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NZX is today releasing the historical series and methodology for two new electricity price indices. The indices are both based on the price paid by purchasers of electricity on the wholesale spot market, such as electricity retailers, or large electricity users.
The NZX Electricity Purchasers’ Final Price Index (FPI) is derived from final prices, and the NZX Electricity Purchasers’ Indicative Price Index (IPI) is derived from the indicative five minute prices. These indices are weighted averages of the nodal prices at Grid Exit Points (GXPs) on the New Zealand transmission grid.
NZX is releasing historical values (2005 – 2009) and methodology behind the indices to give interested parties the opportunity to analyse and understand their dynamics. Historical series for the indices are calculated for Upper North Island, Lower North Island, South Island and New Zealand.
NZX will soon launch a live feed of the indices through its normal data channels.
The graph below of the NZX FPI for New Zealand clearly shows the high prices during the dry winter of 2008 and an increased occurrence of price volatility since 2007.
BACKGROUND
There are two NZX Purchasers’ Electricity Price Indices, each calculated for four regions:
NZX Electricity Purchasers’ Indicative Price Index (NZX IPI)
Upper North Island
Lower North Island
South Island
New Zealand
NZX Electricity Purchasers’ Final Price Index (NZX FPI)
Upper North Island
Lower North Island
South Island
New Zealand
As outlined in the methodology, the Indicative Price Index will be calculated from indicative “five-minute prices” and distributed in near real time once the five-minute prices are published for each 30-minute electricity trading period. The Final Price Index will be calculated daily for each 30-minute trading period, from the final prices which are published daily by NZX.
Electricity prices are published through the Wholesale Information and Trading System (WITS) maintained and operated by NZX.
The indices calculation uses Grid Exit Point (GXP) prices. These are the wholesale prices that are paid by electricity retailers and other parties that purchase electricity on the wholesale spot market.
The index is weighted by load at each point, and nodes with low volumes are excluded.
