Contact Energy - CEN Chart

[Snoopy]

As New Zealand does not have interconnection to other grids in different time zones our generation mix must take into account the daily demand profile and the intermittancy of solar and wind generation. We are already at the stage of wind generation causing our grid to reach load stability limits. Any additional solar without accompanying storage would only exacerbate that situation.

There is a solution, but one that none of the power companies are interested in. That is Pumped Storage Hydro. For every 1 MW of PSH the country can accept a further 2 MW of intermittant generation. PSH can pump water to storage when there is an excess of intermittant geneation, and generate withit when there is a deficit.

This thread is obviously the right place for this discussion as the two best sites for PSH are both in Contact's catchments. Lake Onslow could increase NZ's energy storage by 200% and provide 1200 MW, allowing up to a further 2400 MW of intermittant generation. This scheme would cost between $3.5 and $4 billion. The Neck between Hawea and Wanaka would only be 1/10 the size and cost around $400 million. Either of these would allow a huge increase in wind or solar and decrease the reliance on gas fired generation.

The above post from Jantar five years ago provides an interesting context for today's announcement from Contact Energy.

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https://www.nzx.com/announcements/406412

"With around 300,000 solar panels, Kōwhai Park’s solar farm will be among the largest in New Zealand."

"The expected 150MW (or 170MWp) array will generate 290 GWh per year. This is equivalent to the annual demand of approximately 36,000 homes or approximately half of Christchurch’s domestic flights being converted to low-emission technologies."

"Contact Energy CEO Mike Fuge says they’re excited to announce this development partnership."

“We’ve committed to creating up to 380,000 megawatt hours of grid-scale solar generation by 2026, this project will deliver over half of that."

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Now who are Lightsource bp? The BP bit is that petroleum multinational that like to brand themselves 'Beyond Petroleum' these days. Lightsource is a British start up, founded in 2010 and now recognised as one of the largest solar developers in the world. "Lightsource bp" is a 50.50 joint venture between these two companies.

" “Lightsource bp has a strong international track record of successfully delivering utility scale solar projects, and with our partners at Contact Energy we look forward to working closely with Christchurch Airport on the development, construction and operation of Kōwhai Park,” says Adam Pegg, (LSbp’s Australia and New Zealand Country Manager"

https://lightsourcebp.com/about/

Contact is a 50/50 joint partner in developing this project, but has contracted to buy all of the power output from the solar array once built.

On the surface Kowhai Park looks like a good fit to be built on Christchurch Airport land. The airport is a power hungry operation and most of that power demand is in daylight. A perfect fit then, for having a large solar farm on the doorstep. But despite being a power hungry operation, I doubt if they would consume the equivalent power of 36,000 homes. However with all of those Fendalton housewives and househusbands on the doorstep, there will be plenty left over to power the morning tea party teapots and wash the starched table cloths afterwards.

The real question that remains unanswered in the Contact energy news release is the effect on grid stability, as I highlighted in bold in Jantars post. Could Kowhai Park be the domino that sees the Lake Onslow pumped storage project green lighted for sure? And hey presto, Contact are right on the doorstep to manage that! Very clever business tactics from Contact CEO Mike Fuge.

SNOOPY

[fish]

Snoopy have you considered that with solar you only need overnight storage-the neck could provide a lot more than this at 10% or less than the cost of Onslow .
Janitor could you tell us more?
Expert opinion on changing climate and solar dynamics much appreciated.

[kiora]

Snoopy have you considered that with solar you only need overnight storage-the neck could provide a lot more than this at 10% or less than the cost of Onslow .
Janitor could you tell us more?
Expert opinion on changing climate and solar dynamics much appreciated.

OR rather than pumped storage maybe better to use to make "Green Hydrogen" ?

"In time, the park will be home to green hydrogen generation and able to meet the needs of high users of energy, like vertical farms and data centres."

https://www.nzx.com/announcements/406412

[Snoopy]

Snoopy have you considered that with solar you only need overnight storage.

Kōwhai Park’s solar farm will be rated at 150MW, with total energy produced forecast to be 290GWh/year. This implies a utilisation rate of:

290GWh/year / (0.15GW x 24h/d x 365d/year) = 22.0%

Now 22% works out at just 0.22 x 24 hours = equivalent to working at just 5.3 hours per day (equivalent work at maximum capacity). But that is an average based across all weathers and seasons. If the utilisation got to double that rate in Summer, then Kōwhai Park would be working at 10.6 hours per day, equivalent to a 44% utilisation rate.

So we might expect the energy produced in one day by Kōwhai Park on a summer day to be something like:

(150MW x 0.44) x 24h = 1,584MWh


Now Fish, here is what Jantar told us on 26th August 2022:

Onslow would not pump, or generate, based on the season, but rather it would do so based on the wholesale price. It is likely that it would be pumping when prices are less than around $50 per MW, and generating when prices are above $100 per MW. Because it can bid (for pumping) and offer (for generation) there would be a number of price bands, not a single price in each direction. It is likely that it would do both: Pumping overnight when prices are low, and generating during the day when prices are high on many days.

The above is telling me that principally, Onslow, despite its significant storage capacity, would be designed to operate as an overnight battery, first and foremost.

Clutha is a run of River scheme as the storage available at Clyde and Roxburgh is less than can be held for a single day. The median natural inflow at Clyde is 515 cumecs plus any water released from Hawea. IF there are:

a/ Median inflows, and minimum water being released from Hawea, AND
b/ Only releasing sufficient water from Clyde to meet the 286 cumecs from Roxburgh, AND
c/ Lake Dustan level was in the lower 1/4 of its 1 m operating range prior to starting,

THEN Clyde would be spilling water within 18 to 22 hours. This is the main definition of Run-of -River: Water reaching the top dam must be passed through within 24 hours.

Clyde is able to shut down for a few hours overnight when flows are low, and doesn't have to supply water to Roxburgh continuously as Roxburgh has around 6 hours of storage.

Working backwards through that, Roxburgh (with a maximum generation capability of 320MW, and a utilisation rate of 51.4%) is producing on average:

(320MW x 0.514) x 24h = 3948MWh of energy per day

This should be reasonably consistent all year round because summer river flows are driven by snowmelt on the Clutha river.

My conclusion is that, over summer, and treating Contact's Soiuth Island assets as one whole electricity system, Kōwhai Park could add 40% to Roxburgh's average daily output. But if that happened - which means water upstream at Clyde could be saved-, then even if the Clyde dam was at a low point (1/4 capacity), that means the Clyde dam would fill up within 18-22 hours. And the reason I am bringing the Clyde dam into this discussion is because the Clyde dam is the upstream power feed that will be supplying Onslow,

This means it is just as well we are only looking at the equivalent of a few hours of hydro storage displaced by Kōwhai Park solar. That's because we only have a few hours of available storage in that Clyde dam part of the Clutha river system that can be displaced.

SNOOPY

[kiora]

Forget Onslow?
"There Kōwhai Park development made the airport a standout candidate for developing green hydrogen technology."
"The ability to produce renewable energy on-site is key for being able to eliminate carbon emissions from the aviation sector.

Secondly, as an atmospheric gas, hydrogen is extremely non-dense compared to traditional kerosene-based aviation fuel. Cooling and compressing hydrogen into a state that is usable on board aircraft is a challenge that Christchurch-based company Fabrum has been trying to address.

Fabrum’s Christopher Boyle says that being part of the consortium will “turbocharge” the transition and learning process for hydrogen tech."

“Apart from aviation, you have all the energy use cases here that makes Christchurch very interesting.”
https://www.nzherald.co.nz/travel/ai...HASZ6GEMM3PHA/

[Sideshow Bob]

https://www.nzx.com/announcements/406544

Overview

New Zealand renewable energy company Contact Energy (‘Contact’) today released its interim financial results for the six months to 31 December 2022.

Contact CEO Mike Fuge said the financial performance in the first half of the FY23 financial year was reflective of soft short-term wholesale market conditions. Contact had made strong progress on delivering to its Contact26 strategy and was focused on leading New Zealand’s decarbonisation by connecting customers with its renewable development pipeline.

- Net loss of $7m reported after recognising an onerous contract provision of $120m ($86m after tax) following a review of the estimated available capacity of the Ahuroa Gas Storage Facility (AGS). Excluding AGS, underlying net profit was $79m.

- Underling EBITDAF (pre-AGS provision) decreased by $76m to $246m as a result of lower wholesale prices, lower renewable and thermal generation, increased operating costs to deliver on strategic growth priorities and inflationary conditions.

- Operating free cash flow decreased by $71m to $60m. Working capital continues to be elevated, with more gas and carbon in inventory.
- Resource consent gained to continue operating on the Wairākei geothermal field for the next 35 years, enabling planning to proceed on GeoFuture, a new station of up to 180MW at Te Mihi to replace Contact’s 64 year-old operations (Wairākei, 127MW).

- Selected by Christchurch Airport to deliver 170MWp (150MW) solar farm at Kōwhai Park through Contact’s joint venture with Lightsource bp.

- Market leading development pipeline expected to deliver up to 6TWh of new renewable electricity this decade, with 3.0TWh already consented.

- Te Rapa power station prepared for closure in June. On track to more than halve FY21 scope 1 and 2 carbon emissions by 2026.

- Strong endorsement of Contact’s refreshed retail offering in the past six months, with more than 20,000 new connections.

- Expanded ‘time of use’ offerings by introducing Dream Charge, enabling customers to charge their EVs at home at cheaper night rates and contributing to the decarbonisation of New Zealand.

- Supported customers by keeping price increases below inflation, despite sustained higher wholesale prices over the last 3 years.

- Launched a leading parental leave policy, ‘Growing your Whānau’, one of the most comprehensive, far-reaching parental leave policies in New Zealand.

Financial performance

Contact reported a net loss of $7m after recognising an onerous contract provision of $120m ($86m after tax) following a review of the estimated available storage capacity of AGS. This is a non-cash accounting adjustment to recognise the difference between the expected benefits received and the contracted schedule of payments. Underlying net profit of $79m was down $55m from a year ago on lower operating earnings (EBITDAF) and unfavourable movements to the fair value of financial instruments, partially offset by lower depreciation and lower tax on earnings against the prior year.

Underlying EBITDAF (pre-AGS provision) decreased by $76m to $246m, down 24 percent on the record result of 1H22, with lower wholesale prices, lower renewable and thermal generation and increased operating costs to deliver on strategic growth priorities and reflecting inflationary conditions.

Operating free cash flow for the period decreased from $131m to $60m, down 54% year-on-year on lower operating earnings, higher stay-in-business capital expenditure and higher cash tax paid on strong earnings in prior periods. This was partially offset by favourable working capital movements on a net basis. While lower than last year, working capital was still elevated as we held more gas and carbon in inventory.

The Board approved an interim dividend of 14 cents per share (imputed by up to 12 cents per share for qualifying shareholders) to be paid on 30 March 2023.
“Contact’s financial performance reflected the soft short-term wholesale market conditions experienced in the half year,” said Mr Fuge.

“We saw unprecedented hydro inflows which depressed market prices and saw greater price separation between the North and South Islands. We responded running less thermal generation and positioned our portfolio to benefit from expected improved market conditions in the second half.”

“Global energy and supply concerns continued to impact on commodity markets, with international energy prices holding at unprecedented levels, including coal. Domestic gas output remains constrained and readily accessible storage has reduced. These thermal fuel challenges continue to support the acceleration of our Contact26 strategy.”

Demand

In line with Contact’s decarbonisation focus, Mr Fuge said demand for renewable electricity from forward-thinking customers remained strong. Contact is focused on five key areas for demand growth, being large scale 24/7 data centres, industrial process heat, major industrial energy users, road transport and green chemicals.

“While still early days, we are excited about opportunities to work with major energy users pursuing their own decarbonisation strategies. Examples include working with NZ Steel to look at options around interruptibility and with the HW Richardson Group to assess a trial use of hydrogen for heavy transport. These have the potential to lead to large scale sources of new demand,” Mr Fuge said.

“With all new supply contracts, we are looking to build in demand response. This is of high value to Contact, our industrial customers and ultimately New Zealand. These initiatives will contribute to the decarbonisation of New Zealand whilst improving the security of supply at peak periods. We have been positively surprised by the customer appetite - from retail customers to large industrials - for demand response mechanisms to be packaged into new contracts,” said Mr Fuge.

“Significant new electricity demand is also now emerging in New Zealand, with new large scale 24/7 data centres. Hyperscale data centre projects announced by the likes of CDC, Microsoft and DCI are starting to come online and will see significant contributions to electricity demand over the next few years as each project stage reaches completion.”

Rio Tinto is looking to continue operating its unique low carbon smelter at Tiwai Point beyond 2024. Contact is engaging constructively and working toward new commercial arrangements.

Renewable development

Contact has been granted new consents to operate on the Wairākei geothermal field for the next 35 years. This enables it to proceed with replacing the 1950s-built Wairākei A and B power stations with a new station of up to 180MW at Te Mihi – the GeoFuture project. Contact is targeting a final investment decision around the end of this calendar year.

“This is an exciting milestone for Contact, moving our geothermal production off-river, and delivering better environmental outcomes,” said Mr Fuge.

“GeoFuture will be the third major development in five years from Contact’s world-class geothermal development pipeline, with Tauhara and Te Huka Unit 3 well on track for completion in 2023 and 2024 respectively. This is all low carbon, baseload renewable electricity that operates around the clock and is not weather reliant.”

Our joint venture partnership with global solar developer Lightsource bp has been selected by Christchurch Airport to deliver the first stage of its renewable energy precinct, Kōwhai Park – an estimated 170MWp solar farm. Subject to a final investment decision, construction is expected to begin in 2024.

Consenting for another 170MWp solar farm in the North Island is underway and the partnership has land access rights to potentially develop another ~60MWp of solar power.

Decarbonising our portfolio

Contact has announced the successful completion of carbon capture trials at its Te Huka geothermal power station. This gives Contact the option of either reinjecting carbon back into the geothermal reservoir, now a routine part of its Te Huka operation, or harvesting the C02 for commercial use. Contact is working with leading industrial gas supplier BOC, a Linde company, to assess the highest value commercial options for the use of the C02 being captured at its geothermal facilities. This includes pure C02 and combining C02 with hydrogen production for complementary derivative products (e.g. green chemicals).

“We are thrilled with these results. We will see the capture of 10,000 tons of greenhouse gas emissions per annum from Te Huka on an ongoing basis. This can be eliminated through reinjection or potentially used in commercial applications where these align to our decarbonisation strategy,” said Mr Fuge.

In addition, Contact is optimizing the flexibility it can achieve in its geothermal generation portfolio by shifting up to 11GWh of generation on the Wairākei field between the summer and winter periods in 2023. This reduces the need to run thermal generation.

The first half also saw Contact preparing for the planned closure of its 44MW Te Rapa power station in June 2023.

Retail

Mr Fuge said Contact’s retail business has continued with targeted growth in the first half of 2023, with customers on bundled packages up 13% on the prior period.
“We have seen connections increase by more than 20,000 in the half year. We are seeing significant growth in broadband, with connections up 30% on the prior period, and have introduced wireless broadband, providing yet another way for our customers to stay connected at home.”

Contact has expanded its time-of-use offerings, with its Dream Charge plan enabling customers to charge their EVs at home at cheaper night rates. This adds to Contact’s existing time-of-use offer, Good Nights, an initiative that’s proven popular with customers who can access three hours of free power every night from 9pm, shifting their load from peak evening times and thereby reducing the need for peak thermal generation, lowering carbon emissions.

In December, we were recognised at the NZ Compare Awards, winning Power Provider of the Year, Best Customer Support; Power and Best Bundled Plan. The awards recognise excellence and achievement in New Zealand’s broadband, energy and mobile sectos.

Outlook

Looking ahead, Mr Fuge said Contact remains committed to leading the decarbonisation of New Zealand.

“We are excited about the future. We have a clear strategy, strong balance sheet with supportive shareholders and a host of opportunities in front of us to lead the decarbonisation of the New Zealand economy over the next decade.”

[winner69]

I not understand …… CEN report a LOSS and underlying performance pretty miserable lookingbasvwell

http://nzx-prod-s7fsd7f98s.s3-websit...544/388317.pdf

[winner69]

No pay rise this time for those who rely on their dividend income

[BlackPeter]

I not understand …… CEN report a LOSS and underlying performance pretty miserable lookingbasvwell

http://nzx-prod-s7fsd7f98s.s3-websit...544/388317.pdf

Probably just because all these Gen Z girls spent all their money at Glassons ... and have no dollars left to pay the power bills ;

[fish]

I not understand …… CEN report a LOSS and underlying performance pretty miserable lookingbasvwell

http://nzx-prod-s7fsd7f98s.s3-websit...544/388317.pdf

I have felt uneasy about contact for sometime and been selling down .
A conference call is at 10 a.m where I suspect contact will try and tell us this is an aberration and we should look at the long-term future .
Cannot attend this but will be very interested how they try and sell this