Meridian Energy defends pricing as it looks to spend more on offshore wind

Navigation for News Categories

The company will focus on a host of renewable energy projects that it claims will eventually be self-funding.
Photo: RNZ / Nate McKinnon

Meridian Energy is defending its prices at a time when households are facing financial pressures.

The company’s annual shareholders meeting was told today in real terms power prices have dropped over the past decade.

Chairperson Mark Verbiest said electricity costs now take up 1.8 percent of household incomes compared to 2.4 percent a decade ago.

“After adjusting for inflation, residential and business prices have trended down in New Zealand for the last 10 years,” Verbiest said.

“Over that same time frame, electricity costs, as a percentage of average household income, have fallen from 2.4 percent to 1.8 percent. This is a reduction of 25 percent.”

The company is now seeking offshore wind opportunities working with a new Belgian partner Parkwind.

“This risks and complexities of building windfarms in the ocean are far different than those for onshore wind,” chief executive Neal Barclay said.

“It’s great to have an experienced partner on board.”

It has a stream of renewable energy projects including a windfarm near Napier, as well as battery, solar, hydrogen and wind developments over 30 years, but still expects to be paying dividends.

Meridian’s chief executive said many of these projects would be “self-funding over time”.

“As you grow your generation portfolio and your customer relationships that adds profit to the bottom line as well which facilitates a bigger balance sheet,” Barclay said.

“The unit cost of new generation is trending down in the long run so we don’t expect all of that growth and investment to drive costs up for consumers. It will be a lot of investment spread across a lot more demand.”

Anticipating a significant uptake of electric vehicles, Meridian has built up the country’s second largest Public EV charging network and now have 269 Zero branded charging points across both North and South Islands.

The company was satisfied with its recent financial performance.

“Whilst we reported a net profit after tax of $95 million for the year ended 30 June 2023, the accounting result was heavily influenced by a negative $375m net change in fair value of energy hedges,” Barclay said.