Mercury storage slides to two-year low
By Gavin Evans
Nov. 16 (BusinessDesk) - Hydro storage in Lake Taupo has fallen to a two-year low after unusually dry weather in the central North Island in recent weeks.
Water levels in the lake, which supplies Mercury NZ’s nine hydro plants on the Waikato River, were down to 356.5 metres above sea level today, the lowest since June 2016, the company says.
Inflows into the Waikato catchment during the past four weeks were the third-lowest on record for this time of year, consultants EnergyLink said in a weekly hydrology report yesterday. Storage at Taupo was equivalent to about 270 GWh of generation, the firm said, and about 30 percent below average since 1999, when Mercury was formed.
Earlier this week NIWA noted that soil moisture levels through much of the central North Island, Manawatu and Wairarapa were more than 30mm below average. Around Taupo the deficit was 50 mm. The Crown agency is picking average to above-average temperatures for the whole country through to January and normal to below-normal rainfall in all areas other than the south-west of the South Island.
The dry spell is a change of fortune for Mercury, which has enjoyed above-average hydro storage for much of the past two years. The dams accounted for about two-thirds of the company’s generation in the year ended June; the balance came from its five geothermal plants.
Mercury shares were unchanged at $3.45 and have gained about 2 percent this year.
Taupo is the biggest hydro lake on the North Island but still small relative to the major dams operated on the South Island by Meridian Energy, Contact Energy and Genesis Energy. Lake Waikaremoana, operated by Genesis inland from Wairoa, has also been declining and is currently at a five-month low.
Wholesale power prices jumped in October due to a combination of declining South Island storage and reduced gas supplies. Prices averaged $300/MWh last month, a seven-year high for October, but have since fallen to about half that as demand has eased and a deluge on the South Island restored storage there.
Heavy rain last week, most of it into the Waitaki and Clutha catchments, increased South Island storage by 522 GWh to 2,100 GWh, EnergyLink said.
It noted that South Island inflows during the past four weeks were the 16th highest for the period in 87 years of records.
Genesis, which operates the Tekapo hydro scheme, observed that while North Island storage is about 29 percent below average, higher-than average storage on the South Island means national supplies are almost back to average levels.
Metservice is forecasting light to moderate rain over much of both islands early next week.