9. How do I calculate contract price?
The contract price only needs to be disclosed for physical
contracts (FPVV and FPFV) and CfD contracts with terms of less than ten
years.
In order to compare prices between CfDs and physical contracts Participants will be able to use a loss
adjustment factor (LAF) of 0.937 for physical contracts. For
contracts which exclude losses a LAF of 1 can be used.
All contracts that contain a profile will be presented
as time-weighted averages. If a contract contains an adjustment clause, only
the starting price needs to be disclosed.
The contract price is calculated using the following
formula:
CP =
|
{
|
n
∑ Pi
x TPi
i=1
n
∑ TPi
i=1
|
}
|
/ LF x LAF
|
Where:
CP means the contract price
n means the number of different prices within the contract
Pi means a price specified
in the contract (for contracts with an adjustment clause it is a
starting price)
TPi means the number of trading periods during which each price in the
contract applies
LF means the location factor for the node at which the price
is set in the contract, as published by the Board in accordance
with rule 5
LAF means a loss adjustment
factor which is:
(a) if the
contract
price for
the contract is referenced to a
point of
connection on the grid, 1; or
(b) for all other contracts, 0.937 (being the difference
between 1 and the loss factor of 0.063).
The following worked examples illustrate how the
contract price can be calculated:
1.
A profiled CfD contract which is $60/MW at peak for 32 trading periods and $30/MW off
peak for 16 trading periods. The load during peak periods is 4MW and during
off peak periods is 2MW. The contract was struck at ALB0331 in Northland which
has a mean location factor of 1.07. The contract price for this contract would
be calculated as follows:
CP= {(32 trading periods at $60+16 trading
periods at $30)/48 trading periods}/ a location factor of 1.07
CP= $46.73
2.
An FPVV contract which
is $72/MW at peak for 32 trading periods and $36/MW off peak for 16 trading
periods. The contract was struck at WRK0331 in Edgecumbe which has a mean
location factor of 1.01. The contract price for this contract would be calculated
as follows:
CP= {(32 trading periods at $72 + 16
trading periods at $36)/48 trading periods}/a location factor of 1.01* an LAF of 0.937 for a physical contract
CP= $63.40
3.
An FPVV contract which
is $56/MW at peak for 32 trading periods only. The contract was struck at ROX1101
in Southland which has a mean location factor of 0.93. The contract price for
this contract would be calculated as follows:
CP= {(32 trading periods at $56)/32 trading
periods}/ a location factor of 0.93 * an LAF
of 0.937 for a physical contract
CP= $64.26
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