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Meridian Energy releases half-year result

Meridian Energy releases half-year result

State-owned electricity generator and retailer Meridian Energy has reported a profit of $83 million for the half-year ended 31 December, 2002.

The result compares with a profit of $30 million for the same period the previous year, and a profit of $84 million for the full year ended June 2002.

However, those results were severely impacted by the dry winter of 2001 and costs associated with acquisition of customers from On Energy.

Meridian chairman Francis Small says the improved result is largely due to a 35 percent increase in generation driven by increased inflows to storage lakes in the period from July to September of last year, as well as to effective management of operating costs over the period.

However, he says the result is still below the accepted market returns on capital.

“This latest half year shows good progress towards meeting this requirement, however, we have not yet in the four years since our establishment achieved the target level of return on investment.

In part, this reflects the competitive nature of the generation and retail markets.”

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. Meridian result / 2

Dr Small warned that below-average inflows during spring and summer could have an impact on the company’s results for the second six months of the year.

On the issue of water in general, the company says there is increasing pressure on the resource from irrigation demands.

This is happening just at the time the energy sector faces real uncertainties over the supply and cost of fuel for thermal generation alternatives as the Maui gas field runs down over the next four years.

“Meridian seeks to accommodate the interests of irrigators – for example with Project Aqua – but full consideration needs to be given to New Zealand’s national interest in having a reliable supply of substantial volumes of hydro electricity,” Dr Small says.

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