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Geoffonomics: The price of clean, green electricity

Gareth MorganEconomics, Environment4 Comments

Every fortnight Geoff Simmons talks with Jesse Mulligan on RNZ’s Afternoons programme about a variety of economic issues

This week they cover the economics of renewable energy

www.rnz.co.nz/jesse #geoffonomics

Geoffonomics: The price of clean, green electricity was last modified: July 16th, 2016 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.

4 Comments on “Geoffonomics: The price of clean, green electricity”

  1. So people understand what you are talking about the price of electricity in the evening mid winter, on 2 Jun 5.30 to 6.00 pm the spot price that generators were getting for electricity was $4 per kWh. The average price for the week ending 2 July was 5 c ($0.05) per kWh with a peak of $0.26 (at Kaikohe) and a trough of $0.00 (yip free) at the Waitaki node. Both of these (high and low) were on the same day (27 Jun) (https://www.energylink.co.nz/sites/default/files/Energy_Trendz_Weekly_16-07-03-Issue_999.pdf) (note these prices are $ / megaWhr) 1 mWh = 1000kWh

    A few other things to note from that webpage. The super low price was in the first 1/2 hour of the day – ie midnight to 12.30, and the highest for that week was for the 37th 1/2 hour = 6.30 to 7.00 in the evening.

    Wholesale buyers and sellers of electricity are exposed to huge variation in the price of the commodity traded – 100 fold at the extremes, regularly 5 fold differences. This price diferrential is not transferred in any way to the majority of customers – at least in the domestic and commercial markets, and only much watered down for yourself!
    Generators of electricty from solar panels on the house roof should not (IMHO) expect to receive anything more than the average price paid by lines companies – c 7 – 8 c / kWh unless they are prepared to sell on the spot price

    Without automated control I would not want to be exposed to spot prices.

    Finally it is worth noting that if predicted generators a start up gas fired generation to sell at the high price but even this takes time. See this post for expert commentary:

    https://www.energylink.co.nz/news/blog/4-kwh-sign-things-come

  2. the problem is not the energy, but the quality of the homes built in NZ…I can get thru winter with 3Kw solar system, because my home is highly efficient

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