New Zealand electricity market

The New Zealand Electricity Market (NZEM) is a wholesale electricity market that was established in 1996. It is the primary platform for buying and selling electricity in New Zealand. The market is used to determine the price of electricity and to manage supply and demand. ASX New Zealand Electricity Futures are standardized and centrally cleared contracts for difference (CFDs) that are cash settled against two grid reference points – Otahuhu and Benmore – in the New Zealand Electricity Market.From: Power System Economic and Market Operations [2018], Electricity and carbon prices: Asymmetric pass-through evidence from New Zealand [2018]

Electricity market overview

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Purchase Book

Published in Jin Zhong, Power System Economic and Market Operations, 2018

Jin Zhong

New Zealand reformed the power industry during the similar time as Australia. The wholesale electricity market, New Zealand Electricity Market (NZEM), was established in 1996. It has the world first nodal pricing-based market model. Transmission grid is owned and operated by the state-owned transmission company, Transpower. M-co, which is the former Electricity Market Company, manages the electricity market as a market regulator. Generators and retailers trade in the power pool and spot market, and electricity is traded and transmitted across the nation-wide transmission grid. Electricity price is determined for each node on a half-hour basis.

Electricity and carbon prices: Asymmetric pass-through evidence from New Zealand

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Journal Information

Published in Energy Sources, Part B: Economics, Planning, and Policy, 2018

Nicholas Apergis

ASX New Zealand Electricity Futures are standardized and centrally cleared contracts for difference (CFDs), while they are cash settled against two grid reference points – Otahuhu and Benmore – in the New Zealand Electricity Market. Their contract unit is 1 MW of electrical energy per hour for both grid reference point base loads, with a period from 00:00 h Monday to 24:00 h Sunday over the duration of the contract month. The prices of those contracts are quoted in New Zealand dollars per megawatt-hour. Based on data availability, wholesale electricity futures prices are employed spanning the period January 2001 to March 2014. Natural gas and coal futures prices are traded at the Australian Securities Exchange (ASX). Prices are in AUD/MWh and in $/ton, respectively, while coal futures contracts are related to the bituminous type of coal.

New Zealand electricity market

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Electricity market overview

Electricity and carbon prices: Asymmetric pass-through evidence from New Zealand