MCY Mercury NZ ( MRP Mighty River Power)

[Snoopy]

EOFY2022 and we have the the former Tilt NZ based windfarms and the first stage of the Turitea wind farm 'on the books' and generating.

Mercury Windfarms EOFY2022	Commissioned	Generation Capacity
Waipipi	2021	133MW
Tararua I & II	1998,2004	68MW
Tararua III	2007	93MW
Mahinerangi I	2011	36MW
Turitea North	2021	119MW
Total Completed Capacity		449MW

Capacity generation will not be achieved unless all of the windfarms are running 24/7. This isn't going to happen. So I will use a capacity reduction factor of 43.2% (see post 1321) to account for this. Combining this information with other information on existing hydro-electric and geothermal energy generation capacity and utilisation gives us an EOFY2021 picture.

Generation Asset Class	Existing Generation Capacity	Usage rate	Effective Generation Capacity
Hydro	1063MW	51.4%	546MW
Geothermal	463MW	94.0%	435MW
Wind	449MW	43.2%	194MW
Total			1175MW

The yet to be constructed Turitea 2 is designed to deliver 103MW of generation capacity, or

103MW x 0.432 = 45MW of effective generation capacity

With the equivalent of seven of these stations already funded to be constructed (post 1460), the incremental value embedded in Mercury shares which is already embedded above existing production capacity is:

1 + (7 x45MW)/(1175MW) = 1.268 or +26.8%

Giving value to some of Mercury's own consented power stations, which apart from Turitea South, have not been given the go ahead yet is a strange concept. But it does appear the market is doing just that. Because IMO, the current MCY share price is very difficult to justify on Mercury's earnings today. My explanation is that 'everyone needs power' and the country is on the path of 'renewable electrification'. So even though not all of the Mercury consented power stations are yet built, there is reasonable certainty that they will be. And people are prepared to pay for 'certain cashflow', even if it is a few years away.

SNOOPY