MCY Mercury NZ ( MRP Mighty River Power)

[percy]

I suspect the answer is, no one company gets the best of any other company over the longer term, all things being equal. But because all of our electricity companies have their own generating profiles most can influence the market for power by turning peaking power stations on and off, and in the case of MRP switching between Geothermal and Hydro to take best advantage of the water storage conditions. Lastly, some power generating companies have more power station capacity to turn on and off than others.

So despite what I said in line one of this post, all things may not be equal!

SNOOPY

A very nice little [or huge] earner if you never have to deliver the power you have sold ?
Just need the knowledge that you could deliver?
Bit like banks playing the foreign exchange markets.
NB.The future markets trade approx one hundred times [or more] than the physical market worldwide,so all things are not equal.!!! lol.

[Snoopy]

A very nice little [or huge] earner if you never have to deliver the power you have sold ?
Just need the knowledge that you could deliver?

I think if you were a 'rogue trader' of power, the energy companies could change the market and kill you off.

Bit like banks playing the foreign exchange markets.
NB.The future markets trade approx one hundred times [or more] than the physical market worldwide.

Not for power though?

SNOOPY

[sharer]

So I must ask the question;Which power company has the best traders? Does that energy company make more out of trading, than generating the power? A few years ago I noticed Trust Power sold a great deal more power than they generated.

I think the answer might be Meridian. I also noticed Trust Power Percy. These points partly explain why MelCA and IFT are amongst the small number held at >5% in my portfolio.
But my own analytical abilities are very limited, and my capacity to sit up at the computer is declining. So this can only be an opinion, and i shan't hesitate to dump present favorites if future facts on actual performance seems to be proving me wrong. As an ordinary investor i can't spend all day trying to analyze everything that is hard.

[percy]

I think the answer might be Meridian. I also noticed Trust Power Percy. These points partly explain why MelCA and IFT are amongst the small number held at >5% in my portfolio.
But my own analytical abilities are very limited, and my capacity to sit up at the computer is declining. So this can only be an opinion, and i shan't hesitate to dump present favorites if future facts on actual performance seems to be proving me wrong. As an ordinary investor i can't spend all day trying to analyze everything that is hard.

It is in the too hard basket for me too.!!
Yet we as investors must be aware of it.
I tried to figure it out with CEN and TPW a few years ago and couldn't,yet came away from the exercise thinking TPW had the best traders.!!!,how much they earnt for TPW,I had no idea.

[percy]

I think if you were a 'rogue trader' of power, the energy companies could change the market and kill you off.



Not for power though?

SNOOPY

The power companies would not kill off their own traders.!!
Pork bellies,oil,wheat,silver,gold,power.All have markets.All traded.

[Snow Leopard]

I kind of gain the impression that some people have gained the wrong impression of the electricity market, possibly as a result of an interpretation of something I wrote. Sorry.

It is not a speculative market, it is a highly regulated market and bids and offers are not being made and pulled in the blink of an eye.

Everybody knows a couple of hours in advance how much electricity they will need to actually produce from each of their generation assets.

Best Wishes
Paper Tiger

Attachment 5781
Source: http://www.emi.ea.govt.nz/

[fish]

[QUOTE=Snoopy;478831]I suspect the answer is, no one company gets the best of any other company over the longer term, all things being equal. But because all of our electricity companies have their own generating profiles most can influence the market for power by turning peaking power stations on and off, and in the case of MRP switching between Geothermal and Hydro to take best advantage of the water storage conditions. Lastly, some power generating companies have more power station capacity to turn on and off than others.

So despite what I said in line one of this post, all things may not be equal!

The system is evolving and working well and we havnt seen the massive spikes in prices that happened in previous years.
As a consequence mrp is coping well in this drought year-far better than I predicted..
As long as labour/Green can be kept out it looks like the future for delivering stable,competitively priced electricity will be bright for decades to come

[percy]

I kind of gain the impression that some people have gained the wrong impression of the electricity market, possibly as a result of an interpretation of something I wrote. Sorry.

It is not a speculative market, it is a highly regulated market and bids and offers are not being made and pulled in the blink of an eye.

Everybody knows a couple of hours in advance how much electricity they will need to actually produce from each of their generation assets.

Best Wishes
Paper Tiger

Attachment 5781
Source: http://www.emi.ea.govt.nz/

Thank you for the links.
First word I saw was competitive.!!!!
As always happens in any highly regulated,full disclosure competive market [competition] there are winners and losers.
I guess the NZX could be described in similar terms,and there are winners and losers there every day.

[Snoopy]

So I must ask the question;Which power company has the best traders? Does that energy company make more out of trading, than generating the power?
A few years ago I noticed Trust Power sold a great deal more power than they generated.

I think you need to specify whether you are talking about a period of short term uncertainty , or something over a whole year. And the question is not whether a company sold more power than it generated, but whether it sold more power than it could generate. Buying power on market when it is for sale at below your own generating cost is logical and sensible.

But when you buy more power on market and you have more customers demand than you can generate for, that to me is a recipe for trouble. Transalta was killed off in New Zealand doing just that.

SNOOPY

[percy]

I am thinking more of something over a whole year,or years.Bit like the sharemarket where some do well while others don't.
I am certainly thinking of buying power on market when it is for sale at below your generating costs.
We see successful traders in any competitive market,but we have no idea which NZ power company has the top trader/traders.On the sharemarket we can see who the clever fund managers are,but we can not see who the sussesful EMI traders are.
May show up in some annual report as a staff member earning more than the CEO,then again it may not?
I do not have any answers as I have neither seen mention in any annual report of what I am questioning.
I did ask a Craig's analyst at a MRP presentation if he had any idea who or any if any company were making good profits from trading?After he got rid of the look of surprise he answered,that he did not think so.Did not seem to have much comfiction in his voice.!!!
You never know we may see a power company announce an earnings downgrade as a result of trading losses from EMI market.
There is more to generating and selling power,and that is trading it.