GNE
06/08/2015 09:23
GENERAL
PRICE SENSITIVE
REL: 0923 HRS Genesis Energy Limited (NS)
GENERAL: GNE: Genesis Energy announces Huntly Rankine units retirement
Genesis Energy announced today that its last two coal-burning electricity
generators at the Huntly Power Station will be permanently withdrawn from the
market by December 2018, signaling the end of large scale coal-fired
generation, and associated carbon emissions, in New Zealand.
Genesis Energy Chairman Dame Jenny Shipley said, "While the Huntly Power
Station has been, and remains, a great asset for Genesis Energy, the Board
has taken the decision to retire the remaining Rankine Units. New Zealand's
changing electricity market has seen improvements in the management of dry
year events, along with a significant decrease in coal-fired generation, and
by 2018 the two coal units will no longer be required unless market
conditions change significantly."
Chief Executive Albert Brantley said the Company has been on track to retire
the four coal/gas fired Rankine units since 2009.
"The development of lower cost renewable generation, principally wind and
geothermal, investment in the HVDC link, and relatively flat growth in
consumer and industrial demand for electricity have combined to reinforce the
decision to retire the remaining Rankine units, which will deliver further
operational efficiencies to Genesis Energy," he said.
Electricity generation will continue at the Huntly site for years to come
from the two existing gas-fuelled units, the high efficiency 400MW Unit 5,
and the smaller 50 MW open cycle Unit 6. In addition, the site remains
extremely well positioned to develop additional thermal peaking capacity,
should that be required in the future.
"The decision to close the Rankines has been taken after significant
assessment of the Company's generation position, our ability to meet our
ongoing commitments to our customers, and the impact on our loyal employees
who have skillfully run these units for many years, as well as external
stakeholders. These units have largely been operating at the margin of the
market for a number of years, at very low utilisation rates. We expect this
decision to produce operational and capital cost savings of approximately $20
to $25 million per annum," Mr Brantley said.
The closure will have a positive impact on overall CO2 emissions in New
Zealand, moving the New Zealand electricity generation sector closer to its
90% renewable target. At their peak, the units emitted around 5,000
kilotonnes (kt) of CO2 per year - amounting to around 5% of New Zealand's
total greenhouse gas emissions.
With decreased utilisation of the Rankine units, and recent commissioning of
more efficient gas generation on site, carbon emissions at Huntly dropped to
around 2,300kt in the 2015 financial year, and will drop significantly after
2018.
Genesis Energy's coal supply contract with Solid Energy expires in June 2017.
With around 700,000 tonnes of coal in its own stockpiles, ongoing coal
deliveries until June 2017 and ample supplies of natural gas, Genesis Energy
has no fuel availability issues at the Station. The two units will continue
to burn scheduled coal deliveries and coal stockpiled at the Station until
coal is exhausted and will then operate solely on gas, if required, for the
remainder of their operational life.
End CA:00268005 For:GNE Type:GENERAL Time:2015-08-06 09:23:36
