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7/12/2018 — General
Z Energy watches EV growth

Z Energy Ltd (NZX & ASX: ZEL) said yesterday it is ready for the rapid expansion of electric vehicles but has no idea when that tipping point will be reached.

The website Sharechat utilising a report by BusinessDesk said the company, which this year acquired a controlling stake in Flick Electric, claims it is not wedded to hydrocarbon fuels and will expand its charging sites as demand increases.

Sustainability and community manager Gerri Ward said Z has eight electric vehicle (EV) chargers on a range of sites around the country and they are being used about as much as expected.

New Zealand had 11,255 electric vehicles registered at the end of November, almost twice that of a year earlier. But more than 5,000 of those are in Auckland, with another 3,000 split between Wellington and Canterbury.

Ward said Z Energy has many sites that could have chargers, but it makes little sense installing them in centres that have few EVs, particularly given they will generally be charged at homes.

She said that, depending on who you talked to, rapid uptake of EVs was either going to happen tomorrow or in 20 years’ time.

“When that tipping point happens we’ll be more than ready to go and we’re up for that,” she told delegates at the New Zealand Emissions Workshop.

Z Energy, the country’s biggest fuel retailer, is aiming to reduce its operational carbon emission by 30% by 2020. It has also set itself a goal of being a leader in New Zealand’s decarbonisation efforts.

The company has a major stake in electric car sharing firm Mevo, and in July it invested $1.5 million in permanent forestry projects to help offset its group-wide emissions. In August it acquired a controlling stake in power retailer Flick Electric.

BusinessDesk reported that last month Z Energy started deliveries of biodiesel to Fonterra’s North Island tanker fleet from its Wiri plant. That is about two years later than originally planned. It has spent about $35 M on the project, Ward said, including capitalised operating costs.

“It’s been hard. It’s been a really long journey and it costs a lot more than we thought it would.”

Not only does the 5% biodiesel blend reduce emissions from Fonterra’s fleet, it also keeps tallow onshore that would have otherwise been shipped overseas to make candles.

And at a volume of 20 M litres a year, the plant is using only about 10% of tallow available. It is also the only biodiesel plant in the world operating without government subsidies.

Andrew Bolland, co-portfolio manager and investment analyst at Salt Funds Management, said climate change presents real financial risk and firms need to get a handle on the drivers of their own exposure.

Scenarios modelled by the Inter-governmental Panel on Climate Change could have temperatures reaching the 1.5 degree warming threshold as early as 2025 – well within the forecasting range of the valuation models his firm runs.

While some firms do seem to have a good grasp of the potential risks they face and how they will respond, and Bolland said others appear to be have produced little more than “glossy pages with pictures of very happy people standing in front of oceans and wind mills.”

The big risk, he said, is a mismatch between firms' short-term goals and their long-term risk position.

Sources: sharechat.co.nz; businessdesk.co.nz

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