​Concept has been providing electricity, gas, and carbon market forecasting services to clients on a bespoke basis for over fifteen years – generally in support of major investments or acquisitions.

However, after receiving an ever-growing number of requests from clients who want forecasts at short-notice, we’ve invested in the capability to produce regular price forecasts – available for purchase on a subscription basis, or as one-offs.

In addition to these standard products, we are also still providing bespoke market forecasting services to clients who wish to examine particular projects or scenarios in more detail.
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If you are interested in any of these services please contact the following:
·       Electricity: Dave Weaver or Simon Coates
·       Gas: Simon Coates or Dave Weaver
·       Carbon: Simon Coates or Yvonne Matthews

Electricity Forecasts

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Concept uses its proprietary New Zealand electricity market model, ‘ORC’, to forecast electricity prices from 2025 to 2047.  This modelling produces

• Annual average prices
• Quarterly prices
• Daily intraday prices (we model 8,760 fully chronological hourly steps, rather than using within-day or within-week load blocks)
• Price duration data
• Capture rates (generation weighted - time weighted average price ratios) for different technologies (wind, solar, geothermal, etc.).

Our modelling incorporates:

• 43 possible “weather years” using fully coincident combinations of historical hydro inflows, wind, sunshine, and demand levels
• Interisland HVDC flow limits and reserves constraints
• “Slow start” thermal plant operating constraints
• Dynamically created water value curves for each future system state
• Estimations of real-world inaccuracies in peak demand and renewable generation output forecasting
• Simulated plant outages
• Grid batteries and EV charging patterns
• A detailed gas supply model, capturing the effects of gas storage and flexibility from major users and gas fields
• Concept’s proprietary view of the generation development pipeline and electricity demand outlook.

Our price forecasts are revised quarterly. Subscription customers receive a written report each quarter with access to an online dashboard which allows downloads of forecast data.  You can see a video demonstrating this dashboard to the right. Customers can request additional modelling output data, sensitivity analyses and new scenarios. Alternatively, non-subscription customers can make one-off purchases of our latest report and (time-limited) dashboard access.
Purchasers of the report are also entitled to a 1-hour session with the report’s authors to discuss the projections.  ​

Gas forecasts

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In late Winter ’24 Concept produced its inaugural gas market report.  Currently, the plan is for Gas market reports to be produced annually, shortly after MBIE’s release of the information disclosures from the upstream operators of the gas fields.
The 2024 report covered:

• How have we got here? Analysis on the drivers behind the Winter ‘24 situation, including:
  • upstream parties’ investment in drilling campaigns and the associated success/failure, and
  • how much the current gas delivery and medium-term outlook is different to the projections made by upstream parties at the start of 2022.
• What is the outlook for gas supply from current fields in the short-medium-and long-term?
  •  Field-by-field analysis of potential future drilling campaigns and associated deliverability from the 'big-6' fields.
  • The level of investment required for the drilling, as well as the outcomes if there were no further drilling
• What is the supply/demand balance in the short-to-medium term? This details monthly projections of potential gas field deliverability, and compares with projections of gas demand from the various sectors. The sectoral analysis looks at issues associated with thermal generation (dry/wet issues, plus Huntly coal), as well as the effect of Methanex demand.
• What is the potential for additional sources of gas supply?
  • New gas fields.  How likely are they; when and what could they potentially bring?
  • LNG. What is the likely cost, what are its emissions implications, and how does it compare with alternatives?
• What about Methanex?
  • What are the economics of using gas to make methanol versus using it for power generation or industrial process heat?
  • What would be the implications of Methanex permanently shutting its remaining Motunui train for the long-term gas market outlook?
• What might the long-term future hold?
  • Modelling of gas supply / demand and price outcomes out to 2050. The modelling looks at different combinations of scenarios of gas supply availability (from existing fields, plus scenarios of potential new fields), carbon prices faced by NZ participants, and LNG prices.
  • The modelling calculates gas prices based on the fundamental economics of gas supply and the cost of using gas versus alternatives for the various consumer segments.
  • It dynamically models petrochemical exit decisions, fuel choice decisions for the different residential, commercial, and industrial consumers; the extent of build of renewable energy to displace thermal generation, the coal/gas fuel choice for Huntly and the extent to which Huntly on coal may displace gas-fired power stations.

Purchasers of the report are also entitled to a 1-hour session with the report’s authors to discuss the projections. 
In addition to this standard market forecast, Concept has provided a variety of other bespoke forecasts on gas market issues for clients including:

• The economics of existing and potential new gas storage facilities.
• Forecasts of gas pipeline economics and the effect of declining gas. volumes on consumer prices.

• LPG market forecasts.

Carbon price forecasts

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Concept produces carbon price projections using its whole-economy model, ‘ENZ’ – Emissions-Economy New Zealand.

ENZ is a comprehensive tool designed to project and analyse the economic and greenhouse gas emissions outcomes for the different sectors of the New Zealand economy.  Covering sectors from land use and waste, to transport and industrial heat, ENZ models the interplay between emissions-producing decisions—such as land-use changes, technology adoption, and energy demand—and external drivers like commodity prices and policy settings.  The model integrates feedback loops between economic activities and emissions, using a dynamic, recursive approach.  It provides insights up to 2075, accounting for long-term policies such as New Zealand’s net-zero 2050 goals.

ENZ has been used extensively to provide analysis and insights to government agencies and market participants on a range of issues, including policy evaluation and market forecasting – not just for emissions but also for the electricity, gas, and forestry sectors.

Our price forecasts are revised quarterly and come with an associated report that details the key issues driving outcomes, including any deep dive analysis of a particular topic of relevance for that quarter.  Purchasers of the report are also entitled to a 1-hour session with the report’s authors to discuss the projections. 
The report is available on a four-quarter subscription basis, or parties can make one-off purchases.
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How ENZ works
When ENZ is run to model the ETS, it progressively calculates for each future year:

• The demand for NZUs – being the emissions from activities covered by the ETS, plus any forestry-related surrenders for deforestation or harvesting of forests that use the stock-change accounting approach.
• The supply of NZUs – being the projected units supplied from Industrial Allocation, Forestry removals, and – if the carbon price is higher than the auction reserve price – the auction volumes that are available for that year.
•  The decisions made by decision-makers in response to the price signals they are facing, including the carbon price and other commodity and technology prices.  Examples include:
  • households deciding on an EV or ICE vehicle, or whether to switch from gas heating;
  • businesses deciding whether to switch away from fossil fuelled industrial boiler heat or (in the case of petrochemicals) whether to exit New Zealand;
  • electricity generators deciding whether to build renewable stations to displace fossil stations, or choose between coal and gas to fuel fossil stations;
  • landowners deciding whether to convert land from pastoral farming to forestry, or whether to implement agricultural emissions mitigation technologies.

The inherent challenge for this modelling is the strong inter-temporal dynamic for carbon price outcomes: decisions made in a year will have flow-on effects for subsequent years, plus decisions made in any year will be based on expectations of prices for future years.  To address this, Concept has developed an iterative algorithm that solves for the carbon price trajectory that delivers the modelling objective – which, for modelling the ETS, is for the NZU stockpile to remain broadly stable at moderate levels.
Concept’s carbon price projections model this dynamic and explore the variation in price outcomes arising from potential variations in future policy settings and ‘states-of-the-world’ (eg, future land sector commodity prices).