Is New Zealand on the right path to become a zero-carbon country?

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 Is New Zealand on the right path to become a zero-carbon country?
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Highlights

  • New Zealand has committed to becoming a zero-carbon country by 2050.
  • The Climate Change Commission’s report stated that the Government was making good progress on emission reduction but more action was needed.
  • Genesis, Contact, Meridian and Z Energy are few NZX-listed energy companies that are taking steps towards decarbonisation.

Carbon and other greenhouse gas emissions are one of the most urgent challenges faced by countries today. It is also the key driver of climate change, which can have physical, ecological and health impacts.

NZ has pledged to reach net-zero emissions by 2050 and has committed to lower biogenic methane emissions between 24-47% by 2050.

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The Climate Change Commission’s report released in June confirmed that New Zealand was showing good progress in lowering emissions. However, the Commission advised that more action was required then.

Amid this backdrop, let’s have a look at how these 5 NZX-listed energy stocks have been performing.

Genesis Energy Limited (NZX:GNEASX:GNE)

Genesis Energy is the biggest energy retailer across New Zealand.

The Company has recently signalled at adding solar to its renewable generation portfolio. Genesis has also entered into a long-term renewable electricity agreement with Contact Energy recently. Contact will supply renewable electricity to GNE from 2025 for 15 years, under the deal, which will help Genesis in reducing at least 1.2 million tonnes of annual carbon emissions by 2025.

RELATED READ: Is future of NZX renewable energy stocks promising?

GNE’s shares closed at $3.345 on 24 August with an uptrend of 0.3%.

Contact Energy Limited (NZX:CENASX:CEN)

Contact Energy is NZ’s sustainable privately owned energy company.

Contact posted a strong performance in FY21 to support renewable generation investment. The firm entered into a gas tolling deal with Nova Energy to use CEN’s more cost-effective thermal production to help lower carbon emissions. It has also entered into a power purchase agreement with Genesis Energy to help lower the country’s dependency on fossil fuels.

ALSO READ: What is New Zealand’s energy mix? How does it plan to reduce carbon footprint?

CEN also launched Contact26 strategy directed towards leading NZ’s decarbonisation.

CEN’s shares closed at $8.34 on 24 August with an uptrend of 1.71%.

 Meridian Energy Limited (NZX:MELASX:MEZ)

Meridian is a renewable electricity generation company.

Meridan’s monthly total inflows were 156% of the historical average for July 2021 with the month witnessing the second-highest July Waitaki catchment inflows on record. The firm’s NZ generation was 1.5% higher in July 2021 than the same month in 2020, indicating higher hydro and lower wind generation.

MEL’s shares ended the trading session at $5.15 on 24 August, down by 2.46%.

Mercury NZ Limited (NZX:MCYASX:MCY)

Mercury is an electricity generation and retailing company.

The Group delivered a resilient performance in FY21 while declaring 2 big takeovers of Tilt Renewables and Trustpower, to increase the company’s scale and competencies.

 ALSO READ: Do G7 nations favour investment in fossil fuels over green energy?

MCY is due to pay a final dividend of 10.2cps on 30 September 2021, bringing FY21 dividend to 17cps.

MCY’s shares closed at $6.99 on 24 August with an uptrend of 2.49%.

Z Energy Limited (NZX:ZELASX:ZEL

Z Energy is a Kiwi fuel transport company for retail and commercial clients.

ZEL plans to optimise its core business to deliver strong returns to shareholders while also transitioning into a low-carbon future.

It emphasised that how Z’s exit from the crude oil supply chain and movement to import terminal will free up about $150 million of extra working capital, which will be used in lowering carbon emissions.

RELATED READ: Here’s a look at 9 NZX-listed energy stocks pursuing climate change goals

It has estimated its EBITDA to be between $270 million to $310 million for FY22.

ZEL’s shares ended the trading session at $3.42 on 24 August, down by 1.72%.

 (NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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