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

 


Genesis Energy ends imported coal contract

Media Release: 24 January 2014

Genesis Energy ends international imported coal contract in favour of local supplies

Genesis Energy, operator of New Zealand’s largest power station at Huntly, has ended a contract to import coal from off shore and, at the same time, has extended its supply agreement with Solid Energy.

Both moves will result in a reduced supply of coal to the Huntly Power Station and are a consequence of the Company’s decision to place a second of its older coal/gas generation units at Huntly into storage at the end of 2013.

The Station is now operating with two older 250MW dual fuel units and two modern gas turbines (400MW and 48MW). Of the two other original coal/gas units, one will remain in long term storage and the second will be decommissioned.

Genesis Energy’s Chief Executive, Albert Brantley, said the “decision to close a second unit and end the imported coal contract was made in order to meet the changing New Zealand electricity market and ensure the Company is well placed to meet the future.

“We have a clear focus on reducing our costs over the longer term. However, we also want to ensure that the Company can produce enough energy for New Zealand should there be extended dry periods that reduce the ability of hydro stations to operate.”

In conjunction with this decision, Mr Brantley said the Company has also been negotiating its supply agreement with Solid Energy and was pleased to strike a deal that will extend the supply relationship a further three years to June 2017, subject to Ministerial approval under the Crown Minerals Act.

“We expect to continue to run the two operating coal and gas fuelled units at Huntly.

To do this effectively we plan to manage their fuel supply contracts on much shorter time frames than we have done in the past, giving the Company more flexibility in the wholesale electricity market,” Mr Brantley said.

“Although we are winding back our use of coal, ending the international coal contract is good news for New Zealand and good, in the long term, for the environment. Our reduced reliance on coal is reducing our carbon dioxide emissions, and subsequently reducing our New Zealand Emissions Trading Scheme obligations and that will result in a lower carbon cost to our business,” Mr Brantley said.

The Huntly Power Station will now rely on coal from its own stockpiles supplemented by deliveries of coal from Solid Energy and other North Island suppliers. The cancellation of the international contract does not, however, exclude Genesis Energy from re-engaging with international suppliers if the need should arise and, with a 90 day delivery time-frame, the Company expects to be able to manage any risks associated with only having New Zealand suppliers.

Costs resulting from the exit of the coal supply agreement will be accounted for this financial year, but the overall exit has a positive financial impact on the company from 2014/2015. The value of the contract and the payments remain confidential.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Scoop Business: ComCom Charges Hawkins’ Finance Companies Over Debt Recovery

The Commerce Commission has filed criminal proceedings against two finance companies run by former 1980s high-flyer Allan Hawkins over their debt recovery practices. More>>

ALSO:

Science Media Centre: The Big Science Stories Of 2014

It was a dramatic year for science, one that witnessed a severe outbreak of Ebola in West Africa and an historic mission to land a space probe on a comet. On the home front... headlines with animal testing for 'legal highs', 1080 use to tackle increased pest numbers and court action over genetically modified organisms among the most-covered stories. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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