Genesis Energy boosts coal stockpile amid winter power shortfall concerns

Genesis Energy may start up a third Rankine at its Huntly Power Station amid concerns about another power shortage this winter. Photo / NZME

Genesis Energy says it is adding more coal to its stockpile and may start up a third gas-fired Rankine unit at its Huntly Power Station as concern mounts that the country may experience another renewable power generation shortfall this winter.

The company said it anticipates 630 kilotonnes (kt) of coal arriving between now and September 2025, in addition to the current stockpile of 515 kt.

Huntly’s ageing coal and gas-fired Rankines use boiler and steam turbine technology to generate electricity.

Generally, Genesis operates up to two 240 megawatt (MW) Rankines in support of its own customers, holders of Huntly Firming Options (HFOs) and other forward contracts.

“Subject to plant and people availability, we can operate a third 240 MW Rankine in an emergency or, with planning, for around three months at a time,” the company said.

“This planning is well advanced, and we have made some additional proactive capital investment into the back-up Rankine with winter in mind,” the company said.

Genesis chief executive Malcolm Johns said the company was responding to ongoing uncertainty about energy security for winter 2025 as gas supply remained tight, hydro lake levels had fallen below historical mean levels for this time of year, and wind generation was intermittent.

“We’ve increased our coal supply despite the expense and the risk that rain may yet top up the hydro lakes,” Johns said.

“We are actively managing our generation and fuel resources to ensure we make our full contribution to security of supply this winter and beyond,” he said.

In February, Genesis told the market it had replenished its coal stockpile to 500kt after supplies were depleted in 2024.

In the same month, the big four electricity generators – Meridian, Genesis, Mercury and Contact – said they were considering market options to improve national security of supply in response to last winter’s market conditions.

Power prices have been steadily rising this year in response to dry conditions and lower levels in the key hydro lakes.

This week, prices neared $400 per megawatt hour (MWh) – high but well short of last August’s peak of just over $800/MWh.

In midst of last year’s price spike, Genesis struck a “demand response” deal with methanol producer Methanex to take 3.4PJ – 4.4PJ of its gas.

Genesis said the company continued to work with all gas suppliers and potential suppliers to help meet this winter’s demand.

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.