Cities drive electricity demand, says Mercury

National electricity demand was 0.5% higher for the three months ended September 30, 2023, says Mercury in its quarterly operational update.

It attributes the increased demand mainly to cities and partially offset by lower industrial demand caused primarily by Cyclone Gabrielle’s impact on the Pan Pac timber mill, Hawke’s Bay.

Mercury says higher national inflows during the quarter were reflected in spot electricity prices averaging $132/MWh in Auckland. 

“Forward prices remained high at $152/MWh in Auckland for financial years 2024 to 2026 as at 30 September 2023.”

Dry conditions in the Waikato which reduced hydro generation were partially offset by wind power at 529GWh (129GWh), primarily a result of a full quarter of generation from the Turitea South wind farm (86GWh) near Palmerston North and Kaiwera Downs 1 near Gore adding 9GWh to the quarter with full operation expected by the end of October.

 Mercury also reports a successful trial migration to the Gentrack billing system with more than half of customers now under the new system, and strong electricity yield growth driven by commercial and industrial mainly due to contract repricing to a sustained higher electricity forward curve.

Retail connections were 10,000 higher than PCP but 6000 lower than Q4FY23, with the quarterly reduction primarily due to a focus on successfully delivering on customer migration, says Mercury.