IFT - Infratil

[huxley]

I’d need to look it up, so don’t quote me on it! But I think they mentioned in one of the February updates, if TLT were to build out all of their pipeline it would require something like $6b

"The cost of building Tilt Renewables’ entireportfolio of projects would be in excess of
$3 billion, that isn’t expected at least in the short
term, but there is every prospect that at least a
third will be committed over the next two years.
This will require Tilt Renewables to raise equity
and debt, either on its balance sheet or by selling
down projects. There is good investor demand to
buy renewable generation which has long-term
power sales agreements."

[Jantar]

they say dundonnell will double the size of tilt , but why not double it again they have consents for mahinerangi and kawera downs combined 400 mw , i think they are to conservative in there approach now that mercury is onboard and stated they are willing to stump up the cash infratil should expediate the development pipeline triple tilt size very quickly is easliy obtainanble

The lower South Island transmission circuits already constrain with existing generation. Any more will just result in hydro spilling water unless there is a massive increase in line capacity.

[BlackPeter]

The lower South Island transmission circuits already constrain with existing generation. Any more will just result in hydro spilling water unless there is a massive increase in line capacity.

... and even with more line capacity - any wind generation in the SI will put more strain on transmission lines, given that it is unreliable and not correlated with demand. Big South island wind farms will become the biggest flop since the development of the 2-blade wind turbine ...

[value_investor]

Its a solid result but unspectacular given the level of funds they have and the companies they own. I think that it holds them in good stead though if they can reinvest all of that back into the companies they own. The capital constraints right now are very low in terms of raising funds and they've taken full advantage of that, now is the interesting part in terms of how capital is allocated. I could see them bringing in a DRP if they want to leverage their cash better.

I continue to hold. I think that the future is solid for the companies they own and the track record of capital allocation is very good.

[bull....]

... and even with more line capacity - any wind generation in the SI will put more strain on transmission lines, given that it is unreliable and not correlated with demand. Big South island wind farms will become the biggest flop since the development of the 2-blade wind turbine ...

i should have stated there biggest opportunity is in australia not nz ( thx to jantar for pointing out why ) anyway i think your being a little short sighted in your view of wind/solar etc as being the biggest flop of the century.

check out nextera energy

http://www.nexteraenergy.com/company/work.html

they seem to be doing very well from wind and solar and batteries , in fact wind generation it could be argued is now the cheapest form of generation today even cheaper than hydro. Ever wonder why utilities are diversifing into wind and solar? because the returns are now very attractive against capital costs ( turbine /solar panel costs continue to fall ). sort of get why mercury brought into tilt now then dont you its because it provides diversification and growth to what could be in the future the uneconomic proposition of hydro compared to wind and solar.

infratil alluded into there review of PPA's in there annual result presentation its because a new model is emerging where utility will recover the cost of the build by charging direct the customer the costs of the build and they also own the asset. the model will generate way better returns than the current PPA model.

in summary returns are only going to get better and better from wind / solar and batteries ... so get a move on infratil

[Hectorplains]

I could see them bringing in a DRP if they want to leverage their cash better.

They already have a DRP. It hasn't been applied to recent dividends.

[bull....]

the transpower report was encouraging suggesting a lot more wind power will be needed in years to come.

[horus1]

I have never read such a terrible report. The cost of solar on houses is declining in cost at 10 % per year and batteries at 20%. Historically loads have been reducing at 1-2% per year. That report misleading . Remember Transpower built a 400KV line to AK which is a white elephant and should be written off.

[Jantar]

I have never read such a terrible report. The cost of solar on houses is declining in cost at 10 % per year and batteries at 20%. Historically loads have been reducing at 1-2% per year. That report misleading . Remember Transpower built a 400KV line to AK which is a white elephant and should be written off.

That reduction in load occurred from 2012 to 2014. Since then loads, particularly in the South Island, have been increasing at the 2 - 4% rate they were previously. This increase is driven mainly by the massive rise in irrigation, but is also due to a lot of the efficiency gains having reached saturation. E.g. Those who can afford to put in heat pumps have already done so, those who are renting and can't afford them never will.

[artemis]

..... Those who can afford to put in heat pumps have already done so, those who are renting and can't afford them never will.

That may change soon, and bigly.

The Healthy Homes Guarantee Act will require minimum heating standards for rentals (yep just rentals) of which there are some 600,000 in New Zealand. MBIE has put out a discussion paper (actually a Regulatory Impact Statement) which refers to 18 degrees minimum temperature (seems to be over the whole property) and specifically says that research shows portable heaters will not cut it. Subtext - one or more heat pumps per rental or some other form of high output fixed heating.

There will be public consultation shortly, but looks like a few minds are already made up.

I wonder if drain on the network will be considered, not to mention drain on sparkies for new circuits. Heat pump suppliers will be begging for migrant installers while laughing all the way to the bank.