QUARTERLY OPERATIONAL UPDATE Three months ended 30 June 2022
>> QUARTERLY HIGHLIGHTS
WIND DRIVES GENERATION UPLIFT
LAKE TAUPO STORAGE HIGH
ENERGY YIELDS LIFTING
WIND PRODUCTION HITS
LAKE TAUPO 80% FULL
YIELDS LIFT ACROSS
1,269GWH LIFTING ANNUAL
FOLLOWING WET START
ALL SEGMENTS
GENERATION TO 7,499GWH
TO WINTER
>> COMMENTARY A wet June across NZ saw Lake Taupo inflows reach the 95th percentile and 71% full at the end of the financial year. Wetter conditions in July lifted Lake Taupo storage further to 80% full, positioning Mercury hydro generation for FY2023 well. While inflows for the quarter were close to median, the financial year was drier than normal with inflows slightly above the lower similar to FY2021. National electricity demand was relatively weak for the quarter down 1.7% versus Q4 2021 mostly due to lower industrial demand (key contributors being Norske Skog, Panpac, NZ Steel and the Marsden Refinery). On an annual basis, demand trends were also lower with demand falling 1.2% on the FY2021 average. Persistently high thermal fuel costs saw Auckland futures prices hold up in FY2023 and FY2024 at $193/MWh and $183/MWh respectively as at 30 June 2022. Short-term futures prices have eased slightly since financial year end due to strong national inflows and rising storage. Operating statistics now include separate disclosures relating to the newly acquired Trustpower retail business from 1 May. These are reported separately to provide consistency in reporting for FY2022 (except for the Manawa contract for differences which is included in Mercury's buy CFD volumes). Trustpower retail statistics will be aggregated with Mecury's existing disclosures in subsequent quarterly operating reports. Physical sales across all segments lifted in the quarter and for the year with annual mass market volumes dropping 117GWh (Mercury only), offset by higher sales to commercial/industrial customers lifting 367GWh. Average annual yield growth was strong, up $6/MWh in mass markets and $12/MWh in the commercial/industrial segment. Annual sold contract for differences yields also rose by $6/MWh for the year. Trustpower retail electricity volumes for May and June were 333GWh. On the generation front, Mercury generated almost 7,500GWh in FY2022 bolstered by wind generation of 1,269GWh from Turitea North and the ex-Tilt windfarms acquired in August 2021.
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
01
>> MERCURY OPERATING STATISTICS Three months ended 30 June 2022
OPERATING INFORMATION CUSTOMER NUMBERS ('000s ICPs) Electricity connections Gas connections Customers with 2 or more products
VWAP 1 ($/MWh) ELECTRICITY SALES Physical Mass Market Commercial & Industrial Network Losses Physical Purchases Financial End User CfDs Other Sell CfDs Spot Settlement of CfDs Spot Customer Purchases Gas Sales Volume (TJ) ELECTRICITY GENERATION Physical Hydro Geothermal (consolidated) Wind Spot Wind PPA Financial Buy CfDs Spot Settlement of CfDs Net Position
1 2 3 4 5
2 3
4
5
6
5
7
138.08 150.25 125.04 201.26 105.76 106.88 104.95 192.00 201.79
175.63 199.82 182.46 169.07 72.14 105.04 105.04 191.53
321 47 47 Volume (GWh) 1,230 636 594 58 1,288 685 290 395 27 273 1,927 925 647 103 252 676 676 378
Three months ended 30 June 2021
328 45 45 Volume (GWh)
VWAP 1 ($/MWh) 129.27 142.10 113.09
1,205 672 533 56 1,262 846 425 421
287.92 98.15 87.10 109.30 269.63 277.51
31 286
282.02 295.88 264.93
1,317 727 590
210.08 210.08 266.79
779 779 -
12
Twelve months ended 30 June 2022
Twelve months ended 30 June 2021
VWAP 1 ($/MWh)
Volume (GWh)
VWAP 1 ($/MWh)
Volume (GWh)
129.83 144.20 113.52
4,772 2,537 2,235 223 4,995 2,940 1,106 1,834
123.77 139.70 101.15
4,522 2,654 1,868 213 4,735 3,432 1,559 1,873
152.30 98.14 96.42 99.18 141.49 146.98
138.61 161.45 135.86 123.21 63.78 109.66 109.66 153.03
119 1,029 7,499 3,662 2,568 308 961 1718 1,718
193.56 91.75 86.96 95.74 175.21 176.38
166 1,034
180.04 186.94 170.44
6,205 3,611 2,594
139.05 139.05 193.13
1,968 1,968
321
6
VWAP is volume weighted average energy-only price sold to customers after lines, metering and fees Mass market includes residential segments and non time-of-use commercial customers Fixed-price, variable-volume (FPVV) sales to time-of-use commercial customers Excludes spot customer purchases Includes Virtual Asset Swap volumes of 149 GWh for the 3 months ended 30 June 2022 and 149 GWh for the 3 months ended 30 June 2021 and 599 GWh for the 12 months ended 30 June 2022 and 599 GWh for the 12 months ended 30 June 2021. Also includes the Manawa CFD volumes relating to the Trustpower retail transaction since May 2022.
6 7
Includes all physical and financial buys and sells except spot customer purchases
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
02
>> TRUSTPOWER RETAIL OPERATING STATISTICS Three months ended 30 June
OPERATING INFORMATION CUSTOMER NUMBERS ('000s ICPs) Electricity connections Gas connections Telecommunication customers Mobile connections Customers with two or more products
ELECTRICITY SALES Physical Mass Market Network Losses Physical Purchases Gas Sales Volume (TJ) Net Position
1
253 48 117 13 129 Volume (GWh)
1
333 333 21 354 236 354
Mass market includes residential segments and non time-of-use commercial customers
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
03
>> MARKET DATA > ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 30 JUNE Financial Year Q4 2022
CONTACT ENERGY GENESIS ENERGY MANAWA ENERGY MERCURY MERIDIAN ENERGY OTHER
Financial Year Q4 2021
10%
7%
20%
23%
29% 31% 17% 23% 3% 19%
14%
4%
Source: Electricity Authority
> SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 30 JUNE (EXCLUDING CFDs) MERCURY OTHER
Financial Year Q4 2022
Financial Year Q4 2021
13%
17%
83%
87%
Source: Mercury Purchases and Transpower SCADA
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
04
> OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS AVERAGE NATIONAL STORAGE FY2022 NATIONAL STORAGE ROLLING 12 MONTH AVERAGE BEN PRICE
FY2021 NATIONAL STORAGE ROLLING 12 MONTH AVERAGE OTA PRICE
4500
$200
4000
$180
3500
$160 $140
2500 $120 2000
$/MWh
GWh
3000
$100
1500
$80
1000
$60
500 0
$40 Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Source: NZX Hydro and NZEM Pricing Manager (NZX)
> TAUPO STORAGE
AVERAGE SINCE 1999
FY2021
FY2022
600
500
GWh
400
300
200
100
0 Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Source: NZX Hydro
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
05
> OTAHUHU ASX FUTURES SETTLEMENT PRICE AS AT 30 JUNE 2021
AS AT 31 DECEMBER 2021
AS AT 31 MARCH 2022
AS AT 30 JUNE 2022
$182.64
$128.46
$162.90
$192.99
$190.71 $143.93
$144.05
$129.70
$/MWh
$150
$149.94
$166.61 $125.05
$200
$170.44
$250
$100
$50
$0 FY22
FY23 Financial Year
FY24
Source: ASX
> BENMORE ASX FUTURES SETTLEMENT PRICE
$/MWh
$157.75
$139.04
$170.06
AS AT 30 JUNE 2022
$105.13
$121.24
$124.13
$163.88
AS AT 31 MARCH 2022
$111.71
$120
$103.41
$140
$129.40
$160
AS AT 31 DECEMBER 2021
$142.57
$180
$151.34
AS AT 30 JUNE 2021
$100 $80 $60 $40 $20 $0 FY22
FY23 Financial Year
FY24
Source: ASX
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
06
> NATIONAL CONSUMPTION (NON-TEMPERATURE ADJUSTED) NATIONAL CONSUMPTION
TIWAI POINT ALUMINIUM SMELTER CONSUMPTION
12,000 10,000
1,251
1,252
1,307
8,865
9,022
8,824
Q4 2017
Q4 2018
Q4 2019
GWh
1,220
1,241
8,418
8,945
8,754
Q4 2020
Q4 2021
Q4 2022
1,223
8,000 6,000 4,000 2,000 0
Source: Transpower Information Exchange
> AUCKLAND CLIMATE SUMMARY ( ⁰C) FINANCIAL YEAR 2022
Q1
Q2
Q3
Q4
12.2
17.8
20.8
15.1
2021
12.3
16.9
19.5
14.8
2020
12.3
16.7
19.5
14.4
2019
12.1
16.3
20.2
14.1
2018
12.3
17.2
20.7
14.3
Historical Average (since 1999)
11.9
16.1
19.4
14.2
Source: Met Service
> MONTHLY TOTAL CONSUMER RETAIL SWITCHING (ICPs) NZ MARKET CHURN (LHS)
ANNUAL NZ MARKET CHURN % (RHS)
50000
25%
45000 40000
20% 15%
25000 20000
10%
% Churn
Monthly ICPs
35000 30000
15000 10000
5%
5000
Jan-22
Jul-21
Jan-21
Jul-20
Jan-20
Jul-19
Jan-19
Jul-18
Jan-18
Jul-17
Jan-17
Jul-16
Jan-16
Jul-15
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
0%
Jul-12
0
Source: Electricity Authority
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
07