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Record generation output from Genesis Energy

Media Statement 22 March 2007

Record generation output from Genesis Energy

The cold winter of 2006 had a significant impact on the financial performance of Genesis Energy in the six months to 31 December. Net profit after tax increased to $60m from $47.5m in the same period in 2005.

The profit increase was largely driven by high volumes of electricity dispatched to the wholesale market. The company’s largest power station – the coal/gas fired 1040MW station at Huntly – ended the calendar year with a record output of 6,092GWH. The company’s renewable generation added 2,054GWH.

Revenue for the six months was down from $969m to $945m as an abundance of water in the second quarter depressed wholesale electricity prices. Genesis Energy’s Chief Executive, Murray Jackson, said the company’s diversity of supply once again provided security for its 711,000 electricity and gas customers.

“We had the ability to generate high volumes using coal at Huntly while demand for electricity was at peak levels. 1,153,797 tonnes of coal were consumed at Huntly in the six month period before demand settled in early summer.

“However we are aware of the impact of coal-fired generation on the climate. We have been considering our responsibility regarding climate change for some time. Our key strategy to reduce our dependence on coal has been to construct the 385MW combined cycle gas turbine at Huntly and plan for another similar plant north of Auckland in the Rodney district.”

Other strategies are around developing a number of strategic wind farm sites which complement hydro capability; extracting more efficiency from the existing Huntly plant; reducing carbon emissions from non-generation activity and working with customers to reduce theirs.

Once fully commissioned by winter 2007, the Huntly e3p plant will be able to offset between 1.6 and 1.9 million tonnes of CO2 per annum that would otherwise have been emitted by the less efficient coal-burning plant.

ENDS

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