Genesis mothballs second Huntly unit earlier than expected

Friday 27th September 2013

Genesis Energy is to mothball the second of four generating units at its ageing Huntly power station more than a year earlier than previously signalled as flat demand and a surge in new, lower cost generation has made it surplus to requirements.

Genesis spokesman Richard Gordon said the decision was made after observing that, even with a severe drought earlier this year, the so-called "third unit" had run very little.

The company had previously talked about taking the unit out of commission some time between the end of next year and the first half of 2015. Genesis is slated for partial privatisation early next year, assuming the Meridian Energy partial sale is a success.

Keeping each of Huntly's 32-year-old 250 Megawatt gas or coal-fired units available to the market cost the company tens of millions of dollars a year and while the unit to be retired could still be brought back into service within 90 days, chief executive Albert Brantley said in a statement that would only be "under exceptional circumstances."

Genesis has already mothballed the fourth unit at the 1,000MW station.

The Huntly plant has long been a drain on Genesis's financial performance, with previous management keeping it available as a back-up to prevent winter black-outs during periods of low rainfall.

However, on Brantley's watch, Genesis has insisted the plant has to pay its way commercially. Substantial new generation has come on stream in recent years, including several baseload geothermal plants in the central North Island.

The first of Huntly's four units was placed in storage in December last year.

BusinessDesk.co.nz

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