- Genesis continued to support its customers in the lockdown period.
- Total customer demand was down by 6% in the retail business, while average portfolio costs were down by 37% within the wholesale segment of Genesis in Q1 FY22.
- Genesis is also supporting its JV partners in maintaining supply in coming years.
Within the retail segment, total demand from customers declined 6% due to the COVID-19 lockdown and warmer winter conditions.
The residential market was least impacted with demand down by 1.5%. Net customer churn witnessed a drop of 14% in the quarter, led by a decline in home moving and could increase when lockdown curbs are relaxed. In addition, LPG customer connections saw an 8.6% rise on pcp, but sales volumes had been flat because of lower consumption by businesses.
Image source: © 2021 Kalkine Media, Data source- Refinitiv
The Group’s wholesale business fared well. GNE’s gas swaps with industrial producers and enhanced hydrology permitted the Company to produce at a lower cost. Genesis’ average portfolio fuel costs were lower by 37% to $64/MWh in the first quarter, compared to Q4 FY21.
Genesis also began with the second stage of a $15-million upgrade of the Tekapo B power station. The replacement of unit runners is likely to offer a 2.5% rise in efficiency for the 800GWh station. Genesis also accomplished 2 MOUs with solar developers for its goal of producing 500MW of grid-scale solar by 2025.
Genesis and Kupe joint venture recently completed the Kupe Inlet Compression project, which enabled the station to return to a full capacity production of 77PJ per day. Extra gas will help in the better utilisation of Huntly Unit 5 and encourage industrial consumers.
The joint venture partners are also examining the possibility of drilling another development well at Kupe to further increase recovery from the field.
On 26 October, GNE ended the trading session at $3.24, up 0.15% from its previous close.
Genesis is likely to enjoy benefits from the high crude prices with 38% of the upcoming production unhedged. Natural gas is an important fuel in NZ’s transition to a low-carbon future.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)