Low Water Inflow into Clutha River
Compared to the last 85 years of record keeping, the lowest average inflows into the Clutha River were recently seen this past March, April and May. Because of the continued shortage of water into Clutha River's hydro-electric dams, Contact Energy has had to come up with a solution to continue to meet customers’ energy demands.
North Island Gas Plants to the Rescue!
The solution to the water shortage was to turn to Contact Energy’s North Island thermal plants to work harder to fill the energy void. More energy to the North Island (compared to the South Island) is being supplied by the Cook Strait cable.
Thermal Energy Needed when Weather Does Not Cooperate
Although the New Zealand electricity market strives to be as renewable as possible, sometimes it is not possible to meet energy demands using only water and wind as resources. When help is needed, the thermal energy gas stations can help fill the energy gap, which is what is happening currently.
More Rain Would Stop the Lake Levels from Decreasing Any Further
The recent weather cold fronts from the south have been bringing snow instead of rain. This, in turn, has been causing dramatic increases in electricity demand. Overall, however, this winter is warmer and dryer than previous years, so more rain would help increase the water levels and help the power supply issue.
If hydro lake levels continue to drop, more pressure would be applied to alternative power sources throughout the country, which could lead to environmental impacts.
Low Water Levels Resulted in Greater Spot Power Prices
Because hydro-generated energy makes up about 60% of New Zealand’s electricity, the recent low levels in the hydro lakes have meant wholesale prices continue to increase. Customers who are on wholesale pricing agreements with retailers are noticing the increase on their energy bills. Although spot tariffs can offer long-term savings, customers who choose this must be willing to weather periods of higher than average prices, such as what we are currently facing. Spot tariff customers should keep an eye out for price spikes and get into the habit of shifting some of their energy use to off-peak times.
To eliminate any risk for future price spikes, customers should consider switching to a traditional fixed rate or smooth-pay plan.
Let Switchme Save YOU Money!
Has your electricity rate increased sharply, due to the low lake levels? If so, let Switchme help you compare power prices to see if something more reasonable is available! Contact us today for more details and to use our free power price comparison calculator.