Workshop - Assessment of real time pricing options