There were some short memories on Wednesday in the social media bombardment by environmental activists and their allies at Greenpeace over the decision to maintain coal-burning at the gas and power station at Huntly.
Short memories because the dry spells from December and into early February saw several of the electricity providers caught seriously short on hydro power. So they utilised the swaption agreement with Genesis Energy Ltd (NZX & ASX: GNE) for Huntly power.
The option would have been blackouts or brownouts.
Genesis Energy chief executive Marc England told Businessdesk: “We believe there is a future without coal but it is going to require some thinking and some planning and that's why we are giving 12 years notice.”
The New Zealand Herald reported that in 2015 Genesis said its last two coal-burning electricity generators at the 953 MW Huntly power station would be permanently withdrawn from the market by December 2018.
However, the following year it signed contracts with its rivals to keep the two coal/gas-fired Rankine units at Huntly available to the electricity market until December 2022.
Genesis chairwoman Jenny Shipley said at a company presentation it will phase out coal completely by 2030, and is committed to rule out using coal for electricity generation in normal market conditions by 2025.
Greenpeace NZ claimed this new plan to keep burning coal until 2030 “stunned environmentalists.”
“The fact that Genesis Energy, one of New Zealand's largest electricity generators, is celebrating this plan as a positive step forward for the climate is farcical and misleading,” Greenpeace climate campaigner Amanda Larsson claimed.
However, the NZ Herald said Marc England pointed out the new timeline was not a delay. Rather, Genesis had always guaranteed the units would stay open until the end of 2022 “but that never meant they would be definitely shut at the end of that point.”
He said Genesis has carried out analysis and “we believe the market requires that capacity beyond 2023” and its commitment to only use coal in abnormal market conditions from 2025 is assuming those units will be available and running after 2022 “but that was always our intent.”
England noted that in 2017, of the total generation produced by the two units, 90% was purchased by other market participants, not Genesis. “So, this is a market challenge, not a Genesis challenge.”
The company's first-half earnings showed the wholesale market was a big earner for Genesis, rising 29% to $106.4 million, as low hydro-storage in the South Island caused rivals to buy power from Genesis.
Sources: nzherald.co.nz; businessdesk.co.nz & nzresources.com