Behind the ASX Futures market, an over-the-counter (OTC) and physical spot market operates within the NZ Electricity Market itself. Buying and selling within NZEM requires a more in depth understanding of the market rules and supply-demand dynamics. The Futures market is a means of smoothing physical market volatility into more stable Monthly, Quarterly and Annual prices for 1MW products.
For larger customers working with Pioneer on bundled heat, power and energy services requiring investment in plant, the ASX Futures market can provide a very useful independent market price and price spread for indexation and escalation of longer term supply agreements.
For suppliers to Pioneer of small generation power agreements, the ASX can be utilised in the same way to reference supplier prices to the market base fixed price, fixed volume product index.
For Pioneer investment partners, in either generation or retail sales channels, the wholesale market can be accessed through Pioneer's wholesale services covering credit needs, prudential, margin calls and brokering services.
Pioneer Energy has the market capability to offer Power Purchase Agreements (PPAs). Power purchase agreements allows one party with available generation to make generation available to another party.
The benefits of this type of arrangement helps avoid the building of new plant and the competitive nature of these agreements can help keep the cost of power plant and electricity lower.
Pioneer Energy is involved in a number of both in-take and off-take PPAs which provide advantages of:
No upfront capital cost
Predictable energy pricing
No system performance or operating risk
Projects that can be cash flow positive from day one