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Jeremy Hutton: Milford Asset Management Equities Analyst on Meridian Energy's Investor Day data · Best of Business

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• 0:16
  Speaker 2: Jeremy Hutton, Milford, Acid Managements with Us Now, Hey Jeremy, Evening,
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  Speaker 2: Heather So Meridian Energy it hosted the old Invested Day today.
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  Speaker 2: Looks like big growth is coming for the company, but
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  Speaker 2: not just the company, the sector as well.
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  Speaker 3: Ah, yeah, that's right, and an an interesting Investorday yesterday,
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  Speaker 3: and yeah, you're right. These usually are a good opportunity
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  Speaker 3: for companies to show the market how they're thinking about
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  Speaker 3: things and display some of their plans and strategy for
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  Speaker 3: the next few years. And unsurprisingly, the energy transition is
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  Speaker 3: really checking up this electricity sector. A few quick numbers
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  Speaker 3: that Meridian highlighted so New zeal And electricity demand is
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  Speaker 3: expected to grow between fifty and seventy five percent over
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  Speaker 3: the next few decades, and Meridian's already seeing some of
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  Speaker 3: this increased demand coming through in their monthly stats already.
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  Speaker 3: And also the electricity sector has to invest over thirty
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  Speaker 3: billion dollars in their estimates in new generation to meet
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  Speaker 3: this demand. So a really big challenge for the sector coming.
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  Speaker 2: Up totally, And what's Meridian's plans. How's it going to
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  Speaker 2: develop this?
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  Speaker 3: Yeah, it will be a challenge to meet this growth.
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  Speaker 3: And Meridian did highlight a few projects that they've got
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  Speaker 3: on the go that they want to complete in the
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  Speaker 3: next five years. No mean feed. It's three wind farms,
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  Speaker 3: four solar projects and a battery project as well. And
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  Speaker 3: the costs unknown yet for a lot of this, but
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  Speaker 3: it will be in the billions for the company. But
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  Speaker 3: Meridian was clear that this was or the cost was
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  Speaker 3: anssue for the sector and itself to cover. It has
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  Speaker 3: the capability and the balance sheet to meet this and
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  Speaker 3: it won't need any government support at all, and this
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  Speaker 3: is a big difference to other countries. Of course, governments
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  Speaker 3: around the world are piling billions into renewable energy investments,
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  Speaker 3: so this should keep the local New Zealand governments happy.
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  Speaker 2: Did they talk at all about gas and the problems
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  Speaker 2: we're having with gas, Jeremy.
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  Speaker 3: Yeah, gas has got a lot of attention this year,
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  Speaker 3: and they did discuss this supply is very tight in
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  Speaker 3: the gas market and this does impact electricity as gas
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  Speaker 3: is used during our peak electricity demand periods. And Meridian
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  Speaker 3: was really clear that gas was still going to be
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  Speaker 3: required as a transition fuel until twenty thirty five. There's
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  Speaker 3: no technology in their view that can replace this as
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  Speaker 3: of yet, but it sounds like there's a bit of
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  Speaker 3: a sector working group going on to try and allay
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  Speaker 3: some of these concerns. The relevant ministers have been heavily
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  Speaker 3: involved as well, and it looks like an energy import
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  Speaker 3: terminal could be a solution. So this is quite interesting
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  Speaker 3: and it could solve a lot of our security of
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  Speaker 3: applier food, especially during this near term transition phase. But
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  Speaker 3: it is a bit early day, so WA's the space.
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  Speaker 2: Yeah, and look, we've been talking about the fast fast
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  Speaker 2: track proposal on the show just in the last twenty
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  Speaker 2: minutes or so. Did that get any discussion at all?
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  Speaker 3: Yeah, Consenting and the consenting regime in New Zealand did
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  Speaker 3: get a lot of discussion. Very typical as you say,
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  Speaker 3: with our topical as you say, with the fast track
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  Speaker 3: proposal by the government. Rudin was also very clear that
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  Speaker 3: the regime is just far too complex at the moment
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  Speaker 3: and it effectively requires unanimous approval, which lets face it
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  Speaker 3: is really impossible in today's age, and these delays to
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  Speaker 3: projects are really adding to the massive costs you know
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  Speaker 3: it's extending these projects by a couple of years in
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  Speaker 3: some instances, and with electricity as well, stopping developers trying
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  Speaker 3: to build more generations to meet this electricity demand. And
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  Speaker 3: quite simply, if it is an address, then electricity costs
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  Speaker 3: will continue to increase in the interim period.
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  Speaker 2: Jeremy, thank you for talking us through to appreciate it, mate.
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  Speaker 2: That's Jeremy Hatton Morefit Asset Management.
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