Last updated: 12 Dec 2023
The final phase of the real-time pricing project went live on 27 April 2023, integrating dispatchable demand and lower-compliance dispatch notification products with the real-time wholesale market pricing system that we launched in November last year in collaboration with the Electricity Authority and NZX.
Real-time pricing delivers wholesale electricity spot prices to participants immediately after the end of each trading period. These prices are based on the time-weighted average of the prices set during dispatch, this means that participants can make efficient real-time decisions about their consumption and generation.
Previously, indicative spot prices for energy and instantaneous reserves were not finalised until at least two days after the trading period. While these indicative prices were generally a sound guide to final prices, large differences could arise, especially when the system is under stress.
The new dispatch notification products opens a low-cost path for small-scale providers of distributed energy resource such as aggregated residential solar and battery systems to bid and offer their resources into the wholesale market.
Enhancements to dispatchable demand will allow large industrial consumers to limit their exposure to high spot prices by bidding flexible demand into the wholesale market when prices are high and/or offering this flexible demand as instantaneous reserves.
By allowing demand flexibility and distributed energy resources to be bid and offered into the wholesale electricity market, real-time pricing will help unlock innovation across the electricity system to support New Zealand’s transition to a net zero carbon future.
Read more about real-time pricing in this brochure on the Authority’s website: Electricity Authority Real-time Pricing Brochure
Find out more about the dispatch notification product and dispatchable demand here: Final phase of real-time pricing | Electricity Authority
Information for participants
Demand side participants can find more information here, including a new guideline about dispatchable demand and dispatch notification.
Generation side participants can find all the information they need here, including updated guidelines.
For any other questions about how your demand flexibility or distributed energy resources can participate in the wholesale market, please contact the System Operator on [email protected].
Development of real-time pricing
In April 2016, the Authority conducted an assessment of real-time pricing options with a view to improving spot pricing arrangements in New Zealand’s wholesale electricity market. The Authority’s assessment considered four real-time pricing options, under which final spot prices would be published during or immediately after the finish of each trading period.
Following a period of consultation with industry participants, the Authority in August 2016 decided to further develop the 5-minute real-time pricing option and later announced it as the preferred option.
The Authority then developed the core design elements of the real-time pricing system and commissioned Transpower – in its role as System Operator – to develop the system and implement it in the wholesale market. NZX as the manager of the related wholesale information and trading system (WITS) was also heavily involved.
Details of the decision to implement real-time pricing can be found on the Authority’s website alongside consultation papers and industry feedback.