Delivering changes to strengthen the future of the wholesale market

The Electricity Authority has 19 of the 31 recommendations by the Market Development Advisory Group (MDAG) underway and is on track to deliver them. In the year since we incorporated these recommendations into our work programme, we’ve made significant progress towards strengthening the future of the wholesale market. 

We have reported quarterly to provide visibility of the progress we’re making – you can read the Quarterly Report October to December 2024 here.

The Energy Competition Task Force, jointly established by the Authority and Commerce Commission, has picked up and ‘super charged’ several recommendations to encourage more competition in the market and manage electricity price risks.

Under Package One, the Task Force is identifying ways to enable new generators and new retailers to enter and better compete in the market. Package Two initiatives are to identify ways to give electricity consumers more options for how they use and pay for electricity.  

Under Initiative 1B: Introduce standardised flexibility products, the Standardised Flexibility Products Co-design Group has just announced a new super-hedge product (Recommendation 8) ready for trading to begin in late January 2025. This will give participants better access to the risk management tools they need to keep prices low for consumers. 

The Authority has also implemented new hedge disclosure obligations to improve information and insights on the contracts market. This work will increase transparency of prices, contributing to better risk management and investment decisions (MDAG Recommendation 2).

Alongside these policy changes, we’ve improved visibility of the renewables generation pipeline by publishing more timely information on projects (Recommendation 17). This gives the sector a full picture of the investments underway to build out Aotearoa New Zealand’s renewable energy infrastructure. 

We’ve also taken steps to collect and publish more comprehensive information on generation and load, starting early next year. This will improve decision-making and give New Zealanders confidence that more renewable energy is coming online to support growing demand.

We’re publishing additional information about the retail tariffs available to consumers, and consulting on collecting further information from retailers to inform and empower consumers and drive more effective regulation (Recommendation 3).

To improve forecasting of wind and solar energy we’re procuring a new intermittent generation forecaster. Our RFP for a new centralised forecaster closed on 6 December and we are working to have the new forecasting service in place by Winter 25 (Recommendation 1) which will support security of supply and more efficient prices.

We’ve also begun publishing a security of supply outlook which highlights expected market conditions such as hydro conditions to support public confidence in our power supply (Recommendation 15).

There’s more to do, and we are conscious that we must maintain a rapid pace of delivery on this important work in 2025.

In the first quarter of next year, our immediate focus will be on publishing a competition dashboard assessing access to flexibility products as well as changing operational scarcity pricing settings for when supply is tight.

The work to implement the MDAG recommendations aligns with and supports the Government Policy Statement’s clear call for an efficient, affordable and competitive electricity system. 

We want a system in which diverse market participants respond to clear and accurate price signals, use effective risk management tools, and compete to bring to market solutions that meet consumer demand.

As we implement the MDAG recommendations, we will strengthen the electricity wholesale market to meet consumer demand in an increasingly renewables-based electricity system, and ensure consumers have the access to the energy they need now, and in the future.