1 00:00:00,080 --> 00:00:02,800 Speaker 1: Let's go to some operating reports from power companies. I 2 00:00:02,840 --> 00:00:04,800 Speaker 1: know how sexy does that sound? Don't worry. It is 3 00:00:05,600 --> 00:00:08,080 Speaker 1: been some very interesting tidbits in the latest reports from 4 00:00:08,080 --> 00:00:11,879 Speaker 1: both Contact and Genesis. First interesting thing is water hydro 5 00:00:12,000 --> 00:00:14,560 Speaker 1: storage up, meaning we've got good supply to power the grid. 6 00:00:14,640 --> 00:00:18,160 Speaker 1: Second interesting thing prices, not necessarily the retail price, but 7 00:00:18,280 --> 00:00:20,800 Speaker 1: Ford prices falling by as much as fifty percent in 8 00:00:20,840 --> 00:00:23,759 Speaker 1: the past two weeks. Was this mean? Malcolm John's is 9 00:00:23,840 --> 00:00:26,920 Speaker 1: Genesis Energy chief executive with me tonight, Malcolm Good evening, 10 00:00:27,760 --> 00:00:28,280 Speaker 1: Good evening. 11 00:00:28,360 --> 00:00:30,360 Speaker 2: Operating reports are always sexy, Ryan. 12 00:00:30,680 --> 00:00:33,760 Speaker 1: You have to say that, you have to say that, Hey, 13 00:00:33,840 --> 00:00:36,559 Speaker 1: tell us what's going so? Hydro is this? Are we 14 00:00:36,640 --> 00:00:38,600 Speaker 1: in a better position than we would normally be? 15 00:00:39,720 --> 00:00:43,360 Speaker 2: Yes. The short answer is yes. We've had fairly consistent 16 00:00:43,920 --> 00:00:48,720 Speaker 2: rain events in the key catchments since really the end 17 00:00:48,720 --> 00:00:52,600 Speaker 2: of spring last year, and we started spilling Lake Tekapo 18 00:00:52,920 --> 00:00:56,240 Speaker 2: in November because it was it was at its maximum, 19 00:00:56,880 --> 00:00:59,560 Speaker 2: and others around the system are also in a position 20 00:00:59,600 --> 00:01:02,800 Speaker 2: now they're having to spill their lakes as well. So 21 00:01:03,480 --> 00:01:06,479 Speaker 2: it's a regularity of rain. Notwithstanding the rain event that's 22 00:01:06,520 --> 00:01:09,480 Speaker 2: just been through the Upper North Island. Over the last 23 00:01:09,480 --> 00:01:11,960 Speaker 2: twenty four hours or so. It's the consistency of the 24 00:01:12,080 --> 00:01:14,000 Speaker 2: rain events that have led to the position we're in. 25 00:01:14,360 --> 00:01:15,960 Speaker 1: Does that mean that we're going to be all good 26 00:01:15,959 --> 00:01:16,400 Speaker 1: for winter? 27 00:01:18,200 --> 00:01:21,640 Speaker 2: Look, basically, it's between six and eight weeks between a 28 00:01:21,640 --> 00:01:23,920 Speaker 2: wet and a dry sequence in New Zealand, so we 29 00:01:23,959 --> 00:01:26,560 Speaker 2: don't store an enormous amount of water. Less than five 30 00:01:26,600 --> 00:01:29,560 Speaker 2: percent of our total annual demand is stored in water, 31 00:01:30,200 --> 00:01:33,319 Speaker 2: and so it really depends on how it rains over 32 00:01:33,360 --> 00:01:37,440 Speaker 2: the next three to four months. But the key thing 33 00:01:37,520 --> 00:01:41,720 Speaker 2: is the reserve fuel positions are very healthy. Gas storage 34 00:01:42,200 --> 00:01:45,160 Speaker 2: is near the top of its capacity and the coalstock 35 00:01:45,200 --> 00:01:48,440 Speaker 2: pilot Huntley is sitting well over a million tons now. 36 00:01:49,200 --> 00:01:51,480 Speaker 2: So not only do we have our primary fuel in 37 00:01:51,520 --> 00:01:53,760 Speaker 2: a good position, but we have our reserve fuels and 38 00:01:53,880 --> 00:01:55,120 Speaker 2: very good positions as well. 39 00:01:55,480 --> 00:01:57,760 Speaker 1: And the Huntley sorted for ten years right. 40 00:01:59,200 --> 00:02:03,200 Speaker 2: Yes, the contracts that we signed with the other gen 41 00:02:03,280 --> 00:02:06,240 Speaker 2: tailors means that the investment in the ranking units to 42 00:02:06,280 --> 00:02:08,560 Speaker 2: extend their life out to twenty thirty five is now 43 00:02:08,600 --> 00:02:09,359 Speaker 2: well underway. 44 00:02:09,480 --> 00:02:13,320 Speaker 1: Good Now, as you're talking, lots of people are texting 45 00:02:13,440 --> 00:02:16,640 Speaker 1: Malcolm Michael says Ryan. Every January, the Lakes are always 46 00:02:16,639 --> 00:02:20,240 Speaker 1: spilled in order to drive the prices high for winter. True, No, 47 00:02:21,440 --> 00:02:22,320 Speaker 1: So what's going on. 48 00:02:24,120 --> 00:02:27,920 Speaker 2: The volume of water? We have both minimum and maximum 49 00:02:27,919 --> 00:02:31,320 Speaker 2: operating ranges for the lakes. The maximums are driven by 50 00:02:31,360 --> 00:02:35,400 Speaker 2: the hyder dams, and most engineers will tell you that 51 00:02:35,440 --> 00:02:37,959 Speaker 2: water spilling over the top of dams in an uncontrolled 52 00:02:38,000 --> 00:02:40,560 Speaker 2: way is quite dangerous for the stability of the dam, 53 00:02:41,080 --> 00:02:42,960 Speaker 2: and so the spill ways are put in place so 54 00:02:43,000 --> 00:02:46,880 Speaker 2: that when you meet reach the maximum, that you have 55 00:02:46,960 --> 00:02:49,240 Speaker 2: to start spilling the water. And so we didn't spill 56 00:02:49,320 --> 00:02:51,400 Speaker 2: last summer, and I don't think we spilled the summer before. 57 00:02:52,040 --> 00:02:53,440 Speaker 2: But this year we are. 58 00:02:54,120 --> 00:02:58,240 Speaker 1: So we've got water in the lakes, we've got huntly sorted. 59 00:02:58,919 --> 00:03:01,480 Speaker 1: What's going to happen to prime spot prices this winter? 60 00:03:02,880 --> 00:03:06,519 Speaker 2: Well, the forward curve is indicating quite a retreat from 61 00:03:06,520 --> 00:03:09,560 Speaker 2: where we've been in the last couple of winters. And 62 00:03:09,919 --> 00:03:12,680 Speaker 2: the reality of the New Zealand pricing system is that 63 00:03:12,800 --> 00:03:15,920 Speaker 2: over a short short period six to twelve months, you know, 64 00:03:16,000 --> 00:03:18,520 Speaker 2: hydrology and the amount of rain we get when we 65 00:03:18,560 --> 00:03:21,440 Speaker 2: get it as a huge driver of those those spot prices. 66 00:03:22,600 --> 00:03:24,600 Speaker 1: Did you pay any attention Do you pay an attention 67 00:03:24,600 --> 00:03:26,400 Speaker 1: to what's happening in New South Wales. You know that 68 00:03:26,560 --> 00:03:29,680 Speaker 1: big Well, their biggest power plant, coal Find power plant 69 00:03:29,720 --> 00:03:32,120 Speaker 1: over there, they're extending the life for two years. 70 00:03:33,080 --> 00:03:35,800 Speaker 2: We certainly do pay attention to those and we have 71 00:03:35,880 --> 00:03:38,200 Speaker 2: to remember in New Zealand that you know, we've just 72 00:03:38,280 --> 00:03:42,000 Speaker 2: extended the life of Huntley's coal generation by a decade. 73 00:03:42,720 --> 00:03:45,480 Speaker 2: And the reality is that as a small nation where 74 00:03:45,480 --> 00:03:49,000 Speaker 2: our weather is highly correlated, you know, we don't store 75 00:03:49,080 --> 00:03:53,840 Speaker 2: enough water for the lakes to be able to last 76 00:03:54,080 --> 00:03:56,960 Speaker 2: long periods of time without rain, and so we do 77 00:03:57,080 --> 00:04:01,080 Speaker 2: have to have a reserve generation system. Huntley's the majority 78 00:04:01,080 --> 00:04:03,040 Speaker 2: of that, it's about seventy five to eighty percent of that. 79 00:04:03,320 --> 00:04:06,240 Speaker 1: What's the situation with gas? I mean, and everyone says 80 00:04:06,240 --> 00:04:09,000 Speaker 1: we're running out and that we might lose a field 81 00:04:09,080 --> 00:04:12,400 Speaker 1: or two in the coming year. What's the situation and 82 00:04:12,680 --> 00:04:14,800 Speaker 1: what do people need to do to prepare for it? 83 00:04:14,840 --> 00:04:15,520 Speaker 1: What are you saying? 84 00:04:16,360 --> 00:04:19,320 Speaker 2: Well, gas plays two roles in electricity. One is baseload 85 00:04:19,440 --> 00:04:24,560 Speaker 2: or consistent generation, and the second is backup generation for 86 00:04:25,040 --> 00:04:29,440 Speaker 2: cold winter nights and dry periods and the like. And 87 00:04:29,640 --> 00:04:31,880 Speaker 2: with the amount of renewables that all the companies in 88 00:04:31,920 --> 00:04:35,080 Speaker 2: New Zealand the building base load. Gas generation is in 89 00:04:35,240 --> 00:04:39,320 Speaker 2: decline and will ultimately reach an expiring point sometime between 90 00:04:39,320 --> 00:04:42,599 Speaker 2: now in twenty thirty or twenty thirty two. But the 91 00:04:42,680 --> 00:04:47,679 Speaker 2: need for gas as a backup generation fuel for cold 92 00:04:47,720 --> 00:04:51,440 Speaker 2: winter nights, low wind periods, and low rain periods remains. 93 00:04:52,600 --> 00:04:55,720 Speaker 2: I think you know, the gas situation remains challenging. There's 94 00:04:55,720 --> 00:04:57,680 Speaker 2: no two ways about that. It doesn't matter whether you're 95 00:04:57,720 --> 00:05:00,919 Speaker 2: generating electricity, you're an industrial or a home user. The 96 00:05:01,000 --> 00:05:04,400 Speaker 2: reality is that the availability of gas is becoming less 97 00:05:04,880 --> 00:05:06,599 Speaker 2: and that's having an impact on the price of it. 98 00:05:06,800 --> 00:05:10,360 Speaker 1: Malcolm, appreciate your time. Always good chat. Malcolm John's Genesis 99 00:05:10,480 --> 00:05:12,000 Speaker 1: Energy chief Executive with us tonight. 100 00:05:12,640 --> 00:05:15,839 Speaker 2: For more from Heather Duplicy Allen Drive, listen live to 101 00:05:15,920 --> 00:05:18,960 Speaker 2: news Talks it'd be from four pm weekdays, or follow 102 00:05:19,000 --> 00:05:20,760 Speaker 2: the podcast on iHeartRadio.