Electricity sector leads development of New Zealand’s decarbonised future

Page 1


NEWS RELEASE Electricity sector leads development of New Zealand’s decarbonised future 22 October 2021 – Confirmed investments in new renewable electricity shows the importance of market incentives to help high-emissions sectors reduce reliance on fossil fuels. “The world’s most important climate change conference, COP26, is days away now. New Zealand has bold, farreaching plans to decarbonise the economy, and much can be learnt from the success our sector, and the market, has achieved in replacing fossil fuels with new renewable generation,” said Vince Hawksworth, Mercury Chief Executive. However, Mercury says the market will only be able to produce enough renewable supply to meet future demand if the Government’s policies continue to provide long-term certainty and support capital deployment. “The market is doing its job. As a sector, we are responding to signals to invest in reliable, low-carbon and affordable electricity”, said Hawksworth. “Reduced costs of building new renewable generation and rising carbon prices, via the Emissions Trading Scheme, are continuing to incentivise investment.” “These incentives helped our decision to build New Zealand’s largest windfarm, Turitea, in the Manawatu. The design and location of the farm, the technology deployed, and even the blade types were chosen to achieve the most efficient generation and supply of renewable power. “When fully commissioned it will bring on 840GWh of new renewable electricity a year, enough to power 375,000 EVs on the road”. Hawksworth said the goalposts for renewable generation were still moving, as other parts of the economy improved their energy plans. “As a sector, more than 3.8 TWh of new renewable generation will be built between 2020 and 2025, adding close to 10% of new renewable generation to the grid. This remarkable achievement more than delivers against the Climate Change Commission’s recommended contribution from the sector in its final advice to Government. However, we need to keep this momentum up to meet our emissions reduction goals as a country. “To meet the growth in demand and retire fossil fuels, one new windfarm every nine months is required through to 2050 to achieve net zero carbon emissions. Much of the demand is going to come from new EVs on the road with over 1.3 million new vehicles expected by 2035. “Without the right policy settings supporting ongoing renewable generation development, this will test the market’s capacity to meet demand. Mercury is up for the challenge as we know the market has a proven history of responding quickly and effectively to deliver new generation. “Joined-up policy thinking and certainty from Government that supports long-term capital deployment is required. Decisions that undermine the balance of risk and reward and chill investment in generation risk undermining New Zealand’s broader ambitions on decarbonisation. “We’re encouraged by our recent dialogue about carefully managing the transition to renewable energy as efficiently and effectively as possible. We stand ready to support New Zealand’s ambition for a low carbon economy.”

ENDS Howard Thomas General Counsel and Company Secretary Mercury NZ Limited For investor relations queries, please contact: Tim Thompson Head of Treasury and Investor Relations 0275 173 470

For media queries, please contact: Shannon Goldstone Head of Communications 027 210 5337 media@mercury.co.nz

ABOUT MERCURY NZ LIMITED Mercury’s mission is energy freedom. Our purpose is to inspire New Zealanders to enjoy energy in more wonderful ways and our goal is to be New Zealand’s leading energy brand. We focus on our customers, our people, our partners and our country; maintain a long term view of sustainability; and promote wonderful choices. Mercury is energy made wonderful.

Visit us at: www.mercury.co.nz