Meridian posts $84 million profit despite winter

Meridian posts $84 million profit despite winter 2001

State-owned electricity generator and retailer Meridian Energy has posted a profit of $84 million for the year ended June 30, despite the difficulties of the record dry winter of 2001.

Releasing the company’s annual report today, Chairman Dr Francis Small and CEO Dr Keith Turner said while the result was down on its target of $124 million, it had been achieved in the face of exceptional challenges.

“Inflows into the Waitaki catchment earlier in 2001 were the lowest in 75 years of data collection records, which meant we began the financial year with a severe shortage of water.

“This required very sensitive management both on our generation side and in terms of reducing demand in order to avoid serious economic repercussions on the country as a whole. While the country got through this extreme condition with only minimal impact, it was an expensive exercise for Meridian Energy. At times we were buying power in excess of $250 per MWh from the spot market in order to deliver on contract obligations at $50 per MWh.

“The profit we achieved represents a very strong performance given the conditions in which we were operating.”

Dr Small says the year saw major changes to the shape of Meridian, with the company successfully completing the transition of the 116,000 South Island retail customers purchased from the former On energy to its enlarged customer contact centre in Christchurch.

“From the customers’ perspective this was a seamless operation, and its success was reflected in its nomination as a finalist for an industry award for the most successful project implementation.”

Dr Turner confirmed that the company was now delivering a high standard of service to its customers as measured by independent surveys, but there was still room for improvement.

Other highlights for the company during the year were the commissioning of the massive second Manapouri tailrace tunnel project, the settlement of the long-running dispute with national grid operator Transpower over charges for the use of the Cook Strait cable, and the success of its Australian investment, the long-term value of which had been boosted significantly by renewable energy certificates and renegotiation of pricing.

Generating Assets

Waitaki River system

The Upper Waitaki system begins at Lake Tekapo, a storage lake with about 800 GWh of storage capacity, which represents about 22 percent of the country’s hydro storage.

Water passes through the Tekapo A power station and is diverted by a purpose-built hydro canal to Tekapo B station on the shores of Lake Pukaki.

Lake Pukaki has some 1600 GWh of storage capacity – about 44 percent of New Zealand’s total. Water is drawn by canal from both Lakes Pukaki and Ohau to supply Ohau A , B and C power stations, before being discharged into Lake Benmore.

After passing through the Benmore power station, the water flows down the Waitaki River through the Aviemore and Waitaki stations.

Manapouri/Te Anau system

The combined storage of Lakes Te Anau and Manapouri is 380 GWh. The Manapouri power station lies 178m underground on the western shore of Lake Manapouri, and is accessed via a 2km road tunnel.

After passing through the station the water flows into Doubtful Sound via two 10km-long tailrace tunnels.

All of the stations are designed to be remote controlled from a control centre at Twizel.

Australia

Meridian Energy Australia Ltd owns hydro generation facilities at five small dams in New South Wales and Victoria, generating a total of 62 MW.

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