Genesis Energy Limited announces timetable to end coal-fired generation in New Zealand
Genesis Energy announced today that its last two coal-burning electricity generators at the Huntly Power Station will be
permanently withdrawn from the market by December 2018, signaling the end of large scale coal-fired generation, and
associated carbon emissions, in New Zealand.
Genesis Energy Chairman Dame Jenny Shipley said, “While the Huntly Power Station has been, and remains, a great asset
for Genesis Energy, the Board has taken the decision to retire the remaining Rankine Units. New Zealand’s changing
electricity market has seen improvements in the management of dry year events, along with a significant decrease in
coal-fired generation, and by 2018 the two coal units will no longer be required unless market conditions change
Chief Executive Albert Brantley said the Company has been on track to retire the four coal/gas fired Rankine units since
“The development of lower cost renewable generation, principally wind and geothermal, investment in the HVDC link, and
relatively flat growth in consumer and industrial demand for electricity have combined to reinforce the decision to
retire the remaining Rankine units, which will deliver further operational efficiencies to Genesis Energy,” he said.
Electricity generation will continue at the Huntly site for years to come from the two existing gas-fuelled units, the
high efficiency 400MW Unit 5, and the smaller 50 MW open cycle Unit 6. In addition, the site remains extremely well
positioned to develop additional thermal peaking capacity, should that be required in the future.
“The decision to close the Rankines has been taken after significant assessment of the Company’s generation position,
our ability to meet our ongoing commitments to our customers, and the impact on our loyal employees who have skillfully
run these units for many years, as well as external stakeholders. These units have largely been operating at the margin
of the market for a number of years, at very low utilisation rates. We expect this decision to produce operational and
capital cost savings of approximately $20 to $25 million per annum,” Mr Brantley said.
The closure will have a positive impact on overall CO2 emissions in New Zealand, moving the New Zealand electricity
generation sector closer to its 90% renewable target. At their peak, the units emitted around 5,000 kilotonnes (kt) of
CO2 per year – amounting to around 5% of New Zealand’s total greenhouse gas emissions.
With decreased utilisation of the Rankine units, and recent commissioning of more efficient gas generation on site,
carbon emissions at Huntly dropped to around 2,300kt in the 2015 financial year, and will drop significantly after 2018.
Genesis Energy’s coal supply contract with Solid Energy expires in June 2017. With around 700,000 tonnes of coal in its
own stockpiles, ongoing coal deliveries until June 2017 and ample supplies of natural gas, Genesis Energy has no fuel
availability issues at the Station. The two units will continue to burn scheduled coal deliveries and coal stockpiled at
the Station until coal is exhausted and will then operate solely on gas, if required, for the remainder of their