Quarterly Operational Update Three months ended 30 June 2016 QUARTERLY HIGHLIGHTS
Record
GEOTHERMAL GENERATION for FY16, up 2% on the previous year
4
down for Q4 reflecting the renewal price of commercial contracts
ENERGY PRICE
1.03
LWAP/GWAP
for FY16 reflected low wholesale price volatility and locational price differences
COMMENTARY
HIGHEST ANNUAL GEOTHERMAL PRODUCTION IN COMPANY HISTORY
Geothermal generation for FY16 was the Company’s highest ever at 2,830GWh (up 2% on FY15) due to availability of 95.5% over the year and the impact of the turbine replacement at Nga Awa Purua. For the quarter, geothermal generation was down slightly on pcp to 702GWh, due to maintenance activity at Ngatamariki. Total hydro generation for FY16 was up 16% from FY15 to 3,866GWh – this however was below the annual average of 4,000GWh due to inflows being 34th percentile for the year. During the quarter, national storage increased to 29% above average at 30 June, which contributed towards flat wholesale prices. The LWAP/GWAP ratio for the 12 months ended 30 June was 1.03, with lower wholesale price volatility impacting both generation prices (GWAP) and purchase prices (LWAP). The relative difference between LWAP and GWAP is also impacted by locational price differences which are not expected to return to historic levels due to recent thermal plant closures in the upper North Island. ENERGY PRICE DOWN; COMMERCIAL VOLUMES UP
A lift in overall sales volumes reflected higher commercial contracting activity as prices temporarily improved from levels earlier in the year. However new sales contracts contributed to a fall in the average energy price to customers by 4% to $117.58/MWh as these new commercial contracts replaced those that matured. As previously communicated, a large proportion of these higher-priced contracts were signed between FY2011 and FY2013. The Company’s focus on rewarding customer loyalty, with initiatives such as free electricity days (Good Energy Days), contributed towards higher customer satisfaction scores compared to other major retailers. The average percentage of Mercury customers rating as ‘highly satisfied’ over the last 12 months was 61%. Customer churn was favourably impacted by the proportion of Mercury residential customers on fixed price contracts increasing to 42% at year-end (up from 35% at the same time last year), as some customers took up the offer of a 2-year fixed-price offer in preference to an increase in energy pricing. NATIONAL DEMAND FLAT ON PCP; UP YEAR ON YEAR
When adjusted for warmer temperatures, national demand for electricity was flat (-0.1%) for the quarter compared with pcp. Adjusted demand for the financial year was up 0.6% on FY15. This is the second consecutive financial year that demand has increased.
Mighty River Power will release its financial results for the 12 months ended 30 June 2016 on 23 August 2016. The analyst briefing will be held at 11am on the day – more details to come
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
01
OPERATING STATISTICS
Three months ended 30 June 2016
Operating Information Electricity Sales FPVV sales to customers
Twelve months ended 30 June 2016
Twelve months ended 30 June 2015
VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
117.58
1,137
122.22
1,109
114.83
4,397
117.21
4,486
FPVV sales to residential customers FPVV sales to business customers FPVV purchases from market Spot customer purchases Total NZEM Purchases
Three months ended 30 June 2015
65.61
610
667
2,438
2,497
527
442
1,959
1,989
1,200
1,168
4,643
4,717
210
335
950
1,388
1,410
65.11
1,503
Electricity Customers (000)
376
382
North Island Customers
339
348
South Island Customers
37
34
Dual Fuel Customers
41
65.41
5,593
76.26
6,104
40 Volume (GWh)
Volume (GWh)
Volume (GWh)
Volume (GWh)
Buy CfD
447
412
1,741
1,697
Sell CfD
735
876
3,408
3,384
339
392
1,448
1,623
Contracts for Difference
End User CfD Net Sell CfD
2
288
Electricity Generation Hydro
Geothermal (consolidated)
Geothermal (equity accounted) Total
4
1,667
1,686
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
68.33
809
66.76
864
64.84
3,866
77.82
3,327
-
-
89.08
75
68.64
146
84.58
464
60.67
642
58.70
670
60.84
2,596
70.63
2,545
61.54
60
61.24
53
61.44
234
71.94
227
64.81
1,511
64.34
1,661
63.29
6,842
75.30
6,563
Gas 3
464
VWAP ($/MWh)
1.01
LWAP/GWAP Gas Purchases 5
Retail purchases
1.01
$/GJ
PJ
$/GJ
1.03 PJ
1.01
$/GJ
PJ
$/GJ
PJ
6.34
0.27
9.25
0.31
8.07
1.01
9.22
1.08
Generation purchases Carbon Emissions (‘000 tonnes CO2e)
-
-
5.90
0.88
6.21
1.70
5.90
4.72
92
125
Metrix AMI Meters (000)
396
388
428
647
1.
VWAP is volume weighted average energy only price sold to FPVV customers after lines, metering and fees
2.
Includes Virtual Asset Swap volumes in both Buy and Sell CfD volumes of 174 GWh for the 3 months ended 30 June 2016 and 174 GWh for the 3 months ended 30 June 2015 and of 701 GWh for the 12 months ended 30 June 2016 and 699 GWh for the 12 months ended 30 June 2015
3.
Includes Mighty River Power’s 65% share of Nga Awa Purua generation
4.
Tuaropaki Power Company (Mokai) equity share
5.
Prices exclude fixed transmission charges
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
02
MARKET DATA
ELECTRICITY GENERATION BY COMPANY FOR THE TWELVE MONTHS ENDED 30 JUNE Mighty River Power Meridian Energy Contact Energy Genesis Energy TrustPower Other
16%
33%
23%
16%
5%
7%
5%
6%
Financial Year 2015
17%
34%
22%
16%
Financial Year 2016
Source: Electricity Authority
SHARE OF ELECTRICITY SALES (GWh) FOR THE TWELVE MONTHS ENDED 30 JUNE
Mighty River Power Other
15%
85%
Financial Year 2015
14%
86%
Financial Year 2016
Source: Mighty River Power Purchases and Transpower SCADA
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
03
OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS Storage national average
FY 2016
FY 2015
Rolling 12 month average OTA price
4000
80
3500 3000
75
2000
70
$/MWh
GWh
2500
1500 1000
65
500 0
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
60
TAUPO STORAGE Average since 1999
FY 2016
FY 2015
600
500
GWh
400
300
200
100
0
Jul
Aug
Sep
Oct
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
04
OTAHUHU ASX FUTURES SETTLEMENT PRICE As at 30 June 2015 As at 31 December 2015 As at 31 March 2016 As at 30 June 2016 100 90 80
$/MWh
70
$76.03
$73.07 $65.21
$80.08
$80.06 $74.23
$71.49
$73.93
$76.66 $77.88
$81.16
$78.05 $79.59
$65.11 $64.77
60 50 40 30 20 10 0
FY16
FY17
FY18
FY19
Financial Year
BENMORE ASX FUTURES SETTLEMENT PRICE As at 30 June 2015 As at 31 December 2015 As at 31 March 2016 As at 30 June 2016 100 90 $76.05
80 70
$/MWh
60
$69.33
$68.51 $59.00
$75.64 $67.30
$63.70
$66.95
$71.54 $72.75
$76.10
$73.03 $74.79
$57.87 $57.15
50 40 30 20 10 0
FY16
FY17
FY18
FY19
Financial Year
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
05
NATIONAL CONSUMPTION (NON-TEMPERATURE ADJUSTED) Tiwai Point Aluminium Smelter consumption
National consumption
12,000
9,964
10,038
9,861
9,693
8,619
8,834
8,665
8,458
10,000
10,033
9,854
8,778
8,593
GWh
8,000 6,000 4,000 2,000 0
1,345
1,204
1,196
1,235
1,255
1,261
Q4 11
Q4 12
Q4 13
Q4 14
Q4 15
Q4 16
Financial Year Source: Transpower Information Exchange
NATIONAL CLIMATE SUMMARY
Financial Year
Q1 (째 C)
Q2 (째 C)
Q3 (째 C)
Q4 (째 C)
2016
11.4
16.0
20.6
15.3
2015
11.9
15.9
19.9
14.3
2014
12.3
16.7
18.9
14.8
2013
12.3
16.5
19.6
14.4
2012
11.5
16.6
18.9
14.0
Historical Average (since 1999)
11.9
16.1
19.4
14.2
Source: NIWA, Met Service
CONSUMER RETAIL SWITCHING NZ Market Churn (LHS)
Mar 16
Jul 15
Nov 15
Mar 15
Jul 14
Nov 14
Mar 14
Jul 13
Nov 13
Mar 13
Jul 12
Nov 12
Mar 12
Jul 11
Nov 11
% Churn
0%
Mar 11
0
Jul 10
5%
Nov 10
10,000
Mar 10
10%
Jul 09
20,000
Nov 09
15%
Mar 09
30,000
Jul 08
20%
Nov 08
40,000
Mar 08
25%
Jul 07
50,000
Nov 07
Monthly ICPs
Annual NZ Market Churn % (RHS)
Source: Electricity Authority
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
06