Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Meridian suffers low SI wholesale prices in Dec 1/4

Meridian suffers low South Island wholesale prices in Dec quarter

By Pattrick Smellie

Feb. 1 (BusinessDesk) - Meridian Energy achieved barely half the average price for wholesale electricity as its Auckland-based competitor, MightyRiverPower, the state-owned power company's update for the December quarter shows.

The average price per Megawatt hour per customer for Meridian over the three months was $31.21 per Megawatt hour, while MRP said in its quarterly update earlier this week it had outperformed the market and achieved an average price of $66.25 per MWh.

Both state-owned generator-retailers are slated for partial privatisation, possibly both this year. The timing depends on the outcome of a Supreme Court hearing that wraps up in Wellington today, in which the New Zealand Maori Council is seeking to block the sales.

While both are large-scale hydro generators, Meridian's assets are in the South Island while MRP's are all on the Waikato River, fed by Lake Taupo.

During the period, South Island catchments were at times full to overflowing, while Taupo was never as full, suggesting some explanation for better prices from North Island hydro assets.

Meridian also suffered 20 days in the quarter when work on upgrading the high voltage direct current link across Cook Strait had caused "periods of high price separation between the North and South Islands."

Price separation is where the national wholesale market for electricity is broken in two by constraints on the link between the two islands. Completion of the $672 million Transpower upgrade been delayed twice. It is now expected to commission in late April.

The commentary confirms Meridian is one of the few participants in the wholesale electricity market pleased with an unexpectedly radical solution from the Electricity Authority to redistribute the costs of the national grid among users.

"Meridian is particularly pleased that the EA's analysis supports a change to pricing for the HVDC link."

The existing charging regime loads the whole cost of the north-south link on southern generators, even though northern generators get benefit from it.
In the same quarter a year earlier, Meridian's average price per MWh ran at $60.88.

Total customer numbers at 284,673 were steady, and retail churn is dropping at around 18 percent.

Meridian also confirmed it is considering the future of its A$500 million investment in the Macarthur wind farm in a joint venture in Victoria, Australia.

The bond-like structure of the arrangement could make it profitable for Meridian to exit while interest rates are low. However, "no decision is imminent," the company said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news