Quarterly Operational Update Three months ended 31 March 2014 QUARTERLY HIGHLIGHTS
36
13
%
GEOTHERMAL GENERATION – increased by 36% to the highest ever production level.
%
HYDRO GENERATION up 13% reflecting the decision to build up storage in prior quarter.
12
%
COMMERCIAL SALES volumes down increasing net wholesale sales.
COMMENTARY
GEOTHERMAL GENERATION INCREASES BY 36%, HYDRO GENERATION UP Mighty River Power’s geothermal production was its highest ever in the period at 682GWh, an increase of 179GWh (or 36%) on the prior comparable period (pcp) – making up 45% of Mighty River Power’s total generation. The boost in geothermal production was the result of the additional base-load generation from the 82MW Ngatamariki station completed in September last year, and increased generation from Kawerau due to more fuel availability with a new consent secured for additional fuel. Gas-fired generation at Southdown was only 6GWh during the quarter due to the plant being out for routine maintenance. Southdown is being progressively returned to service with two units now operational, and the third unit expected to be back in service by the end of April. Hydro generation was up 95GWh on pcp (up 13%) to 834GWh despite quarterly inflows at the 2nd percentile. There has only been one drier year on record for the January to March period. The Company had built-up storage in the previous quarter to average levels at 1 January 2014. COMMERCIAL SALES VOLUMES DOWN, NET WHOLESALE SALES UP Net sales to the wholesale market (102GWh long) increased as a result of Mighty River Power reducing commercial sales commitments by 12% through 2013 (calendar year), with the wholesale market providing better rewards for the Company’s flexible hydro generation. Since the beginning of 2014 the Company has seen increased volatility and higher pricing in the wholesale market, and the longer net sales position gave the Company flexibility to optimise value in the market resulting in the price achieved for total generation of $105.34/MWh (up 8%). The overall price the Company achieved for its fixed-price electricity sales was up slightly (1.3%) to $112.67/MWh, which reflected higher commercial prices. Both residential prices and volumes remained flat, with the Company holding broadly steady market share for the period. The Company announced in December that there would be no increase in residential energy prices until at least April 2015, and it has recently also increased its Prompt Payment Discount by 2% for customers on both direct debit and electronic billing. TAUPO STORAGE AT LAST YEAR’S LOW LEVEL Lake Taupo ended the period with storage at 33% of average, with both national and Taupo storage at about the same level as they were this time last year. Typically Taupo inflows increase in May from the low in April. Mighty River Power’s lower commercial sales commitments and higher reliable base-load geothermal production, along with dry year cover and hedging contracts, provides the Company with resilience to manage wholesale price risk when hydrology is low. Mighty River Power will release its financial results for the year ending 30 June 2014 on 20 August 2014
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
01
OPERATING STATISTICS
Three months ended 31 March 2014
Operating Information Electricity Sales
Three months ended 31 March 2013
Nine months ended 31 March 2014
Nine months ended 31 March 2013
VWAP2 ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
112.67
1,077
111.22
1,159
116.25
3,659
114.11
3,936
FPVV sales to customers FPVV sales to residential customers FPVV sales to business customers FPVV purchases from market Spot customer purchases
498
497
1,810
1,872
579
661
1,849
2,064
1,132
1,196
3,842
4,160
499
1,232
1,588
374
Total NZEM Purchases
107.12
1,506
95.11
1,695
70.31
5,074
73.75
380
389
380
389
North Island Customers
344
348
344
348
South Island Customers
36
41
36
41
39
41
39
41
Electricity Customers (000’s)
Dual Fuel Customers
5,748
Volume (GWh)
Volume (GWh)
Volume (GWh)
Volume (GWh)
Buy CfD
511
655
1,737
1,941
Sell CfD
742
918
2,522
3,057
440
550
1,552
1,704
231
263
785
1,116
Contracts for Difference
End-User CfD Net Sell CfD
3
Electricity Generation
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
111.16
834
97.91
739
75.06
2,682
73.96
3,207
152.52
6
133.22
140
83.40
94
106.81
318
97.62
625
87.93
447
66.47
1,843
68.86
1,378
99.89
57
86.66
56
68.70
161
69.16
180
105.34
1,522
97.81
1,382
71.70
4,780
74.47
5,083
Hydro Gas Geothermal (consolidated)
4
Geothermal (equity accounted)
5
Total
1.02
LWAP/GWAP Gas Purchases Retail purchases
6
Generation purchases
0.97
0.98
0.99
$/GJ
PJ
$/GJ
PJ
$/GJ
PJ
$/GJ
PJ
9.85
0.13
9.01
0.15
9.02
0.73
8.95
0.77
9.43
0.19
8.57
1.33
8.85
1.28
8.74
3.13
Carbon Emissions (‘000 tonnes CO2e)
89.8
142
322
396
1.
VWAP is volume weighted average energy-only price sold to FPVV customers after lines, metering and fees
2.
Includes Mighty River Power’s 65% share of Nga Awa Purua generation
3.
Includes Virtual Asset Swap volumes in both Buy and Sell CfD volumes of 172GWh for the 3 months ended 31 March 2014 and 160GWh for the 3 months ended 31 Match 2013
4.
Tuaropaki Power Company (Mokai) equity share
5.
Prices exclude fixed transmission charges
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
02
MARKET DATA
ELECTRICITY GENERATION BY COMPANY FOR THE NINE MONTHS ENDED 31 MARCH Mighty River Power Meridian Energy Contact Energy Genesis Energy Trustpower Other
17%
31%
24%
17%
6%
5%
Financial Year 2013
16%
34%
24%
15%
7%
4%
Financial Year 2014
Source: Electricity Authority Centralised Dataset, Transpower SCADA
SHARE OF ELECTRICITY SALES (GWh) FOR THE NINE MONTHS ENDED 31 MARCH
Mighty River Power Other
20%
80%
17%
83%
Financial Year 2013
Financial Year 2014
Source: Mighty River Power Purchases and Transpower SCADA
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
03
OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS Storage national average Storage FY2014 Rolling 12 month average Otahuhu price 4500
76 75
4000
74 3500 73 72
2500
71
2000
70
$/MWh
GWh
3000
69
1500
68 1000 67 500
66
0 01 Jul
65 01 Aug
01 Sep
01 Oct
01 Nov
01 Dec
01 Jan
01 Feb 01 Mar
01 Apr
01 May
01 Jun
TAUPO STORAGE Average since 1999 FY2014 FY2013
500 450 400 350
GWh
300 250 200 150 100 50 0 01 Jul
01 Aug
01 Sep
01 Oct
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
01 Nov
01 Dec
01 Jan
01 Feb 01 Mar
01 Apr 01 May
01 Jun
04
OTAHUHU ASX FUTURES SETTLEMENT PRICE As at 31 March 2013 As at 30 June 2013 As at 31 December 2013 As at 31 March 2014 90 80
$82.54 $74.70 $66.09
70
$79.36 $73.39
$75.21
$76.08
$73.83
$70.30
$77.51
$70.11
$63.93
$/MWh
60 50 40 30 20 10 0 2014
2015
2016
Financial Year
BENMORE ASX FUTURES SETTLEMENT PRICE As at 31 March 2013 As at 30 June 2013 As at 31 December 2013 As at 31 March 2014 90
70
$/MWh
60
$81.13
$79.46
$78.56 80
$73.52
$73.83
$72.40
$77.93
$77.00 $72.93
$73.74
$66.25
$53.09
50 40 30 20 10 0 2014
2015
2016
Financial Year
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
05
NATIONAL CONSUMPTION National consumption Tiwai Point Aluminium Smelter consumption 12,000 1,373
1,345
10,000
1,345
1,204
1,345
1,367
1,314
1,202 1,231
1,303
1,196
1,238 1,269
1,230
1,234
GWh
8,000
6,000 9,447 4,000
8,458
7,970
8,619
9,467 8,199
7,946
8,834
9,350
8,363
7,991
8,665
9,132
8,299
8,021
2,000
0 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Financial Year
Source: Transpower Information Exchange
NATIONAL CLIMATE SUMMARY
Financial Year
Q1
Q2
Q3
Q4
2014
12.3° C
16.7° C
18.9° C
n/a
2013
12.3° C
16.5° C
19.6° C
14.4° C
2012
11.5° C
16.6° C
18.9° C
14.0° C
Historical Average (since 1999)
11.9° C
16.1° C
19.4° C
14.1° C
Source: NIWA, Met Service
MONTHLY TOTAL CONSUMER RETAIL SWITCHING (ICP) ICP Retail Switching % Churn 25%
40,000
20%
30,000
15%
20,000
10%
10,000
5%
ICPs
% Churn
50,000
0
0% Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14
Source: Electricity Authority
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
06