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Spot power prices have trebled in recent weeks as fears grow that the drought and near-record low lake storage levels could force compulsory power cuts within 3 weeks. M-Co reports lake storage levels at 58% of average capacity levels, down from 62% a week ago.

Transpower Chief Executive Patrick Strange said in announcing the launch of a new website to inform the public on lake levels and power usage that compulsory power cuts were possible within three weeks if there was no significant rainfall or a large power station went off line.

New Zealand has yet to see the traditional winter heating power spikes, but the risks of a winter storm are rising.

Rising spot power prices were a major factor in higher producer price inflation in the first quarter and there are signs higher spot power prices are dragging production lower. Rio Tinto’s Tiwai Point aluminium smelter has already cut output 10%.

Tags: Electricity, Inflation, Patrick Strange, Transpower

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This entry was posted on Tuesday, May 27th, 2008 at 11:23 am and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.