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Mercury's Waikato hydro scheme pumps out most power since 1996

Wednesday 18th July 2018

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Production from the Waikato hydro scheme reached a 22-year high in the June year just ended.

The scheme, operated by Mercury NZ, delivered 4,947 gigawatt-hours of electricity during the 12 months, the company said in a statement to the stock exchange today. That is almost 5 percent more than the year before and the highest the June 1996 year when the nine power stations below Lake Taupo delivered 5,373 GWh.

Mercury, formerly known as Mighty River Power, was split out of state-owned ECNZ in 1999. The company, which also operates five geothermal plants, has benefited from two consecutive years of high inflows and last year reported record operating earnings of $523 million.

Last month it raised its earnings guidance for a fourth time since October citing the ongoing high inflows. Assuming hydro generation reached 4,900 GWh, it expected full-year earnings before interest, tax, depreciation and changes in financial instruments of $540 million to $555 million.

Mercury shares fell 0.1 per cent to $3.315.

Generation from the Waikato scheme has averaged 4,000 GWh since 1999.

Storage in Lake Taupo has seldom dipped below average during the past year and that extra output more than offset a small reduction in Mercury’s geothermal production. Taupo held the equivalent of 406 GWh of production yesterday, 43 percent more than average, according to NZX Energy data.

Mercury’s total generation rose to a record 7,704 GWh for the year through June, 2.3 percent more than a year earlier. Geothermal production fell about 2 percent to 2,757 GWh.

Low South Island hydro storage – and high wholesale electricity prices – last winter and during the summer, saw the firm’s average generation price rise to $86.19/MWh for the June year, from $57.93/MWh a year earlier.

(BusinessDesk)

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