Simply Energy Structures L&M Power Off-take to NZ Aluminium Smelters

Wellington, 8th April 2011 – Simply Energy Limited (SEL) announces the successful completion of a ground breaking deal with L&M Energy Limited (LME) to structure a power offtake agreement between LME’s Ohai Coal Seam Gas pilot generation project and New Zealand’s largest energy user, New Zealand Aluminium Smelters Limited (NZAS). The agreement was concluded and announced on the 7th April.

SEL assisted LME to get this project to market and evaluate the longer term electricity market commercialisation options. SEL will also manage the generation sales into the spot market and settle the off-take with NZAS.

Murray Dyer, Commercial Director, at SEL said that their combination of generation–retail market licenses and specialist advisory services for independent generators clearly resonates with clients like LME, enabling them to structure deals directly with large energy consumers.

“We are a registered generation – retail market participant focused on structured deals as opposed to the mass market, therefore we can take the time and add real value to our clients, such as LME. We are not just standing back providing advice, but we are in the detail of the industry which I believe LME and NZAS have valued”.

The exciting aspect of this coal seam gas project and off-take with NZAS is that it provides a blue print for full commercialisation of the field. It has demonstrated that large consumers can mutually work directly with independent generators. This is especially relevant with coal seam gas projects in the South Island where this baseload capacity is desperately needed to complement dependence on hydro and dry year risk, and to enhance security of supply for these large consumers.

Chris McKeown, GM Commercial at LME commented that having Simply Energy at the table gave LME greater insight and options in the electricity market.

“Simply Energy has been invaluable in structuring this off-take deal between LME and NZAS. We look forward to continuing our working relationship with SEL to manage the generation sales and assist in determining the longer term commercialisation strategy of this important energy resource”.

ENDS