Infratil Limited · NZX:IFT
Infratil — Investor Day (2012)
10 slides from Infratil's investor day presentation, 2012
Slide 1: Electricity Sector
ELECTRICITY SECTOR 1
Slide 2: Some Insights from New Zealand and Australian Experiences
Some Insights from New Zealand and Australian Experiences • Infratil has deep operational experience in electricity in New Zealand and Australia - also in the CEOs of the businesses • These markets are superficially similar • Retail evolution is well ahead in Australia and there are useful insights
Slide 3: Residential Electricity Price Comparison
Residential Electricity Price Comparison NZ Retail Aus Retail Higher • Margins on average inadequate to • Sustainable margins cover costs • CTS are similar as larger scale in AUS compensates for higher compliance burdens and higher costs Comparable Energy • Shape costs higher in Aus • Offset by lowe
Slide 4: Two Myths (An Interesting and Relevant Digression to My Story)
Two Myths (An Interesting and Relevant Digression to My Story) MYTH 1 Retail is a good hedge for Generation Investment • Probably the biggest myth in the industry • Mass market retailing is a 1-3 year forward price lock in for generation, generation netback follows a smoothed raw wholesale • This is
Slide 5: Back to the Story - New Zealand vs Australia Residential Pricing
Back to the Story - New Zealand vs Australia Residential Pricing - The Cost of Another KWh • So far, we have looked at average prices for small customers (8 MWh NZ, 4.75 MWh Victoria) • Be reassured our price comparison is not distorted customer size or price structure • The cost of another kWh is l
Slide 6: Looking Forward – Australia: Australian East Coast Gas Prices
Looking Forward – Australia Australian East Coats Gas Prices 7
Slide 7: Looking Forward – Australia (Complicated and Challenging)
Looking Forward – Australia (Complicated and Challenging) • Coal and gas prices for power generation increasingly internationally linked - Falling $A places upward pressure on both plant and fuel costs • Carbon prices A$23/tonne rising in 2.5% pa real terms until planned international linkage - No t
Slide 8: Green costs on top of carbon pricing
Green costs on top of carbon pricing … 9
Slide 9: Putting all this together… Expected Real Price Outlooks
Putting all this together… Expected Real Price Outlooks New Zealand Australia • Small real price rises • Significant real price rises • Retail margin improvement to cover costs • Rising gas prices • Low carbon wind, geothermal energy • Rising carbon taxes to support gas over cheap coal • Hydro/gas p
Slide 10: NZ Electricity: Internationally Competitive, Highly Resilient, Low Carbon
NZ Electricity Internationally Competitive, Highly Resilient Low Carbon …OR, WE DON’T KNOW HOW LUCKY WE ARE! 11