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

 

Genesis coal burn 5-yr high in 'unprecedented' conditions

Genesis coal burn reached 5-yr high in 'unprecedented' conditions

By Gavin Evans

Jan. 22 (BusinessDesk) - Coal-fired generation from Genesis Energy’s Huntly operations was the highest in more than five years in the December quarter, as a combination of low hydro storage and plant outages were compounded by tight natural gas supplies.

The company, which also runs three hydro schemes and a wind farm, delivered 601 gigawatt-hours of electricity from its dual-fuel Rankine units at Huntly during the three months. That was almost twice the contribution they made in the same period a year earlier and 512 GWh of that - 85 percent – was fuelled with coal. That was the company’s biggest coal-burn since mid-2013.

Genesis says conditions in the market were “unprecedented” given the unusually low lake inflows for that time of the year and reduced production from the Pohokura gas field. Planned maintenance at the Kupe gas production station and at the company’s 400 MW gas-fired unit at Huntly also tightened supplies.

“Genesis’ generation portfolio responded well to a fuel constrained wholesale market demonstrating the importance and value of fuel diversity coupled with a flexible supply chain during volatile market conditions” said Tracey Hickman, executive general manager of the firm’s generation and wholesale business.

Genesis shares fell 2 cents to $2.65. The stock is up almost 7 percent the past year and closed at a record high of $2.71 on Thursday.

New Zealand relies on the flexibility Genesis has to run the aging Rankine units when required – such as during dry periods or when other plants are unavailable. It fuels them on either gas or coal, depending on what is available and cheapest at the time.



But with gas supplies tight late last year, Genesis ran the two Rankine units on coal for much of October and November. The company also ordered 120,000 tonnes of Indonesian coal for delivery in December and January to maintain supplies.

Those tight conditions, and the higher cost of imported coal, saw the company receive an average $213/MWh for its generation in the period, up from $95 a year earlier and $86 in the September quarter.

While hydro storage is now closer to average levels and gas supplies from Pohokura have been restored, wholesale power prices remain high.

Energy Link managing director Greg Sise says the biggest driver of the current prices is the on-going maintenance shutdown at Contact Energy’s 400 MW gas-fired power station at Stratford. That plant is due back early next month.

Sise said the higher cost of imported coal and the “bleak” outlook for longer-term gas supplies – given the government’s offshore exploration ban – have also contributed.

Peak demand has also been about 100 MW higher than last year, reflecting the 50 MW increase in demand from the Tiwai Point smelter late last year and increasing irrigation demand on the South Island’s east coast, Sise said.

Genesis said the reduced access it had to gas in the December quarter saw its gas-fired production halve to 394 GWh, and total generation fall 8 percent to 1,622 GWh.

Total retail power volume sold increased almost 5 percent to 1,415 GWh, mostly due to increased sales to heavy industry.

Average selling prices were up for all categories and the company said it increased its netback – operating earnings before corporate costs – on electricity and LPG. Its netback on gas fell due to the timing of price increases, it said.

(BusinessDesk)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Electricity Market: Power Panel Favours Scrapping Low-Fixed Charges

An independent panel reviewing electricity prices favours scrapping the government’s low-user fixed charge regime, banning the use of prompt-payment discounts, and requiring greater disclosure of the profit split between the retail and generation arms of the major power companies. More>>

ALSO:

Bottomless Oil And Zero Climate Cost: Greenpeace Not Big On PEPANZ Gas Ban Report

The NZIER report commissioned by oil industry body, PEPANZ, claims the oil and gas ban issued by the Government last April could cost the the New Zealand economy $28 billion by 2050... But Greenpeace says the figures in the report are based on false assumptions and alternative facts. More>>

ALSO:

Sunday Fruit Fly Update: Devonport Fruit And Veg Lockdown

Work continues at pace on the biosecurity response following the discovery last week of one male Queensland fruit fly in a surveillance trap in the Auckland suburb of Devonport. More>>

ALSO:

Digital Services Tax: Government To Plan Tax On Web Operator Income

New Zealand is to consult on the design of changes to tax rules which currently allow multinational companies in the digital services field to do business here without paying income tax. More>>

ALSO: