An investor roadshow by Mercury NZ Ltd (NZX & ASX: MCY) said the company had excelled using New Zealand’s competitive advantage.
This was seen as achieving the electricity “trifecta” of reliability (NZ ranks 3rd lowest of the 25 large energy-consumer countries for energy security), renewability (3rd highest level of renewable electricity in the OECD) and pricing (12th lowest residential electricity price out of 33 OECD countries).
The presentation by chief financial officer William Meek and head of treasury and investor relations Tim Thompson points out that the company now has a market capitalisation of $4.6 billion and has an average daily turnover of $4.5 million.
The company has achieved 10 years of ordinary dividend growth and, in FY19, had an EBITDAF of $515 M.
The company, like all the listed but semi-Government owned energy companies, claims it has 100% renewable generation. However, the current Government and some energy companies often overlook the fact that in dry periods, like October, renewable energy deficiencies with hydro and wind power and has to be backed up by gas and vilified coal generation from Genesis Energy’s Huntly power station.
Mercury said an emerging technologies in NZ were solar and batteries. Solar was still a niche market and 1 M solar panels would be 1% of national demand.
Mercury said given rapid changes in electricity-generation technology and the potential effects on rising power prices in other parts of the economy, the Government should not use subsidies or regulation to favour “particular technologies that generate low-emissions electricity.”
Mercury said batteries could be useful when coupled to solar but at a significant additional cost.