Meridian pushes on with Aus expansion
Meridian, New Zealand's largest electricity generator, is to push ahead with a A$260 million (NZ$334m) wind farm in Victoria and hinted its retail business could soon launch across the Tasman.
In a statement Meridian, one of the state-owned companies being lined up for a partial privatisation, confirmed that construction of the 64 turbine Mt Mercer, 30km south of Ballarat, would begin in December and take two years.
"This project increases Meridian's existing presence in Australia and further leverages Meridian's proven experience in designing, building and managing wind farms," chief financial officer Paul Chambers said.
While New Zealand is widely seen as having an excess of generation capacity by the industry - even before the future of the Tiwai Point aluminium smelter is resolved - Australia has ambitious targets to increase the proportion of renewable energy, reducing its reliance on mainly coal-fired power stations.
''Australia's renewable energy targets requiring approximately one fifth of electricity generation be produced from renewable sources by 2020 means that generation with a total capacity of more than 80 per cent of New Zealand's entire generation base must be built in Australia by 2020,'' Chambers said.
While renewable energy projects receive no subsidies in New Zealand, Chambers said Australia's ''long term regulatory support'' for green energy projects would help ensure the returns for Meridian on Mt Mercer, which will produce 131 megawatts, would be ''excellent''.
Meridian is already running a small trial of Powershop, the online only electricity retailer, in Victoria, ahead of a possible launch in the state.
"Powershop could be a natural adjunct to our renewable generation portfolio in Australia," Chambers said.
Meridian already owns and operates the Mt Millar wind farm in South Australia. It is also partnering AGL Energy to build the Macarthur wind farm in western Victoria, although has little equity invested in the 420 megawatt project.
In New Zealand Meridian has several wind farms, including the giant West Wind, near Wellington. Last month it began construction of Mill Creek, a smaller wind farm immediately to the north of West Wind.
At its results briefing last month, chief executive Mark Binns hinted that the company may start looking at solar projects in Australia, predicting parity in the cost of building wind and solar by 2020.