Meridian Energy Limited · NZX:MEL
Meridian Energy — UBS Australian Resources, Energy & Utilities Conference 2012
18 slides from Meridian Energy's conference presentation, Jun 15, 2012
Slide 1: Meridian Energy Limited – UBS Australian Resources, Energy & Utilities Conference
Meridian Energy Limited UBS Australian A t li Resources, Energy & Utilities Conference 15 June 2012
Slide 2: Disclaimer
Disclaimer This presentation mayy contain projections j or forward-looking g 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- loo
Slide 3: Today
Today Comparison of the Australian and New Zealand electricity markets The New Zealand state owned enterprise model Meridian’s market position and its operations UBS Australian Resources, Energy & Utilities Conference, 15 June 2012 3
Slide 4: Comparison of Australian (NEM) and NZ markets: Regulatory Framework
Comparison of Australian (NEM) and NZ markets Regulatory g y Framework Similar rule setting structure AEMC Electricity Authority Retail Some tariff control No tariff control, market determined Spot market Price cap and market floor Market determines outcomes (legal test of extremes) Transmission Reg
Slide 5: Comparison of Australian (NEM) and NZ markets: Ownership Structure
Comparison of Australian (NEM) and NZ markets Ownership p Structure Government/private Listed, private & state owned 3 state owned gentailers, 2 listed with strategic shareholdings Vertical integration Prevalent, but incomplete VI dominant business model L Local l lines li companies i 12 with ith va
Slide 6: Comparison of Australian (NEM) and NZ markets: Market size
Comparison of Australian (NEM) and NZ markets Market size [[2010]] Energy generation 204 TWh 43 TWh Installed capacity 49,100 MW 9,600 MW Number of generators 305 17 Customers 9 0m 9.0m 1 9m 1.9m Peak demand 35,000 MW (summer) 6,500 MW (winter) NZ demand is anti cyclical to Australia Sources: AEMO,
Slide 7: Demand Variability Relative to Average
Comparison of Australian (NEM) and NZ markets Demand Demand Variability Relative to Average 1.3 nual average 1.2 d where 1= ann 1.1 1 Deamnd 0.9 NZ demand prof ile (2011) NEM demand prof ile (2011) 0.8 Demand has declined in the last 5 yyears Demand ggrowth at +0.5% in last 5 yyears Demand growth ou
Slide 8: Comparison of Australian (NEM) and NZ markets: Wholesale Price Volatility
Comparison of Australian (NEM) and NZ markets Price Wh l l P Wholesale Price i V Volatility l ili 500% 450% 400% 350% Benmore (NZ) 300% VIC (AUS) 250% 200% 150% 100% 50% 0% 1/2 Hour Daily Monthly Quarter Annual 2 Year Signs of being capacity constrained Hydro base alleviates capacity constraints Can
Slide 9: Comparison of Australian (NEM) and NZ markets: Generation
Comparison of Australian (NEM) and NZ markets Generation [[2010]] hydro y wind oil & other wind i d bio & other coal geothermal natural gas 5% 1% 6% 2% 0% 4% 13% 12% Energy generation brown coal black coal natural gas hydro h dro 21% 25% 56% 56% Renewable % 7% 74% Futures volume (May 12) 9,936 contr
Slide 10: NZ Unit Cost Comparison for Generic Plant
Comparison of Australian (NEM) and NZ markets NZ Unit Cost Unit Cost Comparison p for Generic Plant 200 Wind (40% load Hydro (55% load Geothermal Thermal ‐ CCGT Thermal ‐ SI Lignite factor) factor) 175 150 Levelised Cost ($/MWh) 125 100 CO2 ($50) CO2 ($25) 75 O&M Fuel 50 Capex 25 0 Notes: Uses simpl
Slide 11: Comparison of Australian (NEM) and NZ markets: Retail
Comparison of Australian (NEM) and NZ markets Retail Market Competition 3 dominant retailers 95% by 5 big generators 1 Wholesale customer = 14% Churn 30% average 21% annualised churn Internet penetration 5.7m households 1.1m households Opportunity in Australia for innovative, online retailing Source
Slide 12: The NZ state owned enterprise model
The NZ state owned enterprise model State owned entities required by law to operate as commercial businesses Independent Boards High visibility of current commercial performance Shareholder focus has been on dividend yield and measured growth Government share offer process (mixed ownership
Slide 13: Energy sector of the NZ capital market
Energy sector of the NZ capital market Relative Value of Topp Energy gy Sector Companies p (listed and unlisted) 7,000 NZ$m) 6,000 prise Value (N 5,000 4,000 3,000 Enterp 2,000 1,000 - Sources: First NZ Capital 31 May 12 Government share offer will significantly shift weighting of energy stocks Ener
Slide 14: Meridian's position in the NZ market
Meridian’s position in the NZ market Installed Generation Capacity (MW) 22% 21% Genesis Largest NZ generator TrustPower 6% Generation is hydro y dominated ((87%)) C t t Contact Other Meridian is NZ’s largest owner of wind 17% 27% assets Meridian 7% MRP Key Numbers (2011) [$NZ] Meridian M idi
Slide 15: Overview of Meridian's generation operations
Overview of Meridian’s generation operations Generation Assets Vertically integrated renewable generator, retailer and developer Benchmark management of long life, high performing assets Te Uku Te Apiti West Wind Ohau A Ohau B Mt Millar Benmore Ohau C Aviemore M Manapouri i Waitaki White Hill UB
Slide 16: Overview of Meridian's generation pipeline
Overview of Meridian’s generation pipeline Significant expertise in wind development built Advanced Projects j up over a decade Flexible option set over a 20 year time horizon Ability to leverage core wind competencies into Australia Maungaharuru Central Wind Mt Munro Mill Creek Amuri H Hurunu
Slide 17: Overview of Meridian's retail operations
Overview of Meridian’s retail operations Renewable brand position Innovative, online offer Mid market pricing Number one ranking in NZ Deloitte Fast 50 index in 2011 High levels of service (5280% revenue growth, the highest rate ever recorded) Highest residential satisfaction among the 5
Slide 18: Meridian in Australia
Meridian in Australia Previous successful experience with Southern Hydro Measured wind generation investment to date with 70 MW Mt Millar purchase and 420MW Macarthur JV with AGL Developing opportunities to utilise our wind development strengths in a market supportive of renewables Trialling
Meridian Energy — UBS Australian Resources, Energy & Utilities Conference 2012 on 6ix