Mighty River Power quarterly operating update for the period ending 30 June 2012

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Quarterly Business Update Three months ended 30 June 2012

Quarterly Highlights Retail electricity sales volumes increased on the prior comparable period (pcp), reflecting a 29% lift in commercial sales volumes Generation volumes fell 145GWh, reflecting 24% lower hydro generation which was partly offset by increased generation by the Southdown gas-fired station on pcp More than 99% availability from base-load geothermal plants over the quarter Significant wholesale price separation between the North and South Islands influencing higher wholesale electricity purchase prices Commentary Mighty River Power’s customer sales volumes were up 12% on pcp for the three months to 30 June 2012. In the year to 30 June 2012, the Company achieved a 5% increase in sales volumes, despite customer numbers falling by 6,000 over the year. “The growth in sales volumes was driven by our continued strong sales performance – with a 29% lift in commercial sales volumes on pcp and a 14% lift over the 12 months,” said Chief Executive Doug Heffernan. Market conditions resulted in wholesale purchase costs moving from $47.44/MWh to $113.36/MWh, whilst generation prices increased from $45.67/MWh to only $99.92/MWh. Limited transmission capacity (in advance of the HVDC upgrade), poor South Island hydrology and South Island reserve offers all contributed to greater wholesale price separation between the North and South Islands during the period. Total generation volumes were down 8% (145GWh) on pcp, with hydro generation down by 24% (from 1,190GWh to 905GWh). “Inflows to the Waikato River catchments were not at the extraordinary levels of Autumn/Winter 2011, which explains the large fall in volumes quarter-on-quarter following a strong first nine months,” said Dr Heffernan. Gas-fired generation volumes were up significantly on pcp – with a more than five-fold increase for the quarter as the Company continued to use the flexibility in its Southdown gas-fired plant to take advantage of the high wholesale market prices. “Geothermal generation was broadly flat at 556GWh with the impact of the sale of a 10% interest in the Nga Awa Purua plant in early April, mostly offset by high availability factors across geothermal stations of 99.7%.“ The Company’s wholesale market net position for the quarter was slightly short at 34GWh; with the Net Contracts for Difference (CfD) position falling by 104GWh.


Operating Information1

Electricity Sales FPVV sales to customers

Three months ended 30 June 2012 VWAP2 ($/MWh)

Volume VWAP (GWh) ($/MWh)

$122.32

1,359

Twelve months ended 30 June 2012

Volume VWAP (GWh) ($/MWh)

$116.27

1,211

$115.48

Twelve months ended 30 June 2011

Volume VWAP (GWh) ($/MWh) 5,021

$110.09

Volume (GWh) 4,776

- Residential customers

680

684

2,609

2,652

- Commercial customers

679

527

2,412

2,124

1,436

1,292

5,323

5,089

505

504

2,035

2,136

FPVV purchases from market Spot customer purchases Total NZEM Purchases Electricity Customers (number)

$113.36

1,941

386,000

Contracts for Difference

$47.44

1,796

$94.68

7,358

$56.76

7,226

392,000

Volume (GWh)

Volume (GWh)

Volume (GWh)

Volume (GWh)

Buy CfD

553

410

1,708

1,263

Sell CfD

791

752

3,224

2,947

Net Sell CfD

238

342

1,516

1,684

Electricity Generation

VWAP ($/MWh)

Volume VWAP (GWh) ($/MWh)

Volume VWAP (GWh) ($/MWh)

Volume VWAP (GWh) ($/MWh)

Volume (GWh)

Hydro

$102.72

905

$47.25

1,190

$87.89

4,294

$52.87

4,368

Gas

$109.48

179

$51.72

33

$100.97

589

$119.903

273

Geothermal (consolidated)4

$92.14

493

$41.88

499

$82.11

1,946

$47.38

1,956

Geothermal (equity accounted)5

$93.41

63

$42.52

63

$81.80

239

$48.96

236

Total

$99.92

1,640

$45.67

1,785

$87.18

7,068

$53.83

6,833

LWAP/GWAP Gas Purchases6

1.13

1.04

1.09

1.05

$/GJ

PJ

$/GJ

PJ

$/GJ

PJ

$/GJ

PJ

Retail purchases

$8.67

0.34

$8.48

0.29

$8.73

1.1

$8.15

1.05

Generation purchases

$8.34

1.67

$8.46

0.45

$8.18

5.47

$7.97

2.97

Carbon Emissions (‘000 tonnes CO2e)

1. 2. 3. 4. 5. 6.

Three months ended 30 June 2011

174

113

628

Data for prior periods may be restated to reflect current calculation methodology VWAP is volume weighted average energy only price sold to FPVV customers after lines, metering and fees Reflects the Electricity Authority’s decision to reset prices to around $3,200/MWh in the Auckland region. This ruling is currently under appeal Includes share of Nga Awa Purua generation Tuaropaki Power Company (Mokai) equity share Prices exclude fixed transmission charges

502


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