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Market Design Review

Index

Introduction

The Commission began the Market Design Review in 2007 to identify what changes could be made to the electricity market to improve its performance.

The Market Design Review project has also provided an opportunity to consider whether the design of the market needs to be modified to:

  • Reflect significant changes to the structure of the industry, technology and fuel costs over the last ten years; and
  • Address potential future developments, such as increased levels of renewable and intermittent generation.

In May 2007, the Commission released an Issues Paper for consultation to identify areas or issues that needed further attention. The Issues Paper presented information on the performance of the current arrangements in terms of providing security of supply, the level and trends in prices, opportunities for demand-side participation, and the level of competition.

Five key areas of concern were identified:

  • Pricing and competition (especially in the retail market);
  • Energy affordability issues; 
  • The effectiveness of the energy-only spot market design; 
  • Demand-side participation; and
  • Availability of market information.

In July 2008, the Commission released an Options Paper for consultation, which presented possible options for addressing concerns identified in the Issues Paper, and proposed future actions.

The recommendations concerning improving electricity market performance that came out of the Market Design Review project have now been integrated with other priority projects under the Market Development Programme.

Further information about the Market Design Review

Issues Paper consultation

Submissions were sought for the consultation. The closing date for submissions was 20 July 2007 after an extension of time to allow time for the Commission to host public briefing sessions on the information contained within the issues paper.

Issues Paper public briefings

Public briefings were held in Wellington and Auckland during July 2007. The objective of the public briefings was to present the information contained within the issues paper in advance of respondents finalising their written submissions to the Commission. Questions and comments will be encouraged during the briefing sessions.

As is the case with the issues paper, the briefings focused on identifying problems with the wholesale and retail markets and not on solutions. All interested parties will have the opportunity to suggest and comment on solutions at a later stage of the project.

Issues Paper update reports

The Commission has prepared a Market Design Review - Update Report, dated 4 October 2007. This report presents:

  • the Commission’s initial views on the areas where improvements might be possible to the current design of the electricity market; and
  • the broad direction of work that the Commission intends to pursue in the next stage of the Market Design Review
Report - 4 October 2007 pdf [208 KB]

Options Paper consultation

Submissions were sought for the consultation. The closing date for submissions was 1 September 2008.

Public briefing - Market Design Review: Options paper

The Commission held a public briefing on the morning of Tuesday 12 August 2008 in Wellington. The objective of the public briefing was to present the information contained within the Options paper in advance of respondents finalising their written submissions to the Commission.

Options Paper Data

A number of interested parties have requested the data used to derive the graphs and figures withing the Market Design Review: Options Paper. This information is published below. The Commission is not seeking feedback on this information.

Please note that this information has not been updated since the release of the Options Paper in July 2008.

Retail Model

The Retail Model (spreadsheet) used to derive the graphs within chapter 3 "Competition and pricing issues" of the Market Design Review: Options Paper is available for download.


There are a number of important caveats described below that parties should be aware of before downloading and utilising information contained in the Retail Model:

  • The Retail Model has been amended to remove or replace information provided to the Electricity Commission in confidence. Therefore, some of the graphs and analysis will not exactly match the information presented within the Options Paper. More information on the effects of removing confidential data is provided within the Retail Model itself.
  • The Retail Model was developed to be a working tool rather than for general use. Accordingly, the Retail Model is not user-friendly and assumes the user has a high degree of understanding of both the underlying issues, and spreadsheet and visual basic coding.


Given the caveats outlined above, no representations are made as to the accuracy of the Retail Model, and the Commission and its advisors cannot be held liable for the consequences of any decisions made by parties using the Retail Model and/or the information within it. 

Estimated Whirinaki market price impact spreadsheet

The spreadsheet used to estimate Whirinaki market price impact (Figure 88) within the Market Design Review: Options Paper is available for download.


Please note that the spreadsheet has been developed using Microsoft Excel 2007. The spreadsheet may not work with older versions of Excel, some data may be truncated as a result.

The spreadsheet was developed to be a working tool rather than for general use. Accordingly, the spreadsheet may not be user-friendly and assumes the user has a high degree of understanding of the underlying issues.

Given the caveats outlined above, no representations are made as to the accuracy of the spreadsheet, and the Commission and its advisors cannot be held liable for the consequences of any decisions made by parties using the spreadsheet and/or the information within it. 

Energy consumption data used in the Options paper analysis

The underlying data used to produce charts showing change in retailers' share of customers (charts in Figures 71-84) within the Market Design Review: Options Paper is available for download.

The zip file contains the following four .csv files

  1. active_icps.csv - shows how many ICPs were registered against each retailer at each network supply point for each month.
  2. gd_consumption_gwh.csv - shows grid connected purchases (GWh) by each retailer at each network supply point for each month
  3. halfhourly_consumption_gwh.csv - shows consumption (GWh) from customers with TOU meters connected to a distribution network at each network supply point for each month
  4. non_halfhourly_consumption_gwh.csv - consumption (GWh) from customers connected to a distribution network whose electricity has been purchased through the use of profiles at each network supply point for each month


Please note that some spreadsheets contain more than 65536 rows.

Energy Poverty Data

The Energy Poverty Data (spreadsheet) used to derive figures 33-36 in the Market Design Review: Options Paper is available for download.

Long Run Marginal Cost (LRMC) Data

The LRMC Data (spreadsheet) used to derive figure 7 in the Market Design Review: Options Paper is available for download.

 

Related work being carried out by the Commission

The Commission is carrying out ongoing development work across security of supply, wholesale, retail, and common quality and system operation workstreams.  Some key related projects are:

Useful background to the review
Last update on 12 June 2009 04:49 PM