If you buy electricity from a retailer or gentailer, you won't be directly affected right now.
But if you buy wholesale, you may be shaking.
Prices over $1000/MWhr (megawatt hour) are becoming all-too frequent as the cold winter blast coincides with low lake levels and inflows, and low wind generation.
This is where prices were at 8:30am Tuesday.
Earlier they were even higher, some as much as $300 higher.
Normal used to be <$100/MWhr. So we are running at least 10 times normal, maybe more.
Worse, it is hard to see this pressure ending soon.
The Haywards flow across Cooks Strait is almost at capacity. Brownouts loom. Major users (like Tiwai Point) have already cut back sharply, so that adjustment has already been made.
Huntly's coal-fired capacity is running hard. Gas-fired too. It may not be enough.
At some point this will hit consumers. Wholesales can't keep buying at over $1000/MWhr and on-selling to consumers at low fixed contracted prices. Price signals are important to reducing demand and that isn't happening at present except in the industrial sector.
The mismatch is because we have far too little headroom in our renewables capacity. It's unreliability as baseload is being exposed. We haven't invested in big hydro in decades, preferring to boost alternative renewables. But the rain has to fall, the sun shine, and the wind blow for those to work, and that isn't what is happening in the high-demand 2024 winter.
We have had extreme price stress in the past, but as the chart below shows, things settled back after. But that isn't happening now. A major public policy test looms.
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