Contact Energy Limited · NZX:CEN
Contact Energy — Investor Presentation (June 2011)
31 slides from Contact Energy's investor presentation, June 2011
Slide 1: Contact Energy investor offsite Taupo June 2011
Contact Energy investor offsite Taupo June 2011 June 2011
Slide 2: Disclaimer
Disclaimer 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 any forward-looking stat
Slide 3: Agenda
Agenda 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 11.30am James Kilty, Genera
Slide 4: Strategic Context
Strategic Context Dennis Barnes, Chief Executive Officer © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 4
Slide 5: 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 • Wholesale electricity prices in May and June continue to reflect above average storage levels and low demand, particularly post the earthquake • The average price at Haywa
Slide 6: Strategy (i) – Increase portfolio flexibility
Strategy – (i) – Increase portfolio flexibility • 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 commissioned Ahuroa gas storage p
Slide 7: Strategy (ii) – Lower average cost of generation
Strategy – (ii) – Lower average cost of generation 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 – Replaces 45 MW of exis
Slide 8: Strategy (iii) – Market share growth
Strategy – (iii) – Market share growth • 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 project: Consented • Hydro
Slide 9: Capital expenditure – reflects Contact's growth strategy
Capital expenditure – reflects Contact’s growth strategy • 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 of Ahuroa gas storage
Slide 10: James Kilty, General Manager, Renewable Development
James Kilty, General Manager, Renewable Development © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 10
Slide 11: Te Mihi benefits
Te Mihi benefits • 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; – improving O&M costs; – incre
Slide 12: Three large power stations on one field
Three large power stations on one field © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 12
Slide 13: Te Mihi project description
Te Mihi project description • 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 and operational spares f
Slide 14: Steam Turbine Plant (Dual Flash)
Steam Turbine Plant (Dual Flash) 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 again at a lower pres
Slide 15: Te Mihi Power Station Progress – current status on site
Te Mihi Power Station Progress – current status on site [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 procurement underway © C
Slide 16: Wairakei Investment Programme – Te Mihi and Wairakei
Wairakei Investment Programme – Te Mihi and Wairakei 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 will • Wairakei Steamfi
Slide 17: Wairakei Project One - Steamfield Project
Wairakei Project One - Steamfield Project • 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 lines; • Reinjection li
Slide 18: Wairakei Project Two - Bioreactor Project
Wairakei Project Two - Bioreactor Project – improving discharges to the Waikato river 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 Offsite - Taupo 2011
Slide 19: Programme Timetable
Programme Timetable 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 Design advanced Projec
Slide 20: Beyond Te Mihi
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 21: Tauhara: 250 MW consented
Tauhara: 250 MW consented • 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 • Was consented under Boar
Slide 22: Tauhara: Consented zones
Tauhara: Consented zones • 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 includes Te Huka • Tauhara
Slide 23: Tauhara - location
Tauhara - location • 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 for investment © Contac
Slide 24: Advantages to construct Tauhara following Te Mihi
There are advantages to construct Tauhara following Te Mihi © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 24
Slide 25: New fields require partnership with Maori land owners
New fields require partnership with Maori land owners Combining knowledge and resources – our vision for partnerships © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 25
Slide 26: Contact's strategic framework to work with tangata whenua
Contact’s strategic framework to work with tangata whenua • 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 resources. • Our strategy i
Slide 27: Taheke – our partnership approach in action
Taheke – our partnership approach in action © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 27
Slide 28: Other Prospects
Other Prospects © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 28
Slide 29: Contact has a strong geothermal position
Contact has a strong geothermal position • 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 opportunity • Taheke represents
Slide 30: Contact's options position it well for the future
Contact’s options position it well for the future • 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 difficult to consent – •
Slide 31: © Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011
© Contact Energy Limited June 2011 Contact Energy Investor Offsite - Taupo 2011 31