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Highlights
- Mercury NZ provided an operational update for Q3 2021 and also on the Tararua Wind Farm.
- Mercury’s hydro generation stayed below average in Q3 2021, and geothermal generation also declined in the quarter.
- The Group informed that five of the adjacent turbines that had been paused have resumed services after one turbine caught fire.
Mercury NZ Limited (NZX:MCY), an electricity producer and retailer, provided an operational update for the 3 months ended 30 September 2021.
Hydro generation remained down and below average in the quarter at 953GWh due to below-average Waikato catchment inflows at 34th percentile. However, the Group boosted Lake Taupo hydro storage that ended the quarter at 403GWh (45GWH above average).
Image source: © 2021 Kalkine Media, Data source- Refinitiv
Average spot prices stayed high at $149/MWh at Otahuhu and $123/MWh at Benmore compared to $136/MWh and $125/MWh, respectively, in Q1 FY21. Prices trended down in the quarter as the national hydro storage rose because of high South Island hydro inflows.
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Geothermal generation, on the other hand, saw a decline of 80 GWh to 607 GWh in the quarter due to a 44-day impromptu outage ending 20 July at the Kawerau power station.
Customers remained stable but demand was reduced
Customer numbers stayed stable at 328K over the quarter, ending a trend of declining market share as the Group reduced customer losses through various initiatives.
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Temperature-adjusted demand witnessed a decline in the quarter by 0.9% with cutbacks in the industrial (-0.8%), irrigation (-0.2%), and other sectors being compensated by an increase in the urban sector.
Industrial demand also stayed low due to the shutdown of the Norske Skog Tasman mill at the start of the quarter, partially compensated by an increase in the Marsden Point refinery demand due to a six-week shutdown in pcp.
Tararua Wind Farm Update
Mercury notified on 19 October that all 5 wind turbines adjacent to the turbine that caught fire were functioning well. The firm stated that investigations were also underway to know the reason of the fire and the company was contemplating options to repair the damaged turbine.
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On 6 October, MCY informed that one of its turbines at Tararua wind farm 3 of the Group is emitting smoke due to a localised fire on the turbine. An immediate investigation was started and turbines in that area had been paused temporarily.
On 20 October, at the time of writing, MCY was trading at $6.09, down by 0.98%.
Bottom Line
Mercury is working carefully to build a pipeline of new renewables and is keen to contribute to the goal of net-zero carbon emissions by 2050.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)
