Mercury picks plenty of hydro power

Strong hydro flows at the end of last year and into January ensure healthy storage leading into Q3FY24, says Mercury.

Its quarterly operational update to December 31, 2023, says lower national inflows earlier the quarter were reflected in higher spot electricity prices averaging $156/MWh in Auckland.

Mercury expects forward prices to remain high at $167/MWh in Auckland for financial years 2024 to 2026.

“Normal hydro inflows in December and portfolio management has provided a strong starting hydro position,” it says, adding that new wind generation from Turitea South and Kaiwera Downs 1 wind farms partially offset 25th percentile hydro inflows during the quarter.

“Mass market yield growth was $16/MWh higher for the quarter relative to PCP (prior comparable period), this was partly a result of one-off accounting adjustments and reduced acquisition activity.

“For the financial year we are forecasting full hydro generation of 4000GWh.”

Mercury says electricity connections are flat on PCP and 5000 lower compared to the prior quarter.

“This quarter-on-quarter movement was primarily a result of focusing on customer migration. The programme of work to migrate to the Gentrack billing system has been successfully completed.

“Lower quartile inflows in the Waikato catchment over the quarter saw Q2 hydro generation reduce to 928GWh (353GWh or 28% lower than PCP). Wind generation was higher at 579GWh (191GWh or 49% higher than PCP) this was primarily a result of new wind generation from Turitea South and Kaiwera Downs 1 wind farms.”