Meridian already has a major deal supplying New Zealand Aluminium Smelters (which is owned by multinational Rio Tinto) with electricity to operate its smelter at Tiwai Point until at least 2044.
Roan said arrangements with large electricity users introduced scale that reduced costs.
Shoring up a deal in advance, rather than using a “build it and they will come” approach, also reduced risk.
While Roan said Meridian was scouting on its own, it was open to working alongside other electricity generators if required to get a big company operating in New Zealand, bringing job opportunities and new technology with it.
He said the work was in its initial stages. However, he wanted to move quickly to leverage the advantage he believed New Zealand presented on the world stage by being a relatively safe democracy.
Roan said the impression he got from a recent trip to Europe was that Europeans felt they were being squeezed between Russia to the east and the US to the west.
He said Meridian had received calls from businesses in the Middle East, expressing interest in New Zealand.
“By international standards we are really stable,” Roan said.
“I’m always surprised when I go to Australia, the amount of regulatory political intervention in their markets undermines their competitive capability. We’ve had a market in place for 30 years in New Zealand. We’ve been really fortunate.”
Asked whether NZ First and the Green Party’s eagerness to break up the gentailers created instability in the New Zealand market, Roan acknowledged elections were a “contest of ideas”.
“The cost of electricity has risen so it’s important that people are talking about it. But that certainty that we’ve had [around the structure of the market] has allowed us to invest successfully.”
While wholesale electricity prices have fallen, household energy costs still rose by 9.4% in the year to September quarter, according to Stats NZ’s latest Consumers Price Index figures.
Roan expected household electricity prices to “stabilise”.
He said Meridian’s commercial customers were seeing the benefits of softer wholesale prices as their contracts came up for renewal.
Meridian is continuing to invest in new electricity generation.
Jenée Tibshraeny is the Herald‘s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
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