Market impact assessment from changes to HVDC cost allocation

The methodology to allocate the HVDC costs to South Island (SI) generators was changed in 2015. This change involved transitioning from the peak-based metric (HAMI) to an average-based metric (SIMI) from the 2017/18 pricing year (PY). The allocation based on HAMI resulted in a strong incentive for SI generators to maintain generation below established HAMI levels (HAMI limits) thus avoiding increased allocation of HVDC costs. The change to SIMI was intended to reduce this incentive, thus increasing the availability of SI generation capacity.

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