{"id":636129,"date":"2026-10-20T09:10:17","date_gmt":"2026-10-20T09:10:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/636129\/"},"modified":"2026-10-20T09:10:17","modified_gmt":"2026-10-20T09:10:17","slug":"electricity-prices-genesis-says-power-system-has-moved-on-from-2024-winter-price-spike","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/636129\/","title":{"rendered":"Electricity prices: Genesis says power system has moved on from 2024 winter price spike"},"content":{"rendered":"
\u201cThe system\u2019s completely different now to what it was in winter \u203224,\u201d he said.<\/p>\n
\u201cFor a start, there\u2019s a lot more renewables that are being built and there\u2019s a lot more batteries in the system.<\/p>\n
\u201cWe\u2019ve got together with the others [Meridian, Mercury and Contact] and guaranteed 600,000 tonnes of reserve fuel [coal] at Huntly and the Government\u2019s put 90 million litres of diesel in reserve at Marsden Point.<\/p>\n
\u201cI think the system is in a quite materially different place to where it was in winter \u203224.\u201d<\/p>\n
Genesis boss Malcolm Johns says the company expects to see biomass at the Huntly Power Station \u2013 “it’s just not going to be in the next three to five years”. Photo \/ NZME<\/p>\n
Johns said the company was starting to see the impact of the El Ni\u00f1o weather pattern in its various catchments.<\/p>\n
\u201cThe southern lakes are doing pretty well but the Mackenzie lakes are starting to show some signs of retreat, while North Island lakes are below average.\u201d<\/p>\n
Genesis Energy\u2019s coal and gas-fired Huntly Power Station backs up the hydro- and wind-dominated system when the weather is not co-operating.<\/p>\n
Johns said the company expects to burn a reasonable amount of coal this summer to support the system.<\/p>\n
\u201cIt\u2019s playing out largely in line with the scenario that we saw, but I think we will go into a dry phase, particularly in the North Island over the summer.\u201d<\/p>\n
Genesis said a review of its 400MW Huntly-based gas turbine, Unit 5, will take 12 months to complete.<\/p>\n
Until recently, Unit 5 \u2013 which by itself can meet the power demands of about 400,000 households \u2013 has been an integral part of New Zealand\u2019s power system.<\/p>\n
Unit 5 has not operated for half of each of the past two years.<\/p>\n
\u201cAs we and others build new renewables, with additional water storage now in play and in an energy-only market, it is challenging to currently see an attractive commercial case for Unit 5 beyond the very near term,\u201d Johns said.<\/p>\n
Several billion dollars worth of renewable energy projects are underway at the moment and several projects are in the pipeline.<\/p>\n
\u201cIt\u2019s going to come in at a volume which means that the amount of time we\u2019re going to need to run Unit 5 is going to go from 12 months a year to probably three to four months a year and then it will disappear altogether.\u201d<\/p>\n
Crunch time for Unit 5 would be in 2029, when tens of millions of dollars would need to be spent on extending its lifespan.<\/p>\n
\u201cWe know that there is an interest for these types of units internationally, and we\u2019re struggling to see a commercial case for them in New Zealand at the moment,\u201d Johns said.<\/p>\n
Genesis chair Barbara Chapman.<\/p>\n
Genesis chair Barbara Chapman said a reduction in the company\u2019s emissions over its last financial year reflected good hydrology, strong trading, and emissions reduction efforts across the business.<\/p>\n
The company\u2019s total greenhouse gas emissions decreased to 2014 kilotonnes, down 47% from financial year 2025 and the lowest level recorded since 2020.<\/p>\n
\u201cWhile our emissions are trending downward over time and will continue as we invest in new renewable generation, hydro and wind conditions will continue to influence outcomes,\u201d she said.<\/p>\n
Meanwhile, Genesis is walking back its ambitions for biomass.<\/p>\n
Johns said the company was committed to biomass \u201cbut we can\u2019t buy it at the price that beats coal and gas\u201d.<\/p>\n
For Genesis, that price needs to be sub-$500 a tonne, he said, \u201cand we can\u2019t buy it for that at the moment\u201d.<\/p>\n
\u201cSo we\u2019re staying in touch with everybody.<\/p>\n
\u201cWe are prepared to contract and displace coal as soon as the economics arrive.<\/p>\n
\u201cOur thinking is that\u2019s probably around 2030 to 2035 when the economics will come into orbit and so we still expect to see biomass at Huntly \u2013 it\u2019s just not going to be in the next three to five years.\u201d<\/p>\n
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.<\/p>\n