Meridian Annual Report - Meridian Energy

3<
Tim Lusk
Chief Executive
In particular, Meridian Energy is committed to working closely with
all parties on initiatives already underway to:
• facilitate greater use of long–term hedges
• improve the effectiveness of investment decision-making for
grid transmission
• restore the HVDC Pole 1 link to partial then full capacity as soon
as possible
• review from first principles the role of the Whirinaki reserve
energy plant
• speed up resource consenting for new generation without
diluting the ability for New Zealanders to have their say.
We share a strongly emerging industry view that transmission pricing
could be improved. The effect of a highly constrained HVDC and AC
grid on the economic operation of the market this year has reinforced
the need to review how these large investments are financed.
Meridian Energy will join this discussion with a strong resolve to get
a better outcome for investment efficiency at large.
In all other respects, Meridian Energy met or exceeded our targets,
and we are proud of our achievements.
One of our major highlights has been to commence construction
of Project West Wind near Wellington. When completed by the end
of 2009, it will double our wind capacity and provide electricity
for the equivalent of some 75,000 average households. It will also
help reduce significantly AC transmission network constraints and
facilitate the all-important south flow on the HVDC link. In addition,
it will provide a substantial increase in the security of supply for
the lower North Island. The long spell of dry weather has had the
beneficial side effect of speeding progress with the major earthworks
necessary on this demanding site.
We continue to build and develop our generation capacity, with a
portfolio of proposals to add significant amounts of new wind and
hydro generation within the next few years. This will give us greater
flexibility and capacity to deal with extreme weather patterns.
However, our renewable energy project pipeline is challenging
against a backdrop of movement in the costs of materials, exchange
rates, and what are too often turning out to be lengthy and expensive
resource consenting processes.
Mitigating these factors, we have some of the highest quality wind
sites and access to turbines through our scale and quality of supplier
relationships. Meridian Energy is determined to play a major part
in helping New Zealand meet its 90 percent renewable generation
target, and we remain confident that this will be the case.