Slide 1: ASX cover fax: Contact Energy presentation investor offsite
For personal use only To Company Announcements Office Facsimile 1300 135 638 Company ASX Limited Date 21 June 2011 From Helen Hardy Pages 32 Subject CONTACT ENERGY – PRESENTATION INVESTOR OFFSITE - TAUPO Attached herewith is a copy of an announcement released to the NZX by Contact Energy today. Orig
Slide 2: Contact Energy investor offsite, Taupo June 2011
Contact Energy For personal use only investor offsite Taupo June 2011 June 2011
Slide 3: Disclaimer
Disclaimer For personal use only This presentation may contain projections or forward looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in an
Slide 4: Agenda
Agenda For personal use only Presentation Time Strategic Context 9am Dennis Barnes, Chief Executive Officer Finding and Developing Geothermal resources 9.30am Mike Dunstall, General Manager, Geothermal Resources Te Mihi 10.45am James Kilty, General Manager, Renewable Development Beyond Te Mihi 11.30
Slide 5: Strategic Context
For personal use only Strategic Context Dennis Barnes, Chief Executive Officer © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 4
Slide 6: Conditions remain challenging with high hydrology and intense retail competition
As reflected in monthly operating statistics, conditions remain challenging with high hydrology and intense retail competition For personal use only • Wholesale electricity prices in May and June continue to reflect above average storage levels and low demand, particularly post the earthquake • The
Slide 7: Strategy (i) – Increase portfolio flexibility
Strategy – (i) – Increase portfolio flexibility For personal use only • Ahuroa Gas Storage • 3.3 PJ injected during 1H11 (mitigating $25m of additional gas costs) • At 31 December 2010, total gas and LPG in the reservoir: 14.6 PJ (8.3 PJ of which is inventory gas) • Extraction facilities commissione
Slide 8: Strategy (ii) – Lower average cost of generation
Strategy – (ii) – Lower average cost of generation For personal use only Rendition of the Te Mihi power station • 166 MW Te Mihi geothermal power project (net 159 MW) – Engineering, procurement and construction (EPC) contract executed on 22 February – Project cost: $623m – Expected life: 35 years –
Slide 9: Strategy (iii) – Market share growth
Strategy – (iii) – Market share growth For personal use only • Geothermal – 250 MW Tauhara project: Consented – There are benefits in following Te Mihi – Taheke – three exploration wells drilled; positive preliminary results • Wind – 156 MW Waitahora project: Consented – 504 MW Hauāuru mā raki proje
Slide 10: Capital expenditure – reflects Contact's growth strategy
Capital expenditure – reflects Contact’s growth strategy For personal use only • Committed capex includes: – Te Mihi geothermal project – Enterprise transformation (SAP) programme – Other geothermal investment in existing field (wells, steamfield investment etc.) • Tauhara and the possible expansion
Slide 11: James Kilty, General Manager, Renewable Development
For personal use only James Kilty, General Manager, Renewable Development © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 10
Slide 12: Te Mihi benefits
Te Mihi benefits For personal use only • The Te Mihi Project derives its value from optimising the use of the fluid available under Contact’s resource consents by: – installing capacity at Te Mihi to utilise fully the available fluid take; – increasing efficiency by virtue of the new plant; – improv
Slide 13: Three large power stations on one field
Three large power stations on one field For personal use only © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 12
Slide 14: Te Mihi project description
Te Mihi project description For personal use only • 2 x 83 MW (gross) turbines and cooling towers and switchyard and transmission connection works • Incremental steamfield works with associated incremental well drilling. Ancillary enabling works, such as roading works and procurement of strategic an
Slide 15: Steam Turbine Plant (Dual Flash)
Steam Turbine Plant (Dual Flash) For personal use only Dual Flash Condensing Steam Power Plant: Geothermal fluid is separated at pressure into High Pressure (HP) steam and Separated Geothermal Water (SGW) The HP steam is supplied to a steam turbine- generator The HP SGW is able to be separated
Slide 16: Te Mihi Power Station Progress – current status on site
Te Mihi Power Station Progress – current status on site For personal use only [insert latest pics from site] • Roading works complete • Site entrance complete • Sediment controls complete • Main driveway and turbine pad cut • Detailed design progressing • Grid connection contract in place • Major pr
Slide 17: Wairakei Investment Programme – Te Mihi and Wairakei
Wairakei Investment Programme – Te Mihi and Wairakei For personal use only The new power station at Te Mihi is part of the Wairakei Investment Programme. The programme is being managed under a single integrated governance structure. Programme Objective Projects To ensure the Wairakei power station w
Slide 18: Wairakei Project One - Steamfield Project
Wairakei Project One - Steamfield Project For personal use only • The Steamfield Project requires the construction of: • Production well connections • Separation Plant – separates the two phase fluid into steam and separated geothermal water; • Additional steamlines to connect to the existing main l
Slide 19: Wairakei Project Two - Bioreactor Project
Wairakei Project Two - Bioreactor Project – improving discharges to the Waikato river For personal use only The bioreactor project will facilitate the required reduction in H2S discharges to the Waikato River from the Wairakei Power Stations © Contact Energy Limited June 2011 Contact Energy Investor
Slide 20: Programme Timetable
Programme Timetable For personal use only Project Contractor Due Date Status Wairakei Steamfield Hawkins August 2011 Commissioning in July Project Construction Te Mihi Power MSP JV 2013 Design and earthworks Station Project advanced. Procurement underway. Te Mihi Steamfield Not selected August 2012
Slide 21: Beyond Te Mihi
For personal use only Beyond Te Mihi James Kilty, General Manager, Renewable Development Dean Stebbing, Kaawai Rautaki Mike Dunstall, General Manager, Geothermal Resources © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 20
Slide 22: Tauhara: MW consented
Tauhara: 250 MW consented For personal use only • Will be the fifth stage of development of the Wairakei / Tauhara resource following: • Wairakei A & B (and binary plant) • Poihipi • Te Huka • Te Mihi • Follows extensive investigations and builds on more than 50 years of operations on the field • Wa
Slide 23: Tauhara: Consented zones
Tauhara: Consented zones For personal use only • Consent area is shown by the Power Station Site blue line • Consent area extends beyond the system boundary to permit flexibility in the reinjection strategy • Areas excluded from the consent application area – Centennial Drive, Mt Tauhara • Area incl
Slide 24: Tauhara - location
Tauhara - location For personal use only • Located away from residential areas, on flat land, near transmission • Main pipe corridors and separator stations have been defined • Well pad locations and branch lines to be defined • Programme now includes further drilling and investigations to prepare f
Slide 25: Advantages to construct Tauhara following Te Mihi
There are advantages to construct Tauhara following Te Mihi For personal use only © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 24
Slide 26: New fields require partnership with Maori land owners
New fields require partnership with Maori land owners Combining knowledge and resources – our vision for partnerships For personal use only © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 25
Slide 27: Contact's strategic framework to work with tangata whenua
Contact’s strategic framework to work with tangata whenua For personal use only • Contact’s concentration on the development of renewable energy projects carries with it an increasing responsibility to maintain excellent and expanding working relationships with iwi as kaitiakitanga of land and resou
Slide 28: Taheke – our partnership approach in action
Taheke – our partnership approach in action For personal use only © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 27
Slide 29: Other Prospects
Other Prospects For personal use only © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 28
Slide 30: Contact has a strong geothermal position
Contact has a strong geothermal position For personal use only • Contact’s current geothermal development portfolio is second to none: • Te Huka provided a strong first step. • Te Mihi represents the largest geothermal power station built in New Zealand. • Tauhara represents a new level of opportuni
Slide 31: Contact's options position it well for the future
Contact’s options position it well for the future For personal use only • The time is right for geothermal generation in New Zealand – affordable, reliable, renewable and with a low carbon intensity • New developments will derive from and benefit from partnerships with tangata whenua • It can be dif
Slide 32: For personal use only
For personal use only © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 31