Meridian, Contact and Mercury welcome NZ electricity market reforms
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The news: New Zealand energy retailers Meridian, Contact and Mercury have welcomed new government reforms, announced today, in response to an independent review of the local electricity market.
The context: The government's actions, which follow a review to ensure the New Zealand electricity market is fit for purpose, comprise:
- Launching a formal procurement process for a liquefied natural gas import facility, including seeking registrations of interest from potential providers and proposals for accelerated delivery of the facility;
- Increasing generation through supporting commercial investments by the Crown’s mixed ownership model companies;
- Leveraging government energy demand to boost investment in new energy supply;
- Strengthening the Electricity Authority;
- Improving gas market transparency;
- Introducing new rules for market participants and more sophisticated security of supply assessments from Transpower to ensure the lack of dry year back-up supply can’t re-emerge; and
- Delivering improvements in electricity distribution business (EDB) efficiency and increasing thresholds for EDB investment in generation.
What they said: In a release to the ASX, Mercury said it is "pleased to have clarity" on the government's response to the review. CEO Stew Hamilton said the company "supports the general intent to increase energy security and boost existing markets, while enabling market-led responses."
Contact CEO Mike Fuge said: "We support any initiatives that accelerate electrification and that explore opportunities to manage the energy transition to a renewable future in an orderly way."
Meridian said it "welcomes the government's willingness to participate in equity capital raisings by mixed ownership model companies such as Meridian as a means of bringing forward investment in new generation and firming capacity."
"This is bold," said Meridian CEO Mike Roan. "It's the biggest change to our capital investment settings since we were listed in 2013, and we acknowledge the government's commitment to help the country move forward."
The sources: Ministry of Business, Innovation & Employment, ASX, ASX, ASX
