March 28 2012
Categorized Under: Genesis Energy, Mercury Energy, Meridian Energy, Mighty River Power, Power News, Power Prices, Steam Power, Switchme News, renewable energy
North Island weather has helped to increase Mighty River Power’s earnings by 14 per cent in the first half of the year, enabling the state owned company which is soon to be privatised, to raise its forecast earnings for the full year.
The power company reported an underlying after tax net profit of $101.7 million for the six months to December 31, increased from $89.4 million in the previous period, despite a fall in national power consumption.
Mighty River Power, who retails electricity as Mercury Energy said the fall was caused by non cash market to market movements in the value of its derivative financial instruments during the half year, caused by the global fall in longer term wholesale interest rates. The company’s underlying profits removed these effects.
The better outlook is a result of strong generation and high wholesale prices in recent months.
While a lack of rainfall during the summer, drained South Island hydro storage, pushing up wholesale electricity prices, strong inflow into Lake Taupo, the main water source for Mighty River Power’s hydro assets allowed for higher production.
The average wholesale price was one third higher than it was a year ago as the company used Southdown, it’s gas fired plant to take advantage of the wholesale price spikes.
The high turnover of retail customers saw Mercury Energy’s customer base shrink by 19,000 customers although sales volumes still increased to 2.55 gigawatt hours as the company fought hard to keep larger more profitable customers.
At present, most of the company’s electricity comes from its hydro assets, Mighty River is focusing its future on geothermal developments both nationally and internationally and is currently conducting exploratory drilling in Chile.
Chairwoman Joan Withers said geothermal production would transform the business.
“It’s a game changer for us. Reliable baseload geothermal capacity has significantly expanded and diversified our electricity production from renewable low cost fuels.
From 2013, 40 per cent of the companies generation will come from geothermal sources. As well as being renewable, it is not dependant on the weather like hydro and wind generation.
Mighty River Power is the first state owned enterprise to be partially privatised, with power companies Meridian Energy and Genesis Energy also on the list for the mixed ownership model.
Source: www.nzherald.co.nz www.stuff.co.nz
December 15 2011
Categorized Under: Genesis Energy, Mercury Energy, Meridian Energy, Mighty River Power, Power News, Switchme News
New Zealand owned power company Mercury Energy will be the first state owned enterprise to be privatised in the government’s plans to sell minority stakes in five SOE’s over the next three years.
Mighty River Power which trades as Mercury Energy in the electricity retail market has been considered as the most ready for sale of up to 49 per cent of its shares which will be sold on an open market. The government will remain with a minimum 51 per cent controlling stake.
Finance minister Bill English and SOE Minister Tony Ryall assured Kiwi’s that the part-sale would put New Zealanders “at the front of the queue” for share allocations and that no single share holder other than the government would be allowed to own more that 10 per cent of any of the companies that will be put up for sale.
They gave no clues as to which state owned company would be the next on the list for part privatisation, but have identified Meridian Energy and Genesis Energy, along with coal mining company Solid Energy and airline Air New Zealand as prime candidates for sale.
The timing of the sales will depend on market conditions and company circumstances the ministers advised.
Ryall has stated that the government will probably stump up around $100 million in fees to investment banks preparing the partial sell-down of the New Zealand owned power companies.
In a media briefing in Wellington he spoke about the mixed ownership model being a “very very big programme’ but he wouldn’t expect to pay hundreds of millions of dollars for it. It would be “more around $100 million”. That would work out to be around 1.8 per cent of the sale price, which is in line with the costs relating to the privatisation of Contact Energy in 1999.
Ryall had told Parliament’s Commerce Select Committee the Treasury’s range of fees would be between 2 and 9 per cent at the higher end of the scale. Treasury officials expect that Mighty River Power could raise as much as $1.8 Million.
Bill English talked down the threat to the programme caused by volatile financial markets, saying the prospect of a steady return from utility companies was more attractive that other investment opportunities, and is a better method of clamping down on new government debt.
If you’re with Mercury Energy, now would be a good time to do an energy comparison and find a better deal. You will find a cheaper power company!
Finance Minister Bill English announces first SOE sale...
September 26 2011
Categorized Under: Energy Online, Genesis Energy, Mercury Energy, Meridian Energy, Mighty River Power, Power Consumer News, Powershop, Switchme News
The most extreme and generous discount available to electricity consumers has stopped the large numbers of customers leaving Contact Energy, but the new incentive could be costing the company around $14m a year.
Contact Energy have previously offered a 12% prompt payment discount but with the On-line On-time offer it has raised to 22% but only where bills are able to be sent via email, and paid via electronic methods. The reason for the increased discount is that Contact lost some 15,000 customers in the first two months of an Electricity Authority campaign which encourages consumers to compare and switch their power companies.
Despite the implementation of the discount, Contact lost a total of 413 customers for the month of August, but that was still a dramatic improvement from the previous two months where there was an average of 7,679 customers lost.
Electricity experts have been surprised by the offer from Contact which has been currently extended to its existing customer base and has been extensively advertised which ensures that the uptake is going to be extremely high which is believed to leave Contact with marginal if any profit on its electricity sales.
Contacts chief executive Dennis Barnes said the company expected a 3 per rise on the mass market revenue and that the 20 per cent of customers already eligible for this offer were expected to rise to 40 per cent as consumers were switched to the On-line On-time offer.
The biggest customer losses in August went to Mercury’s parent company Mighty River Power who lost over 3,000 customers which was more than the previous two months combined.
TrustPower, which like Contact has always been on the higher end of the published tariffs lost 814 consumers.
The winners of the consumer base were Genesis Energy with their online brand Energy Online who gained 947 and Meridian along with their online brand Powershop gained 2,998 customers.
June 16 2011
Categorized Under: Contact Energy, Mighty River Power, Power News, Steam Power
Iceland says it will send its biggest rig to New Zealand once it signs a three billion Icelandic krona ($NZ32.09 million) contract to begin drilling in the Ngatamariki geothermal steam field which is located 17 km northeast of Lake Taupo.
The steam fields will supply a new 82 MW electricity plant, the Icelandic Review magazine reported on its website.
Iceland’s largest drilling rig will be sent to Taupo with between 30 and 40 experts from Jardboranir for the two-year contract, which is expected to be signed later this month.
Mighty River Power today confirmed a further expansion of the company’s generation portfolio in New Zealand, with a NZ$466 million geothermal plant at Ngatamariki geothermal steam field.
Mighty River Power’s General Manager Development, Mark Trigg, said the new geothermal plant would provide extra reliable, renewable capacity and further diversify Mighty River Power’s generation portfolio.
The development, which follows the commissioning of projects Kawerau in 2008 and Nga Awa Purua in 2010, will assist to lift Mighty River Power’s geothermal energy generation from over 30% to more than 40% of the Company’s generation output, and lift the total geothermal capacity under its operation to above 460MW.
It has been reported that the geothermal power plant project by Contact Energy at Taupo estimated at a NZ$1 billion price tag, has also been granted resource consent.
The 250MW of renewable energy generated that will be added to the national grid, is sufficient to power more than 200,000 homes or the equivalent of Hamilton.
New Zealand is committed to the generation of renewable power and the use of natural resources within the country, this is reflected in the many projects on the pipeline of the power industry.
Sources – thinkgeoenergy.com , The National Business Review & Mightyriverpower.co.nz