NWF - NZ Windfarms

[Snoopy]

On the money again Blackpete,
We paid for a windfarm that would generate 180GWh per annum with cash operating costs of $30 per MWh but we got a windfarm that generates 130GWh for $60 which management expects can generate for $51 per MWh.
Thats about $6,400,000 per annum lost, more or less.
Three groups are to blame for the massive waste of shareholder capital which reduces the productive capacity and empoverishes our whole society as well as shareholders directly.
1. Windflow for designing a substandard turbine.
2. NZ windfarms for not knowing their business and holding Windflow to account.
3. Shareholders for not knowing their business and not holding NZ Windfarms management to account.

(written on the Arrium thread)
Power prices may go either way, NWFs cash costs are $51MWh and it is unlikely that the market would be below that for a number of years but if it was then NWF would have to burn my beautiful cash on the balance sheet it would take years and years because there is so much.
When there is too much water then gas turbines shut down when there is not enough they fire up again and keep the market in balance, not sure what you mean by a mismatch of generation capacity to demand beyond that which we have already faced/are facing. If Tiwai shuts down a CCGT will be scrapped, analysts predict a levelling in electricity prices at current levels for a few years and an agreement reached to keep Tiwai and a CCGT operational for a few more years.

I am referring to a mismatch of generating capacity to end line (retail) customers, directly signed up to NWFs books. NWF does not have any retail customers. The bigger gentailers have a natural hedge because small retail customers pay a fixed price for their power regardless of the short term wholesale price. This allows the likes of Meridian to remain higly profitable, even when there is plenty of water in the hydro lakes. No such 'hedge' is available to NWF.

SNOOPY

[Jantar]

....... No such 'hedge' is available to NWF.

SNOOPY

In fact there are a number of hedge products available to NWF. Most of them would be revenue negative, however I can think of at least two methods of hedging that would be beneficial to NWF. NWF, having no controllable generation or load, cannot justify employing a full time trader, and so are probably unaware of the different types of hedge products being used by the other generation companies.

[Jantar]

PM sent. May be too close to commercially sensitive for public discussion.

[Jantar]

I see SALT have become a significant shareholder and now hold 6.8% of the company. Obviously they see some upside here. https://www.nzx.com/companies/NWF/announcements/263921

[BlackPeter]

Great sign they bought in ... and yes PSE - I agree, they might be a very useful ally. All good.