Latest / Best of Business / Neal Barclay: Meridian CEO hopeful rain will take the strain off New Zealand's power pressures

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Neal Barclay: Meridian CEO hopeful rain will take the strain off New Zealand's power pressures · Best of Business

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  Speaker 2: Transpower has decided that power generators will now be allowed
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  Speaker 2: to dip into the hydro lakes that are already at
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  Speaker 2: record low levels. Controlled hydro storage is sitting at just
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  Speaker 2: fifty five percent of average for this time of year. Now,
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  Speaker 2: that is one of the lowest levels in about ninety years.
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  Speaker 2: Neil Barclay's Meridian's chief executive.
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  Speaker 3: Hey, Neil, Hi, Heather, how are you well?
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  Speaker 2: Thank you. You've got permission to draw down, but are
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  Speaker 2: you actually going to draw down.
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  Speaker 3: At I'd say it's unlikely. We've had some drips and
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  Speaker 3: drags of water into the lakes in the last week,
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  Speaker 3: excuse me, and the forecast is looking pretty strong as well,
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  Speaker 3: plus all the other actions that have been taken across
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  Speaker 3: the sector, you know, for example, the meth and X
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  Speaker 3: deal and the demand response steal that we've done with
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  Speaker 3: ENSIS over the last week as well.
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  Speaker 2: Okay, so we go for the gas out of the
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  Speaker 2: methaex deal before we start drawing down on the hydro lakes.
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  Speaker 3: Yeah, ideally, Yeah, I mean there are environmental impacts once
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  Speaker 3: you's driven into those the bottom ends of those lakes.
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  Speaker 3: And so we do it cautiously and we're certainly going
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  Speaker 3: to use the meth and X options first, Neil.
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  Speaker 2: If we were to draw down, we would potentially be
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  Speaker 2: bringing ourselves trouble in summer, wouldn't we because then the
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  Speaker 2: lake levels might be too low.
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  Speaker 3: Well, we're coming into and flow seasons. So typically in
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  Speaker 3: the southern Alps you get a lot of whea, the
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  Speaker 3: patterns coming and dropping a lot of water into the mountains,
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  Speaker 3: you know, in spring and in summer that's typically when
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  Speaker 3: we get most of the inflow. So you know, the
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  Speaker 3: outroock's still a bit uncertained. But ideally we'd like to
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  Speaker 3: go certainly into the next winter for lakes, and so
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  Speaker 3: that's that's what we need to manage.
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  Speaker 2: Between Now then, all right, is this going to bring
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  Speaker 2: down power prices?
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  Speaker 3: Yeah? Well, I think as soon as the lake start
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  Speaker 3: filling up and we can start reverting more back into hydrogeneration,
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  Speaker 3: you'll certainly see spot prices start us often quite a lot.
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  Speaker 2: How far how far away is that?
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  Speaker 3: Well, like I say, this is a massive weather system
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  Speaker 3: coming out, I shall shouldn't say, because I don't want
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  Speaker 3: to jinx it. But there is a lot of water
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  Speaker 3: coming into the hills.
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  Speaker 2: I mean we're talking within days, are we.
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  Speaker 3: Yeah, probably, depending on how much. If we get a
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  Speaker 3: meter lift in the lake, for example, over the course
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  Speaker 3: of the weekend and into next week, that buys another
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  Speaker 3: two or three weeks, and then you expect to get
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  Speaker 3: further and flows as we move into sort of spring.
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  Speaker 3: So it's all looking a lot more favorable than what
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  Speaker 3: it was probably three weeks ago. I think that's a
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  Speaker 3: key point.
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  Speaker 2: That's good news.
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  Speaker 3: Neil.
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  Speaker 2: Thank you very much, Neil Barclay, Chief executive at Meridian.
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  Speaker 2: We're all going to become like farmers now and pray
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  Speaker 2: for rain.
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