MEL - Meridian Energy

[Louloubell]

A good monthly update, moi thinks.

[RTM]

https://www.meridianenergy.co.nz/new...ew-blog-post-7

Thought this might have warranted market advice.
For those interested.

[mwri]

Seems Meridian is trying to pitch this as an alternative to onslow. Will be interesting to see where it goes, especially after contact backs out

[mwri]

Meridian to build battery at Ruakaka. 100MW peak delivery, with 200MWh of storage to be completed in 2nd half 24

Meridian to build Ruakākā Battery Energy Storage System - NZX, New Zealand’s Exchange

[RGR367]

Divvy in the bank yesterday. One more payment like it will make this holding in the negative-book-value territory. A very nice gift from the gov't had you participated and/or accumulated since its IPO. Congrats to all holders

[Sideshow Bob]

https://www.nzx.com/announcements/417236

Meridian Energy has reported net profit after tax of $95 million for the year ended 30 June 2023, downfrom $664 million reported last year, which included the gain on the sale of Meridian's Australianbusiness and positive non-cash movements in the value of hedge instruments.

Excluding the gain on sale and non-cash movements in hedge instruments, underlying net profit aftertax1 was up 35% to $315 million and operating earnings or EBITDAF2, was up 10% to $783 million forthe year ended 30 June 2023. This improved operating result was driven by higher customer sales,higher generation volumes and positive wholesale trading results.

“We’ve continued to focus on playing a key role in helping Aotearoa New Zealand to decarbonise bydriving forward with our renewable developments and offering customers an enhanced range of cleanenergy solutions,” says Chief Executive Neal Barclay.“I’m particularly proud that Meridian is leading the market in being the first New Zealand company toprogress a grid-scale battery construction in this country, which will add significantly more flexibility tothe electricity system in the form of energy storage. We have also secured credible and committedpartners to advance the Southern Green Hydrogen project. We see this as a potential game changeras it will support Aotearoa’s drive to energy independence by providing significant demand responseand an energy source for hard to abate processes.”

The Board declared a final ordinary dividend of 11.90 cents per share, 3% higher than the previousyear. This brings the total ordinary dividends declared for the year to 17.90 cents per share, also 3%higher than the previous year.

Meridian grew overall sales volumes by 2.6%, while also increasing focus on creating moremeaningful relationships with customers to support their decarbonisation opportunities.

The company has made good progress expanding the Zero electric vehicle charging network, as wellas electric vehicle and solar customer participation. Meridian is also supporting customers with bothprocess heat conversion and demand flexibility volumes, which is building on the 50MW demandresponse agreement reached with New Zealand’s Aluminum Smelter, announced in June, andsupports our low carbon hedge portfolio.

This month, Powershop won Consumer New Zealand’s People’s Choice award for the third year in arow, and the sixth time since 2015.During the year, Meridian completed the migration of the Meridian customers to the Flux customercare and billing platform.

All Meridian customers are now on this world-class platform that will enablethe business to continue to deliver great customer service and innovative products in a rapidlyevolving competitive environment. The company also expects to continue to reduce the cost to serveits customers.

Meridian’s Energy Wellbeing program, launched during the year, continued to support the company’smost vulnerable customers.“An initial trial provided support for 250 households, and we found that by being a conduit into socialsupport agencies and by applying our own capabilities we were able to help these customers withenergy affordability challenges,” says Barclay.

“We are now ramping up the program and targeting $5 million into a new Energy Wellbeing Fund tosupport families in energy hardship with the aim of reaching 5,000 households by the end of 2024.”

[Marilyn Munroe]

The United States has announced sanctions prohibiting the trading of Russian metals including aluminum on the London Metal Exchange and the Chicago Mercantile Exchange. In addition they have prohibited the import of these metals into the United States.

This should strengthen the hand of Meridian in power supply negotiations with the smelter

https://www.bloomberg.com/news/artic...s-on-exchanges

Boop boop de do
Marilyn

[xafalcon]

The United States has announced sanctions prohibiting the trading of Russian metals including aluminum on the London Metal Exchange and the Chicago Mercantile Exchange. In addition they have prohibited the import of these metals into the United States.

This should strengthen the hand of Meridian in power supply negotiations with the smelter

https://www.bloomberg.com/news/artic...s-on-exchanges

Boop boop de do
Marilyn

I think the deal has largely been agreed already.

The smelter recently bought new uniforms for all their staff, the cost was eye-watering (6 figures from memory). No business about to "up sticks and leave" would waste that amount of money on new sets of kit for soon the be redundant employees

And transpower has upgraded the lines heading north, so manapouri power is no longer entirely stranded in southland if NZAS ever decides to leave

The days of NZAS having overwhelming leverage are gone. However, NZAS pays an important role in the electricity market, helping to keep supply and demand balanced (always on the tight side), and consequentially keeping wholesale prices high. So this will have added some restraint to price demands

[Sideshow Bob]

https://www.nzx.com/announcements/432102

Meridian and NZAS Sign Long Term Contracts


Meridian Energy and New Zealand’s Aluminium Smelter (NZAS) have signed a package of conditional 20-year contracts for part of the NZAS Tiwai Point aluminium smelter’s electricity needs. The package includes a long-term fixed price contract for wholesale electricity price cover and a significant demand response agreement.

Meridian Energy Chief Executive Neal Barclay says the agreement is an excellent result after many years of hard work.

“This is a fantastic outcome for New Zealand and the Southland region. It’s further proof that large industrial businesses can utilise New Zealand’s renewable energy advantage and create low carbon sustainable products, high value jobs and export dollars for our country.”
“We are very pleased that the NZAS team have adopted a more flexible approach toward their operations. The demand response element of this new agreement is groundbreaking, not only for this country but globally. The level of flexible demand offered by NZAS will support the electricity system to become even more renewable, while relying less on coal and gas when the hydro lakes are low.”

Mr Barclay says the contracts are also a good result for Meridian.

“This new package of contracts is commercially sustainable and delivers value for our shareholders, so we are talking a real win-win here. The NZAS decision to extend the smelter life removes significant uncertainty for the electricity sector, which also helps pave the way for new renewable energy to be built.”

Meridian will now consider implications on future pipeline investment and dividend policy. An update on the dividend policy can be expected at Meridian’s full year results briefing in late August.

Key terms of the long-term contracts include:
• 377 MW base load volume from 2025
• pricing that begins 1 July 2024 with a 20-year term, up to and including 31 December 2044
• four demand response options, ranging from 25 MW to 185 MW – an upper limit that roughly equates to one of Huntly’s Rankine units. Three quarters of a called option will come off Meridian’s contracted volume

A maximum of approximately 800 GWh of demand response is available in any given year, with an average of approximately 400 GWh per annum over the 20-year term of the contract. This will be valuable during periods of low lake inflows, providing critical dry year cover to the electricity system.

The new arrangements will replace all the current arrangements between Meridian and NZAS, with the current arrangements terminating when the new arrangements take effect.

The contracts are conditional on satisfaction of conditions precedent, which include regulatory approval from the Electricity Authority. If approval is given, the contracts will take effect from the later of 1 July 2024 and the date Meridian confirms to NZAS that all conditions precedent are satisfied or waived. If conditions precedent are not all satisfied or waived before 31 December 2024, the contracts will not come into effect.

NZAS has provided Meridian with a letter setting out their commitment to environmental remediation of the smelter site, including details of their work to date with key stakeholders. A copy of the environmental remediation letter accompanies this release.

A copy of the long-term electricity contract, the demand response agreement and the other related conditional contracts signed by Meridian and NZAS are available here. A summary of the key terms of the long-term electricity contract and the demand response agreement accompanies this release.

[kiwikeith]

https://www.nzx.com/announcements/432102

Meridian and NZAS Sign Long Term Contracts



Meridian will now consider implications on future pipeline investment and dividend policy. An update on the dividend policy can be expected at Meridian’s full year results briefing in late August.

The price that NZAS pays is going up but there are implications on future pipeline investment. So does this mean the dividend is going to rise or fall?