MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE
Three months ended 30 June 2021
>> QUARTERLY HIGHLIGHTS
GENERATION | SPOT PRICES | HEDGE |
VOLUMES | PURCHASES | |
ELEVATED | ||
FALL | LIFT | |
PHYSICAL GENERATION DOWN | ELEVATED Q4 SPOT PRICES REFLECT | CFD PURCHASES INCREASE BY 315GWh |
85GWh IN THE QUARTER, | SHORT-TERM FUEL CONSTRAINTS, | VERSUS PCP AS MERCURY |
126GWh ACROSS THE FULL-YEAR | FUTURES PRICES EASING | MITIGATES PRICE RISK |
>> COMMENTARY
HYDRO GENERATION DOWN AS LOW INFLOWS PERSIST; GEOTHERMAL GENERATION IMPACTED BY KAWERAU OUTAGE
Mercury's hydro generation in FY2021-Q4 of 727GWh (193GWh below average1) equalled the prior comparable period for the lowest level of hydro generation in company history. This was due to sustained dry hydrology that saw Waikato catchment inflows at the 13th percentile2 for the quarter and at the 16th percentile3 for FY2021. Consequently, hydro storage in Lake Taupo ended the year at 143GWh below average2.
Geothermal generation decreased from 675GWh in FY2020-Q4 to 590GWh in the most recent quarter due to an unplanned outage at the Kawerau power station that started on 7 June. The station is currently expected to return to service this week.
ELEVATED PRICES REFLECT CURRENT FUEL CONSTRAINTS WITH FUTURES EASING
Average spot prices in the quarter reflected low national hydro storage and continued gas deliverability issues, increasing to $277/MWh at Otahuhu and $261/MWh at Benmore from $115/MWh and $102/MWh respectively in FY2020-Q4. Elevated prices were also seen in Mercury's CFD purchases for FY2021-Q4 which increased by 315GWh, from 464GWh in FY2020-Q4 to 779GWh, to mitigate price risk from decreased physical generation.
Futures prices eased during the quarter due to a lift in national hydrology towards the end of June. FY2022 futures prices d ecreased from $193/MWh and $177/MWh at Otahuhu and Benmore at the start of the quarter to $170/MWh and $151/MWh respectively by the end of the quarter, with a subsequent further reduction to $144/MWh and $122/MWh as at 16 July 2021.
COMMERCIAL & INDUSTRIAL SALES LIFT AS MERCURY POSITIONS PORTFOLIO
Notwithstanding elevated spot prices, Mercury continued to engage with customers seeking to re -contract resulting in Commercial & Industrial segment sales (including both physical and financial) increasing by 227GWh, from 731GWh in FY2020-Q4 to 958GWh in FY2021- Q4. The Commercial & Industrial sales yield increased by 9.1% from $93/MWh in FY2020-Q4 to $102/MWh in FY2021-Q4.
Customer numbers continued to decrease, dropping by 3,000 across the quarter to 328,000. This was reflected in Mass Market s ales volumes which decreased by 63GWh to 672GWh versus 735GWh in the same quarter last year.
DEMAND IN Q4 LIFTS VERSUS COVID-19 LOCKDOWN AFFECTED PCP; DEMAND IN QUARTERS 1 -3 DECREASES
Temperature-adjusted demand in FY2021-Q4 increased by 5.8% as the prior comparable period was affected by the COVID-19 Level 4 lockdown. Increases were seen across all sectors, with contributions from each sector being: urban (+2.5%), rural (+1.0), in dustrial (+1.2%), dairy (+0.8%) and irrigation (+0.3%).
The recovery in Q4 drove full-yeartemperature-adjusted demand up by 1.0%. Excluding this period, demand in the first three quarters in FY2021 decreased by -0.6% versus the same quarters in FY2020, largely driven by reduced industrial demand due to production cuts at the Tiwai Point aluminium smelter, Norske Skog's Kawerau mill and the Marsden Point refinery.
- For quarters ended 30 June since 1999
- For quarters ended 30 June since 1927
- For 12-month periods ended 30 June since 1927
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE | 01 |
>> OPERATING STATISTICS
OPERATING INFORMATION | Three months ended | Three months ended | Twelve months ended | Twelve months ended | ||||||||
30 June 2021 | 30 June 2020 | 30 June 2021 | 30 June 2020 | |||||||||
ELECTRICITY CUSTOMERS | 328 | 348 | ||||||||||
('000s ICPs) | ||||||||||||
North Island Customers | 291 | 307 | ||||||||||
South Island Customers | 37 | 41 | ||||||||||
Dual Fuel Customers | 45 | 47 | ||||||||||
VWAP 1 | Volume | VWAP 1 | Volume | VWAP 1 | Volume | VWAP 1 | Volume | |||||
($/MWh) | (GWh) | ($/MWh) | (GWh) | ($/MWh) | (GWh) | ($/MWh) | (GWh) | |||||
ELECTRICITY SALES | ||||||||||||
Physical | 129.27 | 1,205 | 124.20 | 1,108 | 123.77 | 4,522 | 118.45 | 4,361 | ||||
Mass Market | 2 | 142.10 | 672 | 136.45 | 735 | 139.70 | 2,654 | 130.84 | 2,892 | |||
Commercial & Industrial | 3 | 113.09 | 533 | 100.05 | 373 | 101.15 | 1,868 | 94.05 | 1,469 | |||
Network Losses | 56 | 54 | 213 | 213 | ||||||||
Physical Purchases | 287.92 | 1,262 | 128.97 | 1,163 | 193.56 | 4,735 | 115.14 | 4,573 | ||||
4 | ||||||||||||
Financial | 98.15 | 846 | 86.00 | 807 | 91.75 | 3,432 | 83.63 | 3,377 | ||||
5 | ||||||||||||
End User CfDs | 87.10 | 425 | 85.79 | 358 | 86.96 | 1,559 | 82.15 | 1,323 | ||||
Other Sell CfDs | 6 | 109.30 | 421 | 86.16 | 449 | 95.74 | 1,873 | 84.59 | 2,054 | |||
Spot Settlement of CfDs | 269.63 | 109.24 | 175.21 | 101.15 | ||||||||
Spot Customer Purchases | 277.51 | 31 | 117.16 | 183 | 176.38 | 166 | 104.12 | 747 | ||||
ELECTRICITY GENERATION | ||||||||||||
Physical | 282.02 | 1,317 | 121.59 | 1,402 | 180.04 | 6,205 | 109.51 | 6,331 | ||||
Hydro | 295.88 | 727 | 134.90 | 727 | 186.94 | 3,611 | 117.03 | 3,712 | ||||
Geothermal (consolidated) | 7 | 264.93 | 590 | 107.42 | 675 | 170.44 | 2,594 | 98.91 | 2,619 | |||
Financial | 210.08 | 779 | 84.28 | 464 | 139.05 | 1968 | 83.69 | 1,478 | ||||
Buy CfDs | 6 | 210.08 | 779 | 84.28 | 464 | 139.05 | 1968 | 83.69 | 1,478 | |||
Spot Settlement of CfDs | 266.79 | 113.97 | 193.13 | 98.81 | ||||||||
PORTFOLIO LWAP/GWAP | 8 | 1.02 | 1.01 | 1.01 | 1.02 | |||||||
- 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
- Excludes FTR and trading ASX positions (including positions held to maturity which were previously disclosed in CfD volumes)
- Includes Virtual Asset Swap volumes of 149 GWh for the 3 months ended 30 June 2021 and 149 GWh for the 3 months ended 30 June 2020 and of 599 GWh for the 12 months ended 30 June 2021 and 601 GWh for the 12 months ended 30 June 2020
- Includes Mercury's 65% share of Nga Awa Purua generation
- Includes all physical and financial buys and sells except spot customer purchases
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE | 02 |
- MARKET DATA
- ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 30 JUNE
MERCURY | Financial Year Q4 2021 | Financial Year Q4 2020 | |||
MERIDIAN ENERGY | |||||
CONTACT ENERGY | |||||
GENESIS ENERGY | |||||
TRUSTPOWER / TILT | 8% | 13% | 7% | ||
OTHER | 15% | ||||
4% | 4% | ||||
18% | |||||
23% | |||||
29% |
35%
21%
23%
Source: Electricity Authority
> SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 30 JUNE (EXCLUDING CFDs)
MERCURY | Financial Year Q4 2021 | Financial Year Q4 2020 |
OTHER | ||
13% | 14% |
87% | 86% |
Source: Mercury Purchases and Transpower SCADA
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE | 03 |
> OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS
AVERAGE NATIONAL STORAGE | FY2020 NATIONAL STORAGE | |
FY2021 NATIONAL STORAGE | ROLLING 12 MONTH AVERAGE OTA PRICE | |
ROLLING 12 MONTH AVERAGE BEN PRICE |
6,000 | $200 | ||||||||||||
5,000 | $180 | ||||||||||||
$160 | |||||||||||||
4,000 | $140 | ||||||||||||
GWh | 3,000 | $120 | $/MWh | ||||||||||
2,000 | $100 | ||||||||||||
$80 | |||||||||||||
1,000 | $60 | ||||||||||||
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 | FY2020 | FY2021 | ||||||||||
600 | ||||||||||||
500 | ||||||||||||
400 | ||||||||||||
GWh | 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 | 04 |
> OTAHUHU ASX FUTURES SETTLEMENT PRICE
$250 | AS AT 30 JUNE 2020 | AS AT 31 DECEMBER 2020 | AS AT 31 MARCH 2021 | |||||||||
$187.52 | $184.24 | $193.18 | $170.44 | |||||||||
$200 | ||||||||||||
$/MWh | $150 | $114.01 | $135.59 | $95.65 | $119.06 | |||||||
$100 | ||||||||||||
$50 | ||||||||||||
$0 | ||||||||||||
FY21 | FY22 | |||||||||||
Source: ASX | Financial Year | |||||||||||
> BENMORE ASX FUTURES SETTLEMENT PRICE | ||||||||||||
AS AT 30 JUNE 2020 | AS AT 31 DECEMBER 2020 | AS AT 31 MARCH 2021 | ||||||||||
$160 | $174.84 | $173.13 | $177.01 | $151.34 | ||||||||
$200 | ||||||||||||
$180 | ||||||||||||
$/MWh | $140 | $104.40 | $120.57 | $79.83 | $100.69 | |||||||
$120 | ||||||||||||
$100 | ||||||||||||
$80 | ||||||||||||
$60 | ||||||||||||
$40 | ||||||||||||
$20 | ||||||||||||
$0 | ||||||||||||
FY21 | FY22 | |||||||||||
Financial Year |
Source: ASX
AS AT 30 JUNE 2021
$143.18 | $144.05 |
$92.56 | $103.11 |
FY23
AS AT 30 JUNE 2021
$125.69 | $124.13 |
$75.74 | $82.16 |
FY23
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE | 05 |
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Mercury NZ Limited published this content on 19 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 July 2021 22:09:06 UTC.
