NZX 50-Listed Wind Farm Developers - GNE, MCY, MEL

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NZX 50-Listed Wind Farm Developers - GNE, MCY, MEL

 NZX 50-Listed Wind Farm Developers - GNE, MCY, MEL

Summary

  • Wind farm operators have generated huge investor interest on the NZX over the past year.
  • Genesis supports the wind farm sector by securing long-term agreements with wind farm operators, which provide it with the security to commence construction of new sites.
  • Mercury Energy is expected to complete the largest wind farm in New Zealand by late 2021.
  • Meridian is heavily invested in wind farms with 7 full-scale farms across New Zealand and Australia.

As electricity from wind turbines becomes cheaper and more reliable to generate, energy providers are increasingly adapting them to supplement their hydro and thermal generators. The three largest energy producers in NZ have an interest in wind farms.

Interest in wind farms from NZ investors has skyrocketed in the past few years. Illustrating the rise in investor interest, is the performance of Tilt Renewables (NZX:TLT) and NZ Windfarms Limited (NZX:NWF) on the NZX. Over the past 52 weeks, investors have pumped up their share prices 77.0% and 58.4%, respectively.

Source: © Oorka | Megapixl.com

With this as our backdrop, it would be interesting to evaluate the relationship the three largest electricity producers have with wind power and note their plans for building out their capacity in the near future.

Genesis Energy

Genesis Energy Limited (NZX:GNE) was the first energy generator to build a wind farm in New Zealand back in 1996. The 15-turbine wind farm, Hau Nui, is located in the Wairarapa and still in use, producing enough electricity to run 4,200 homes.

Genesis has no plans to build up its portfolio of wind farms. Rather, its support for the technology is manifested via long-term service agreements with wind farm operators. The agreements provide security for the operators to construct and upgrade wind farm sites. In 2019, Genesis signed a 20-year agreement with Tilt Renewables to acquire the electricity from their Waverley Wind Farm.

On 5 February, Genesis Energy last traded at NZ$3.885, rising up by 2.78%.

Mercury Energy

Mercury Energy Limited (NZX:MCY) has been operating the 53-turbine Puketoi wind farm in the Manawatu for almost 10 years, producing an average of 1,272 gigawatt hours annually. The electricity is enough to power 160,000 homes.

It also has a 20.0% stake in Tilt Renewables, which operates 15 wind farms across Australia and New Zealand.

Mercury is currently building the largest wind farm in NZ, Turitea in the Manawatu. The site on which it is being built is considered to be in the top 5% wind generating sites in the world. Mercury plans to instal 60 turbines on the site, which will generate approximately 840 gigawatt hours of electricity per year, enough to power over 200,00 electric cars.

Construction of the wind farm is expected to be completed in late 2021 at a cost of more than a billion dollars.

On 5 February 2021, Mercury NZ closed the trading session flat at NZ$7.15.

Meridian Energy

Meridian Energy Limited (NZX:MEL) operates 5 full-scale wind farms across New Zealand and 2 in Australia, making them the largest NZ supplier of wind-derived power. The seven wind farms in total produce enough electricity to power 316,000 homes annually. 

Meridian has 2 wind farm projects, which are slowly coming down the pipeline. Consents were obtained before 2010 but as it stands, the economic viability of the sites are in question. Meridian requires advancements in turbine and electricity delivery technology, which reduce the risks and costs for the projects to eventually commence construction. Meridian is hopeful that the sites can be utilised in the future.

On 5 February 2021, Meridian Energy last traded at NZ$6.99, up by 0.29%.

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