Genesis Energy still plans to close the remaining 500 megawatts of ageing gas and coal-fired electricity generation capacity at its Huntly power station in 2018, despite last week's decision by Contact Energy to close its 400MW Otahuhu-B gas-fired power station next month.
Chief executive Albert Brantley said he was "still comfortable" with the decision to retire the two 250MW Rankine units at Huntly, on the basis that Genesis has been unable to fetch commercially justifiable prices to run the units from wholesale electricity market participants. Genesis said at the time of the closure decision that only a substantial change in market conditions would change its mind.
Meridian Energy chief executive Mark Binns speculated last week that the Contact decision could see a change of heart from Genesis.
Genesis chairwoman Jenny Shipley made it clear that the only reason Genesis would reconsider its decision on the Huntly units would be if the price offered for generation from them became attractive. "It's up to the market to put a value on the Rankines," she said.
For the current financial year, Shipley said the board was expecting earnings before interest, tax, depreciation, amortisation and changes in the value of financial instruments to come in at a similar level to the 2014/15 result, at $344.8 million. That was 12 per cent ahead of the previous year's result, but 5 per cent below the prospectus forecast issued before the April 2014 partial privatisation of the Government-controlled electricity generator and retailer.
Brantley is to retire as chief executive of Genesis Energy at the end of the 2016 financial year. He was appointed to lead Genesis in 2008.