Contact Energy Limited · NZX:CEN
Contact Energy — Macquarie Australia Conference 2024
16 slides from Contact Energy's conference presentation, May 8, 2024
Slide 1: Macquarie Australia Conference
For personal use only Macquarie Australia Conference May 2024 1
Slide 2: Disclaimer and important information
Disclaimer and important information While all reasonable care has been taken in compiling this presentation, EBITDAF, free cash flow and operating free cash flow are financial measures that are “non-GAAP (generally For personal use only neither Contact nor any of its directors, employees, sharehold
Slide 3: Presenters
Presenters Mike Fuge For personal use only Chief Executive Officer Mike Fuge was appointed CEO in September 2019 and joined Contact in February 2020. Mike was previously the chief executive of Refining New Zealand and has a long history in the energy sector, both in New Zealand and internationally.
Slide 4: Contact is one of New Zealand's most significant companies
Contact is one of New Zealand’s most significant companies ~20% market share in electricity generation and retail For personal use only Owner-operator of low-cost, long-life renewable generation assets Developing its consented geothermal options 86% Long term renewable contract for gas storage gener
Slide 5: Contact has a diversified and resilient portfolio of generation assets
Contact has a diversified and resilient portfolio of generation assets 5 year average generation by station and type (FY19-FY23)1 Where we are For personal use only 8.4TWh Under construction ~1,870 average 3,908GWh generated Tauhara Commissioning underway Roxburgh (320 MW) 1,746 3,234GWh x2 Te Huka
Slide 6: New Government, change in some policy levers: Net Zero 2050 imperative remains
New Government, change in some policy levers: Net Zero 2050 imperative for NZ remains For personal use only New Government: Energy policy headlines Looking ahead: Topical regulatory matters ➢ “Project Onslow cancelled” • Declining performance of NZ’s natural gas fields. ➢ “Review of ETS stopped” • I
Slide 7: Electrification will reduce carbon emissions
Electrification will reduce carbon emissions With New Zealand's high renewable penetration, electricity is the solution to reducing carbon emissions, not the problem Greenhouse gas Government’s The Climate Change Commission expects electricity demand to For personal use only emissions by sector firs
Slide 8: Our strategy to lead NZ's decarbonisation
Our strategy to lead NZ’s decarbonisation For personal use only Strategic Grow Grow renewable Decarbonise Create outstanding theme demand development our portfolio customer experiences Objective Attract new industrial demand with Build renewable generation and Lead an orderly transition Create NZ's
Slide 9: Demand growth sources are materialising
Demand growth sources are materialising High value Major industrial Road Large scale Green Industrial demand sources: process For personal use only energy users transport data centres chemicals heat New Zealand Aluminium Smelter (NZAS) Estimated Auckland data centre capacity1 NZ Steel - Electric Arc
Slide 10: On track on the pathway we set in May 2023: Net Zero for Scope 1 and 2 by 2035
On track on the pathway we set in May 2023: Net Zero for Scope 1 and 2 emissions by 2035 For personal use only Contact’s Net Zero pathway as set in May 2023 Progress on key initiatives Set and illustrated based on FY22 emissions ✓ Current emission Decarbonisation breakdown pathway (effectively a mea
Slide 11: Scaled retail footprint across NZ, with further growth opportunities
Scaled retail footprint across NZ, with further growth opportunities in adjacent products and services Retail energy margins remain challenging in the near term as we navigate the cost of transition For personal use only Contact’s Electricity Gas Broadband Mobile 591k 589,000 products customer 19% 2
Slide 12: Contact is preparing for further investment in renewable generation and storage
Contact is preparing for further investment in renewable generation and storage For personal use only Geothermal generation potential (TWh p.a.) +3.0 6.3 Glorit 0.7 0.3TWh solar 5.2 0.4 0.4 Glenbrook 1.4 100MW battery 3.3 6.3 Under construction Remaining consented Stratford 100MW battery 0.3TWh sola
Slide 13: Rising LRMCs of intermittent renewables as capital costs continue to increase
Rising LRMCs of intermittent renewables as capital costs continue to increase For personal use only Observed LRMCs for intermittent renewables1 • Continued uplift observed in the LRMCs of intermittent renewables. $/MWh • Impacted by elevated cost of capital and higher building costs (including from
Slide 14: Future landscape for capital allocation: change in investment merit order
Future landscape for capital allocation: A change in investment merit order for new renewable flexibility For personal use only Changing value rankings of renewable investments Sources of new renewable flexibility From To Highest Geothermal Geothermal Grid scale Demand value Biomass batteries respon
Slide 15: Further substitution of gas generation for low cost geothermal to drive EBITDAF uplift
Further substitution of gas generation for low cost geothermal to drive near term EBITDAF uplift Contact is expecting benefits realisation from Tauhara and Te Huka 3 as they come online in FY25 For personal use only EBITDAF Guidance vs Actual ($m) Geothermal plants coming online in FY25 » Strong tra
Slide 16: Questions
Questions For personal use only 16 16 Representatives from tangata whenua joined the Tauhara team to mark the first turning of the turbine