Quarterly Operational Update Three months ended 30 September 2013 QUARTERLY HIGHLIGHTS
43
%
BASELOAD GEOTHERMAL GENERATION made up 43% of electricity generation
34
$ %
HYDRO GENERATION down 34% – the lowest first quarter since the Company was formed in 1999
64
.37
FLEXIBLE GENERATION portfolio allowed the Company to receive a higher price for its generation than the market and its competitors
COMMENTARY
FLEXIBLE GENERATION PORTFOLIO COMPENSATES FOR LOW HYDRO CONDITIONS
Operating statistics for the quarter to 30 September 2013 reflect additional geothermal production from the new Ngatamariki station and active management of the Company’s portfolio – with increased net purchases from the wholesale electricity market to cover customer sales requirements, due to lower hydro production during the period. The 82MW Ngatamariki station boosted total geothermal output to 691GWh and 43% of Mighty River Power’s total generation for the quarter. The overall generation volume of 1,621GWh was down 348GWh (or 18%) on the prior comparable period (pcp) due to low inflows into the Waikato River catchment (hydro generation down 34%) and the Company opting to buy additional volumes cheaply from the wholesale market – rather than using more expensive gas-fired generation. South Island hydro conditions, which have a much greater influence on national pricing, were above-average during this time and resulted in low prevailing wholesale prices during the period. The Company achieved an improvement in the relative wholesale price paid for purchases compared with the wholesale price it earned for its generation (LWAP/GWAP), from 1.04 in the pcp to 0.97 for the three months to 30 September 2013. This reflects the best use of its flexible generation in a period of low inflows, in addition to recent improvements in the national transmission grid which have strengthened the competitive environment and reduced exposures to locational price risk. RECORD LOW OUTPUT FOR WAIKATO DURING Q1; HYDRO STORAGE NOW ABOVE 100% OF AVERAGE
As a result of the Company’s management of the available water and flexible use of hydro and gas-fired generation, the weighted average wholesale electricity price achieved for generation was $64.37/MWh, similar to pcp and above the market prices received by our competitors for the period. Flexible gas-fired generation accounted for only 4% of total production and was down nearly 50% to 67GWh in line with the national trend of renewables displacing thermal plant. While hydro volumes for the quarter were the lowest for Q1 since the Company was formed in 1999, Lake Taupo storage is now at more than 100% of historical average after strong inflows from late September. MAINTAINS POSITIVE SALES MARKET SHARE TREND
Electricity sales volumes to customers were down 5% on the pcp, largely reflecting lower national demand and a drop-off in commercial volumes (down 8%) with the Company actively managing its sales book after achieving a very strong increase in advance of the commissioning of Ngatamariki. Over the past five years the Company has increased its market share from 17% to 19%. In the continuing highly competitive market in the quarter, Mighty River Power’s average FPVV sales price was $123.47/MWh across its multiple consumer brands and sales channels. Mighty River Power will release its financial results for the six months ending 31 December 2013 on 26 February 2014.
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
01
OPERATING STATISTICS
Three months ended 30 September 2013
Operating Information Electricity Sales FPVV sales to customers
VWAP1 ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
123.47
1,430
119.37
1,505
FPVV sales to residential customers FPVV sales to business customers FPVV purchases from market Spot customer purchases Total NZEM Purchases
Three months ended 30 September 2012
62.55
766
784
664
721
1,498
1,628
455
546
1,953
67.99
385
394
North Island Customers
347
353
South Island Customers
38
41
41
40
Electricity Customers (000’s)
Dual Fuel Customers
2,175
Volume (GWh)
Volume (GWh)
Buy CfD
681
766
Sell CfD
941
1,173
Net Sell CfD
260
407
Contracts for Difference
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
67.35
863
65.69
1,314
80.36
67
79.01
132
Geothermal (consolidated)
58.90
645
60.68
459
Geothermal (equity accounted) 3
61.78
46
62.23
64
Total
64.37
1,621
65.30
1,969
Electricity Generation Hydro Gas 2
0.97
LWAP/GWAP Gas Purchases Retail purchases
4
Generation purchases Carbon Emissions (‘000 tonnes CO2e)
1.04
$/GJ
PJ
$/GJ
PJ
8.77
0.42
8.81
0.40
8.71
0.75
8.75
1.26
142
151
1.
VWAP is volume weighted average energy-only price sold to PFVV customers after lines, metering and fees
2.
Includes Mighty River Power’s 65% share of Nga Awa Purua generation. Includes full quarter of generation (157GWh) from Ngatamariki, which revenues were capitalised until official handover at the beginning of September (99GWh)
3.
Tuaropaki Power Company (Mokai) equity share
4.
Prices exclude fixed transmission charges
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
02
MARKET DATA
ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 30 SEPTEMBER Mighty River Power Meridian Energy Contact Energy Genesis Energy TrustPower Other
18%
26%
23%
21%
7%
6%
Financial Year Q1 2013
15%
30%
26%
18%
7%
6%
Financial Year Q1 2014
Source: Electricity Authority Centralised Dataset
SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 30 SEPTEMBER
Mighty River Power Other
21%
79%
19%
81%
Financial Year Q1 2013
Financial Year Q1 2014
Source: Mighty River Power Purchases and Transpower Information Exchange
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
03
OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS Storage national average FY2014 storage
75
3000
75
2500
74
2000
74
1500
73
1000
73
500
72
GWh
3500
0 01 Jul
01 Aug
01 Sep
$/MWh
Rolling 12 month average Otahuhu price
72
TAUPO STORAGE Average since 1999 FY2014 FY2013 450 400 350
GWh
300 250 200 150 100 50 0 01 Jul
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
01 Aug
01 Sep
04
OTAHUHU ASX FUTURES SETTLEMENT PRICE As at 30 June 2012 As at 30 September 2012 As at 30 June 2013 As at 30 September 2013 100 90
$83.54
$83.36
80 $69.68
70
$74.82
$86.03 $78.76
$78.49 $66.09
$70.30
$66.45
$74.89
$/MWh
60 50 40 30 20 10 0
2013
2014
2015
Financial Year
BENMORE ASX FUTURES SETTLEMENT PRICE As at 30 June 2012 As at 30 September 2012 As at 30 June 2013 As at 30 September 2013 120
100
$96.69
$90.86
$90.46 $84.09
$83.05
80
$73.83
$/MWh
$66.53
$63.94
$66.25
$76.95
$61.22
60
40
20
0
2013
2014
2015
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
GWh
8,000
1,314
1,345
1,367
1,204
1,202 1,231
1,303
1,230
1,196
1,238
6,000 9,447
4,000
8,458
7,970
Q2 11
Q3 11
8,619
9,467
8,199
7,946
Q2 12
Q3 12
8,834
9,350
Q4 12
Q1 13
8,363
7,991
Q2 13
Q3 13
8,665
9,132
Q4 13
Q1 14
2,000 0
Q1 11
Q4 11
Q1 12
Financial Year Source: Transpower Information Exchange
NATIONAL CLIMATE SUMMARY
Financial Year
Q1
Q2
Q3
Q4
2014
12.3° C
n/a
n/a
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
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
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 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
0%
Source: Electricity Authority
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
06