Meridian Reiterates Project Aqua’s Dry Year Worth

Media Release
For immediate release: Monday 15 December 2003

Meridian Energy Reiterates Project Aqua’s Dry Year Worth

Meridian Energy is reassuring New Zealanders about the value Project Aqua would have to New Zealand in a dry year.

This follows what Meridian Energy spokesperson Alan Seay describes as some misunderstanding about how Project Aqua would work during a dry year.

“The fact is that the Project Aqua scheme would add 30% more generation capacity to the Waitaki River – even in a dry year,” says Alan Seay.

In a normal year, Project Aqua would generate 3000 GWh – that is enough renewable electricity to power the equivalent of about 375,000 households. Even in a dry year (a 1-in-20 year event), it would generate enough electricity to supply 250,000 homes.

The single Kaplan turbines proposed for six Project Aqua power stations would have variable-pitch blades. That means the power stations would be able to operate over a wide range of canal flow conditions. Meridian Energy is proposing the use of these single Kaplan turbines because they are the most efficient for the hydraulic conditions that would exist in the Project Aqua canal.

“Project Aqua would produce electricity every year, whether it is wet or dry,” says Alan Seay.

The financial impact of a dry year

Despite some suggestions that Meridian Energy, which is a state-owned enterprise, somehow benefits from a dry year, the opposite is actually true.

“In a dry year, the spot prices soar and as we have to purchase power from that market to satisfy our customer contracts, this has a serious impact on Meridian’s financial performance,” says Alan Seay.

In 2000-2001, Meridian Energy’s net profit was $125.1 million. In 2001-2002, that fell to $84 million due to the dry year costs. In the latest financial year, Meridian Energy’s profit was $109.3 million, but $83 million of that was made in the first six months before the low inflows and thermal fuel shortages of March and April sent spot prices soaring.

“As a state-owned enterprise one of our key responsibilities is to operate as a successful business, just as we would if we were in the private sector. Our profits go back to our owners – the Government, and are ultimately owned by all New Zealanders. In the last three years we have paid $289 million to the Government in dividends alone, and that doesn’t include the $176 million Meridian Energy paid in taxes.”

As Project Aqua would increase the company’s generation capacity in both a dry and normal year, it would not only improve the security of electricity supply but also benefit our owners – the Government and people of New Zealand,” concludes Alan Seay.

ENDS

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