Trustpower blows across Tasman

Trustpower chairman Bruce Harker, left, and chief executive Vince Hawksworth need an Australian decision on energy policy before further major investment.

Trustpower's third-quarter results emphasise the company is continuing to make good progress in implementing its multi-product retail growth strategy.

Total energy connections increased to 262,000, including 23,000 gas connections, while telecoms growth continued with customers increasing to 36,000. "Importantly 50,000 customers are now taking two or more services, up from 35,000 customers in the prior period," said Bruce Harker, chairman of the Tauranga-based company.

However, Trustpower's ambitious plans to diversify its core power business and increase its wind generation footprint across the Tasman have been frustrated by continuing Australian political ructions.

"The outcome of the Australian Government's review of the Renewal Energy Target remains uncertain and this remains a near term barrier to further renewable energy investment in Australia," said Mr Harker.

Trustpower has to date invested $659 million in its Snowtown wind farm in South Australia. The investment was the end result of almost a dozen years spent in understanding the market after it identified the opportunities presented by the target scheme, introduced in 2001. The company has developed a significant pipeline of options for other wind power projects in Australia.

According to the third-quarter results, Australian wind generation of 876GWh was well ahead of the prior period following the 270MW completion of the Snowtown Stage 2 wind farm last November.

However, low wind production in the third quarter had contributed to year-to-date wind production being 8 per cent below expectations based on the long term average. This trend continued during January.

By contrast, the other leg of its Australian investment, hydro power from its acquisition of Green State Power's assets last July, produced 170 GWh - 8 per cent up on expectations. "The wind hasn't blown as much as we hoped, particularly in Australia," said chief executive Vince Hawksworth. "But that's the nature of the business - you get ups and downs from period to period."

But Mr Hawksworth acknowledged this week's attempt by members of the Liberal Party to overthrow the leadership of Prime Minister Tony Abbott - defeated by 61 votes to 39 - meant a decision on a new Renewal Energy Target (RET) could be some time in coming. "They have done the RET review, but they haven't come out and said this is what we want to do," he said. "It's a question of the Government determining what position they are going to take with respect to that review, and then looking for a bipartisan agreement with the opposition to make that view a reality."

Mr Hawksworth emphasised the current Snowtown investments would not be impacted by any future changes to the target. "We're pleased with what we've got in South Australia," he said. "We are just looking for the opportunity to continue that story and we'll wait patiently for the policy issues to be resolved."