Mercury reports fourth-lowest Waikato hydro output

Mercury has reported its fourth-lowest annual hydro generation from the Waikato River scheme since records began in 1980, citing persistently low inflows and a reduced starting level at Lake Taupō.

In its latest operational update for the three months ending June 30, 2025, the company said full-year hydro generation for FY25 was just 3,410GWh, down 17% on the prior comparable period (PCP). This contributed to a total FY25 generation figure of 7,906GWh, which was 11% lower than the previous year.

Dry conditions at the start of the June quarter and low storage at Lake Taupō saw hydro generation fall to 864GWh, or 15% below the PCP. However, inflows recovered strongly towards the end of the period, lifting Waikato catchment inflows to the 79th percentile, providing what Mercury described as a “healthy hydro storage” leading into FY26.

Spot electricity prices in Auckland averaged $216/MWh for the quarter, reflecting lower-than-usual hydrological inflows nationally, which were in the 62nd percentile. Forward electricity prices for FY26–27 have eased to $179/MWh in Auckland as of June 30.

Mercury says its mean annual hydro generation outlook has improved, thanks to the Karāpiro Rehabilitation Project and its AI-powered hydro optimisation platform, Digital River.

“Mercury’s average annual hydro generation has increased 62GWh to 4,140GWh per annum,” the company says.

“The uplift in the mean hydro expectations is driven by the Karāpiro Rehabilitation Project and the Digital River, Mercury’s AI-powered decision platform and digital twin.

“The Digital River optimises hydro operations by simulating complex hydrology scenarios for value and has already contributed to record high hydro efficiency in FY25.”

The Karāpiro upgrade, which began in 2022, is now nearing completion, with Mercury expecting to finish the full replacement of the third and final generating unit in September 2025. Once complete, the project will have delivered a 16.5MW uplift in capacity across the three units, with an additional 32GWh of generation possible in an average year.

“Mercury is anticipating the completion of the full replacement of the third generating unit at Karāpiro hydro station in Sep-25, concluding the three-year programme of work at the site,” the company says.

Wind generation for FY25 was 1,936GWh, down 6%, while geothermal output declined 2% to 2,559GWh, largely due to planned maintenance outages.