How the electricity industry works

You have the choice to choose your energy retailer. No matter who your provider is its all the same electricity. All electricity generators sell their power to the NZ wholesale market and all retailers buy from the wholesale market to sell to businesses and residential consumers.

 

There's no downside to changing providers


First, retailers all have access to the same electricity you don't have to worry about your electricity provider running out of power.

Secondly, your retailer has to work hard to earn and keep your business - you have options and retailers are all selling the same electricity. That means it's the price and service they provide to you that becomes important.

Here's how electricity gets to your premises

 


Use the toggles above to learn more about the electricity industry


Power Stations

Generation companies own and operate power stations across the country. Around 40 power stations supply electricity to the national grid, although the bulk of our power is produced by the 5 largest generators. About 60% of New Zealand's electricity is generated by hydro stations, with the balance from geothermal stations, gas, coal and oil-fired thermal stations, bio-mass plants and wind farms.


Opunake Hydro Limited, a partner of Utilise is one of these companies generating power for the New Zealand electricity market.


Transpower

Transpower transmits the generated power through the national grid to your local lines company.


Distribution

Your local lines company then distributes power to your premises.


Retail

Electricity retailers sell the power to the end consumer and business. Your invoice will include generation, transmission, lines and retail services.

Electricity retailers can provide price stability

 

Electricity wholesale prices fluctuate with supply and demand.

The sale and purchase of electricity between generators and retailers is carried out in the wholesale electricity spot market, where generators offer electricity to the market and retailers bid to buy the electricity.

Prices fluctuate with supply and demand. At different times of the day demand can be high, this is typically late afternoon and early evening when consumers start to cook, and turn on lights and heaters at the end of the day. Likewise when demand is low (like overnight) the spot prices drop. 

Electricity supply can change with climate conditions. The amount of electricity being generated, such as in periods of drought or snow, can reduce the amount of power generated. We see this reflected in the spot prices. 

Electricity retailers can provide businesses and consumers with price stability by purchasing hedge contracts.

Price fluctuation through the day




Price fluctuation through the week






Price fluctuation through the seasons




Electricity Prices

Electricity retailers provide a single bill which incorporates all these charges. 


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The cost of energy

– the cost of purchasing off the spot market 

 The cost of transmission and distribution

– this is represented by 
your network charges on 
your bill

 The cost to serve 

- sales, metering, billing 
and back office costs


Most consumers ask retailers like Utilise to sell to them at fixed prices so they don’t have to worry about spot market price fluctuations. 

What are power outages all about?



We've all heard or experienced the frustration of a power outage and in most cases it is caused by damage to the lines in your local area. In these instances it's the local lines company rather than your retailer who needs to be contacted to resolve the issue.