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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

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