Mercury acquires Tilt Renewables’ NZ operations

Mercury NZ’s acquisition of Tilt Renewables’ New Zealand operations includes five operating wind farms (Tararua I, II & III; Mahinerangi; Waipipi) and development options such as those in the Manawatu, Northland, Otago and Southland.

This follows completion of the Scheme Implementation Agreement (SIA) signed in March between Mercury, Powering Australian Renewables (PowAR) and Tilt Renewables.

The enterprise valuation is $797 million, funded from the sale of Mercury’s 19.9% Tilt shareholding, worth $608m and net debt of $189m.

Under the scheme, Mercury has now taken ownership of the New Zealand assets and PowAR has taken ownership of Tilt’s Australian assets.

“The purchase of five operating wind farms from Tilt Renewables Limited means that Mercury will become one of New Zealand’s largest wind power companies,” Mercury chief executive Vince Hawksworth says.

The acquisition provides Mercury with fuel and plant diversity and adds more than 1100GWh to its annual generation production.

Wind power is a natural fit to Mercury’s portfolio of renewable geothermal and hydro generation. Mercury’s Hydro System on the Waikato River can be managed to respond well to compensate for fluctuations in wind output, and while wind generation may be variable hour to hour, on average it provides a reliable source of energy to support hydro storage.

Mercury’s Turitea Wind Farm is under construction and recently sent its first generation to the grid.

Efficient use of Mercury’s portfolio will enable further decarbonisation of New Zealand’s electricity generation, and the development sites add further future development options to Mercury’s consented Puketoi wind farm site in the Manawatu.

“Mercury enthusiastically endorses New Zealand’s goal of net zero carbon emissions by 2050, and we have a pipeline of new renewable generation waiting in the wings, subject to the right economic and market conditions,” Hawksworth says.

Tilt Renewables and Genesis Energy announced a conditional 20-year electricity offtake agreement that will provide the foundation for the construction of the 75MW Kaiwaikawe Wind Farm near Dargaville, one of the development sites included in the August 3 acquisition.

“This arrangement shows the market working to further decarbonise New Zealand’s energy supply by supporting the reduction of thermal generation,” Hawksworth says.

“We’re also committed to ensuring that supply remains reliable as thermal generation is phased out, which may involve new technologies and innovation.”