Presentation by Greg Sise for OERC Symposium 2017

1. The 2017 Dry Period
How dry was it?
How did the market perform?
Greg Sise, Energy Link Ltd

2. Prices Hit Highs in 2017
-$10
$10
$30
$50
$70
$90
$110
$130
$150
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
$/MWh Benmore Average Monthly SpotPrices
15 c/kWh

3. New Zealand storm: states of emergency declared as flooding
hits South Island The Guardian
Sources: RNZ / Sebastian Beyrer, Metservice, Twitter / @DnEmergency, Otago Regional Council

4. Prices Hit Highs in 2017
HVDC link
Benmore
Haywards
Pukaki, Tekapo, Hawea, Wanaka,
Wakatipu, Manapouri,
Te Anau, …
Taupo,
Waikaremoana, …
North Is
South Is

5. Prices Hit Highs in 2017
$0
$50
$100
$150
$200
$250
$300
$350
Oct-96
Jun-97
Feb-98
Oct-98
Jun-99
Feb-00
Oct-00
Jun-01
Feb-02
Oct-02
Jun-03
Feb-04
Oct-04
Jun-05
Feb-06
Oct-06
Jun-07
Feb-08
Oct-08
Jun-09
Feb-10
Oct-10
Jun-11
Feb-12
Oct-12
Jun-13
Feb-14
Oct-14
Jun-15
Feb-16
Oct-16
Jun-17
$/MWh Benmore Average Monthly SpotPrices
2012 set new
records for low
inflows in the
South Is

6. SI Storage – A New Record
Cumulative South Island inflows from: 14-Feb
2017 13% lower on 12th July

7. Storage in 2017 – South Island
0
500
1000
1500
2000
2500
3000
3500
4000
NewZealandStorageGWh
Date
South Island Storage Percentiles [since 1998] (Updated 08 November 2017)
5-25th Percentile 25-50th Percentile 50-75th Percentile 75-95th Percentile
Average Storage Current Storage Minimum Storage
1992 minimum X

8. Storage in 2017 – North Island
0
100
200
300
400
500
600
NewZealandStorageGWh
Date
North Island (Taupo) Storage Percentiles [since 1998] (Updated 08 November 2017)
5-25th Percentile 25-50th Percentile 50-75th Percentile
75-95th Percentile Average Storage Current Storage

9. Inflow Trends
0
50
100
150
200
250
300 1931
1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
Pukaki Inflows: 20 years Rolling Average
February March April
April
March
February

10. Benmore Price versus Storage Deviation
-$100
-$50
$0
$50
$100
$150
$200-1,500
-1,000
-500
0
500
1,000
1,500
2,000
7-Jan-09
7-Mar-09
7-May-09
7-Jul-09
7-Sep-09
7-Nov-09
7-Jan-10
7-Mar-10
7-May-10
7-Jul-10
7-Sep-10
7-Nov-10
7-Jan-11
7-Mar-11
7-May-11
7-Jul-11
7-Sep-11
7-Nov-11
7-Jan-12
7-Mar-12
7-May-12
7-Jul-12
7-Sep-12
7-Nov-12
7-Jan-13
7-Mar-13
7-May-13
7-Jul-13
7-Sep-13
7-Nov-13
7-Jan-14
7-Mar-14
7-May-14
7-Jul-14
7-Sep-14
7-Nov-14
7-Jan-15
7-Mar-15
7-May-15
7-Jul-15
7-Sep-15
7-Nov-15
7-Jan-16
7-Mar-16
7-May-16
7-Jul-16
7-Sep-16
7-Nov-16
7-Jan-17
7-Mar-17
7-May-17
7-Jul-17
7-Sep-17
7-Nov-17
GWh
Weekly Price at Benmore versus Storage Deviation from Average
Storage Deviation from Average Benmore Weekly Average Price

11. Benmore Price versus Storage Deviation
-1,500
-1,000
-500
0
500
1,000
1,500
$0 $50 $100 $150 $200 $250 $300
NZStorageDeviation
2012
2017

12. HVDC Average Monthly Transfers
-600
-400
-200
0
200
400
600
800
Net DC Nth DC Nth DC Sth

13. Cost of HVDC Transfers (Corrected for Price Level)
0%
10%
20%
30%
40%
50%
60%
%Cost Nth %Cost Sth
HVDC Link upgraded
HVDC
upgraded
Cost = price difference across the HVDC link  price at the receiving end of the HVDC link

14. Cost of Inter-island Transfers
-1,500
-1,000
-500
0
500
1,000
1,500
$0 $50 $100 $150 $200 $250 $300
NZStorageDeviation
2012
2017
Lower inter-island costs

15. Conclusions
• 2017 set a new record for low inflows in the South Is hydro lakes
• North Is inflows remained at very high levels
• Spot prices responded to changes in hydro storage more or less as we
would expect from the historical perspective
• Upgrades to the HVDC link, completed in 2013, lowered the cost of
transporting power south, resulting in lower spot prices in the South Is
relative to hydro storage

16. The 2017 Dry Period
Thank You