GNE - Genesis Energy

[workingdad]

Consistently successful long-term investing is rarely 'easy'. TA is just one of a bunch of tools available to an investor to assess whether & when they would be best to enter, or exit, an investment. At the least, it can make the decision making process a little easier for the investor.

I think many folk view TA as only being suitable for Traders. I beg to differ.

Sure, for medium/long term investors I wouldn't advocate that they only use the TA tool. However IMO, by using TA in conjunction with other tools & analysis, one can quite effectively evaluate & much better understand the market's view of the company. Therefore either further validating other information that one has gleaned from DD. Or, raising some red flags that may indicate some underlying, often 'hidden', issues. A basic premise to keep in mind is that a price chart will objectively show you WHAT has and is happening (and what MAY more likely happen in the more immediate future). A price chart can also give you a good read on what 'emotional state' the market participants were/are in. But unfortunately, it won't tell you all the reasons WHY it has/is happening.

In answering your question "at what point would buy signals show"? I subscribe to the view that for most medium/long-term investors, if using TA, it is best to keep the KISS theory top of mind.

More specifically use weekly price charts, or even better monthly, rather than using Hrly & Four Hrly (& maybe even daily) charts, which present far too much "noise" for most medium/long-term investors to effectively assess the situation.

Additionally, there is no need to over complicate things by placing multiple indicators on these big-picture charts.

They key objectives of taking this approach are to identify A) the actual medium/long term trend B) Any meaningful Support/Resistance Zones and key Pivot points.

In GNE's case, it has clearly been on a multi-month downtrend (Lower highs - Lower Lows). In fact, it has been pretty much one way traffic since April 2021. A 42% fall from the ATH to the recent low.

But....as I previously alluded price action is now occurring around an area of significant S/R (plus for the FIB geeks - $2.31 marks the 61.8% retracement). Volume has also picked up in recent weeks (which often happens around key turning points).

Some Green (pun intended) shoots perhaps? Are we now finally seeing a significant low forming? Only time will tell, but once the weekly chart starts consistently printing above circa $2.55 then it may be the time for the medium/long-term investor to pounce!

However, be aware & remain vigilant. IF, GNE breaks through this support zone, then IMO it would be much more likely that we would first see some sort of capitulation (bad news?) event.

Thank you FTG. Very thought invoking post and something to give due consideration.

I have looked at the charts of companies bought but never in any real detail or rather to the point that detail sways me one way or another given my thoughts that once I’ve bought anything can happen so look towards more safe bets (not that anything us safe).

I look at sky city casinos where one complaint resulting in an investigation and media coverage can cause such a massive drop, that’s luck (or unlucky) and something that can’t be accounted for so I tend to look at the business itself, assets, perceived risks and future prospects. Your comment on the chart reflecting the emotional state is a very good point and greatly appreciated.

I am mostly in term deposits at the moment, dabbling here and there with a few punts on limited companies such as GNE and more risky air nz with mixed results (doing well with air nz but if GNE breaks down I’ll take a hit). I do have some imputation credits to burn through so have had this as part of my decision making process.

Thanks for such a considered post

[X-men]

Well that is it!! SP back to $2.70 with today update

[bull....]

those who topped up in the low 2.40s looking very good at the moment

[bull....]

yea parts for huntly 5 are on express mail now i believe ... probably why up so aggressively

bull's forsight worked out well lol

[shareman]

Should be a strong recovery I'm the next few weeks, some good news out today

[winner69]

GNE close 239 yesterday …..back to 2017 prices

Seems 220’s on cards

[mike2020]

Why immediately post div? I mean if it was that predictable surely we would have all sold out at 2.54.

[Sideshow Bob]

GNE close 239 yesterday …..back to 2017 prices

Seems 220’s on cards

Could be good for those in the DRP.....

[xafalcon]

GNE close 239 yesterday …..back to 2017 prices

Seems 220’s on cards

Maybe you could share your wisdom by explaining WHY you believe this will happen eg. new information, TA, political environment, imminent regulation, fund divestment, Lake Onslow green light (by the blue team) etc

[winner69]

Maybe you could share your wisdom by explaining WHY you believe this will happen eg. new information, TA, political environment, imminent regulation, fund divestment, Lake Onslow green light (by the blue team) etc

As per my numerous posts over the last year or so based on the spread between the dividend yield and 10 year Govt stock rate….I call this the ‘risk premium’ modelled since GNE listed.

Over the last few months this risk premium has been the lowest it’s been since listing …punters have seen less risk in holding GNE than previously ….quite a bit below average.

Why I say 220’s on the card is 1) Things tend to revert to averages so that risk premium might increase meaning lower share price and 2) reading stuff about GNE seems to suggest there are a few ‘risks’ associated with their performance over the next year which also means that the risk premium might increase.

Insofar as 2) goes I confess that unlike you falcon my knowledge of the industry and the players is very limited. Never really studied it in depth as always seen these stocks as just a divie play and they seem to be rather consistent with those.

However the modelling of the yield/Govt stock is pretty robust and from an investor analytical point of view seems to make sense.

[xafalcon]

2) reading stuff about GNE seems to suggest there are a few ‘risks’ associated with their performance over the next year which also means that the risk premium might increase..
sense.

Interesting, can you outline these risks?

From what I have read, risks mainly seem to be reducing

- Lake Onslow probably cancelled with likely change of government, this is/was the big one
- debt reduction
- solar investment with rapid conversion of capex into income
- increasing retail customer recruitment/retention
- early return to service for Huntly CCGT
- problems with Contact fast-start gas generation equipment
- possession of consented 1GW thermal plant (needed even more if Lake Onslow is not progressing)
- rising oil prices

Other risks are static, and have been known for years

- decline of Kupe
- age of Rankine units

[winner69]

Interesting, can you outline these risks?

From what I have read, risks mainly seem to be reducing

- Lake Onslow probably cancelled with likely change of government, this is/was the big one
- debt reduction
- solar investment with rapid conversion of capex into income
- increasing retail customer recruitment/retention
- early return to service for Huntly CCGT
- problems with Contact fast-start gas generation equipment
- possession of consented 1GW thermal plant (needed even more if Lake Onslow is not progressing)
- rising oil prices

Other risks are static, and have been known for years

- decline of Kupe
- age of Rankine units

Thanks falcon. You are probably right.

As I confessed I’m no expert on such things but short term things like Huntly equipment do signal short term risk.

However the spread between divie yield and 10 year Govt stock is at historical lows …..and whatever the fundamentals are like there is a chance that this will revert to average levels …..seen this reversion to mean/average in my life to ignore it.

[bull....]

another interesting observation is that in past years it has taken between 8 days to 30 days for gne to recover its ex price after a div.
2.55 was the ex price

[workingdad]

I’m thinking I should have bought more when SP was lower. With huntly on track for earlier fix and El Niño weather coming hydro storage and generation won’t be as high next year which bodes well for GNE.

[Grimy]

Share price hasn't risen much lately-so still time if you want more! Was 2.415 a month ago. I've got enough for now........

[FTG]

I’m thinking I should have bought more when SP was lower.

Patience WD, patience....:)

The SP is still consolidating in a solid S/R zone on the chart. No clear & confirmed breakout (either way)....yet.

[workingdad]

Patience WD, patience....:)

The SP is still consolidating in a solid S/R zone on the chart. No clear & confirmed breakout (either way)....yet.

Yep good advice thanks. I’m ok with what I got, did have another cheeky order in before it went ex divy that I missed out on but got a couple of others through. Nothing major so not a lot on table with them.

[workingdad]

Nationals first 100 day plan. “Stop work on the lake onslow scheme”.

[shareman]

Onslow was just a ridiculous waste of money

[Joshuatree]

Nationals first 100 day plan. “Stop work on the lake onslow scheme”.
Shame,Onslow was future proofing our energy needs,a great backup battery plan especially for all the immigrants National are going to entice in, and Eco refugees.

[workingdad]

Shame,Onslow was future proofing our energy needs,a great backup battery plan especially for all the climate ref

But the cost when the country is in so much debt. I’d rather see the companies continuing transition as the have been. Pretty good year for renewable generation

[Bobdn]

Onslow shocking waste of money.

Bring on a fourth Rankine Unit for a tiny tiny tiny fraction of the cost. These Tesla's are not self charging. Let's bring more thermal generation online as soon as possible. Remember: "renewables" only work with thermals lurking in the background to tidy up the inevitable mess.

[na2m1]

Shame,Onslow was future proofing our energy needs,a great backup battery plan especially for all the immigrants National are going to entice in, and Eco refugees.

Agree. Hopefully it will not be too late till we realise the potential of energy storage.

[mike2020]

Shame,Onslow was future proofing our energy needs,a great backup battery plan especially for all the immigrants National are going to entice in, and Eco refugees.

Seriously? You haven't seen the latest immigration figures and yet your quoting an incoming govt as responsible?

[kiwikeith]

Seriously? You haven't seen the latest immigration figures and yet your quoting an incoming govt as responsible?

Watch out if ACT has anything to do with it. They want to open the floodgates.

[mike2020]

Watch out if ACT has anything to do with it. They want to open the floodgates.

So that's two with no idea of the current immigration figures.

[cyclist]

So that's two with no idea of the current immigration figures.

Yep, the floodgates are well and truly already open. And the quality of immigrants is likely overall lower too, compared to when normal processes (checks etc) are followed:

https://www.stuff.co.nz/national/immigration/132853434/shambles-of-our-visa-regime-immigration-staff-reveal-their-truth

[Ricky-bobby]

Well I for one welcome them! We need cheap labour who actually want to work. Having the pack packers come through again is also a massive help. Almost back to normal, but way more expensive!

[Sideshow Bob]

https://www.nzx.com/announcements/420279

Genesis Energy today announced that it has commenced a review of its retail operating model. Subject to the outcome of the review process, a reduction of around 200 roles across FY24 and FY25 may result.

Chief Retail Officer Stephen England-Hall said part of the strategy review is looking at how to simplify the retail business and ensure resources are focused in the right areas to support our customers.

Focus will be on supporting staff through the process which will be confidential to them until the new operating model is confirmed.

Further details on future strategy, operating expenditure and future company performance will be provided at the Genesis Investor Day in November.

ENDS

[winner69]

Update …good or bad

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GNE/420285/405498.pdf

[Sideshow Bob]

Update …good or bad

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GNE/420285/405498.pdf

I think you can always find a bit of both in these sorts of updates.....

[X-men]

I think it is good... reduction of 200-300 staffs....it will result to higher profit

[winner69]

From Market Close today ….Forbar a bit dismal …maybe i might see GNE around 220 soon.

Brokers Forsyth Barr, in a research note, said the electricity sector appeared to have “defied gravity” over the past two years.

“Our analysis suggests the risk of a negative share price reset is rising with a growing risk of earnings downgrades – from 2027 onwards – and the return of a risk on environment favouring cyclical stocks over defensive yield stocks,” it said.

[X-men]

Broker....they have thier own agenda.....

Look at their predictions and analysis..... especially frosty crook.... well...give me a tui

[Joshuatree]

From Market Close today ….Forbar a bit dismal …maybe i might see GNE around 220 soon.

Brokers Forsyth Barr, in a research note, said the electricity sector appeared to have “defied gravity” over the past two years.

“Our analysis suggests the risk of a negative share price reset is rising with a growing risk of earnings downgrades – from 2027 onwards – and the return of a risk on environment favouring cyclical stocks over defensive yield stocks,” it said.

And Craig's
, "with good progress on its Future-gen strategy, potential to provide dry-year risk cover and an attractive yield (~10%), GNE presents as an attractive complementary exposure to our core electricity sector holdings in portfolios."

[X-men]

Well.. which one to believe??? Coin toss?? Head or tail?

I would pick Craig because genesis has an asset that can be used during next year el Nino dry season

On today note... Genesis is getting ready Huntly station which can provide electricity to 400k houses next year if hydro is low

[bull....]

nice to see genesis helping its big power customers reduce their bills

Genesis Energy working with small businesses to move away from fossil fuels
https://www.rnz.co.nz/news/business/500965/genesis-energy-working-with-small-businesses-to-move-away-from-fossil-fuels

i emailed brantley the CEO yrs ago about genesis future and specifally asked him if genesis would transition to more of a marketer of power in the future so im very interested to see if there new strategy update leads this way.
of course he didnt confirm any of my thinking but just said they are always considering there future

[kiora]

Money talks, another development. WOTT?
https://businessdesk.co.nz/article/law-regulation/gentailers-spend-180m-smoothing-waitaki-consent-path?utm_source=7am+Headlines+from+BusinessDesk&utm_campaign=2039ad1baf-7am+Headlines&utm_medium=email&utm_term=0_617c2ef34a-2039ad1baf-446239310

[xafalcon]

Money talks, another development. WOTT?
https://businessdesk.co.nz/article/law-regulation/gentailers-spend-180m-smoothing-waitaki-consent-path?utm_source=7am+Headlines+from+BusinessDesk&utm_campaign=2039ad1baf-7am+Headlines&utm_medium=email&utm_term=0_617c2ef34a-2039ad1baf-446239310

I can't read the article beyond the first few lines, but it sounds Iike a bribe? And $180M? And to various tribes? If true, this is a huge and unnecessary waste of money. Nobody owns water - it falls from the sky, often too much of it. Maybe the tribes should be paying for the devastation the rain caused NZ in the past years??

Seriously, NZ is not known as a corrupt country. But this seems to suggest otherwise

[bull....]

I can't read the article beyond the first few lines, but it sounds Iike a bribe? And $180M? And to various tribes? If true, this is a huge and unnecessary waste of money. Nobody owns water - it falls from the sky, often too much of it. Maybe the tribes should be paying for the devastation the rain caused NZ in the past years??

Seriously, NZ is not known as a corrupt country. But this seems to suggest otherwise

hope this is investigated by the anti corruption brigade

[xafalcon]

Lake Onslow pumped hydro is officially cancelled according to the National-ACT coalition agreement. Terrible decision for NZ Inc, but as a shareholder I expect to be rewarded as future profits are no longer in jeopardy

[Bobdn]

Great news for the country. Billions saved.

GNE is down a lot over the last year - almost 10 per cent ytd. I have 1100 shares in Genesis so every cent move means I'm either up or down $11. I think my maths checks out but I'm happy to be corrected. It's stressful so I try not to look at the price too much.

[bull....]

wow big drop in dividend 20% downward revision :scared:

[alokdhir]

Here we will go 5% down SP ...Not holding ...W69 SP target on horizon $ 2.20 or less !!!

[winner69]

Here we will go 5% down SP ...Not holding ...W69 SP target on horizon $ 2.20 or less !!!

Need to revise the 220 down to 190 odd on the reduced divie

Carnage

[alokdhir]

Need to revise the 220 down to 190 odd on the reduced divie

Carnage

U keep changing your mind mate ...just like broker's estimates which keep going down when stocks slide ...lol

I fully agree if dividend support gone then SP gone too

PS : Expert advise given million times here ...never buy a stock in a downtrend unless its MFT ...lol

[kiwikeith]

Need to revise the 220 down to 190 odd on the reduced divie

Carnage

It will be interesting to see how the share price reacts. Based on the 18.6 c per share dividend over the last 12 months the shares were yielding 7.4% fully imputed. The 14 cents per share dividend forecast is a 5.9% yield which I assume will also be fully imputed. (All numbers based on yesterday's close of 237c). I imagine the market did not see the 18.6c per share as sustainable so some of the dividend cut may already be priced in.

[mike2020]

Had a small holding. Moved it to tra after last dividend. Thanks to all for the insight.

[xafalcon]

After reading their presentation, I'm not thinking it is all bad for shareholders

Yes, dividend is reducing which is a negative

But, the retained profit is being plowed back into fast turnaround projects that will generate increased revenue

And Huntly, as I have long said, is and will be the glue holding NZ electricity generation together (now that Lake Onslow is dead). All the renewable electricity in the world doesn't help if the wind isn't blowing or the sun isn't shining

Meanwhile, interest rates are set to fall worldwide, making to reduced dividend a better investment choice

The key aspect that needs to happen is to arrest the falling SP. A big dividend is great, but if the SP falls it is a false return. An increased focus on growing renewables is a step in the right direction. But I am scratching my head as to why the Huntly battery isn't being installed sooner

[workingdad]

Interesting read from GNE CEO. Lake levels low and pricing for first half of next year climbing, the need for Huntly to support network demands will only increase and he talks about their share price relative to other gentailers.

I still think GNE is undervalued at present and intend to keep nibbling away on some low days. They heading in right direction with increasing renewable generation, under National oil and gas including Kupe will benefit. Like it or not it’s rolling blackouts or gas fired support ex Huntly.

https://www.nzherald.co.nz/business/genesis-boss-malcolm-johns-warns-of-risks-in-power-system/YTBHLR2C3BBSTP3Y7ZAR7GRU6A

[xafalcon]

There is a good interview with Malcolm John's on the Sharesies YouTube channel. It was posted yesterday

https://youtu.be/p__FAN_dGX0?si=NgE0gsiAz8V9vClq

[rabcat]

From what I've read the country needs Huntley to provide power to keep the system working when there is no wind or sun etc. However at this time Huntley uses fossil fuels, which in the long term is a problem.
So why can't GNE change Huntley over to run on Hydrogen which is a clean energy? Then everyone would be happy.
Sèems to me they could make hydrogen in the middle of the night when there is excess electricity in the system.

[mwri]

From what I've read the country needs Huntley to provide power to keep the system working when there is no wind or sun etc. However at this time Huntley uses fossil fuels, which in the long term is a problem.
So why can't GNE change Huntley over to run on Hydrogen which is a clean energy? Then everyone would be happy.
Sèems to me they could make hydrogen in the middle of the night when there is excess electricity in the system.

Well the problem with hydrogen is you need a heap of energy for the electrolysis to get it from water, so unless they’re willing to do that during times of cheap power, store it and then burn it when it’s profitable GNE is gonna have to look elsewhere. They’ve been talking about using biofuels which is a start

[GTM 3442]

That makes perfect sense from an integrated, strategic point of view, but the New Zealand electricity system does not have an integrated, strategic focus.

[Joshuatree]

There is a good interview with Malcolm John's on the Sharesies YouTube channel. It was posted yesterday

https://youtu.be/p__FAN_dGX0?si=NgE0gsiAz8V9vClq

Thanks ,👍that's a great interview,alot of info there.Removing the ESG share price discount looks very doable as this company resets for the renewable energy future targets.Would have liked a discussion about Kupe but overall very impressed with M John.

[xafalcon]

Is Huntly CCGT back on line early? Or doing some acceptance / other testing? Transpower is reporting 468MW gas generation atm.

[workingdad]

Is Huntly CCGT back on line early? Or doing some acceptance / other testing? Transpower is reporting 468MW gas generation atm.

Decent stats released this morning and confirming it is up and running again.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GNE/425094/411264.pdf

[FTG]

From a TA perspective, for the med-long term investors there MAY be some signs of green shoots (pun intended) starting to appear with the GNE share price.

A low was printed late Oct (nicely coinciding with bond markets printing an interim bottom), and there has been 10% move to the upside since.

BUT on a cautionary note, the move up has been rather laboured, and certainly not on an expanding volume basis.

GNE is now kissing a reasonably significant downward trend line (originating in Jan 2021), along with the 200 EMA. Will it clearly breakthrough, & hold above this zone?

[winner69]

From a TA perspective, for the med-long term investors, there MAY be some signs of green shoots (pun intended) starting to appear with the GNE share price.

A low was printed late Oct (nicely coinciding with bond markets printing an interim bottom), and there has been 10% move to the upside since.

BUT on a cautionary note, the move up has been rather laboured, and not on expanding volume.

GNE is now kissing a reasonably significant downward trend line (originating in Jan 2021). Will it clearly breakthrough, & hold above that trendline? Only time will tell.

Unwinding that ‘ESG Discount’ that GNE was lumbered with starting but still quite a long way to go

We’ll get there later this year

[bull....]

another interesting observation is that in past years it has taken between 8 days to 30 days for gne to recover its ex price after a div.
2.55 was the ex price

taken a bit longer this time but gne has never failed i believe to regain its ex div price

[workingdad]

From a TA perspective, for the med-long term investors there MAY be some signs of green shoots (pun intended) starting to appear with the GNE share price.

A low was printed late Oct (nicely coinciding with bond markets printing an interim bottom), and there has been 10% move to the upside since.

BUT on a cautionary note, the move up has been rather laboured, and certainly not on an expanding volume basis.

GNE is now kissing a reasonably significant downward trend line (originating in Jan 2021), along with the 200 EMA. Will it clearly breakthrough, & hold above this zone?

I rolled the dice on them in the 2.40’s and pleased to see them increasing their market share with customer base. I anticipate a drier summer limiting renewables from hydro generation and huntly back in line is well placed to capitalize on this. Comparing to other gentailers it’s share price has underperformed, maybe with the investing into solar versus maximizing dividends is part of that but my simple thought on it is more upside than down. Not anticipating stellar performance but room for improvement.

[Marilyn Munroe]

From what I've read the country needs Huntley to provide power to keep the system working when there is no wind or sun etc. However at this time Huntley uses fossil fuels, which in the long term is a problem.
So why can't GNE change Huntley over to run on Hydrogen which is a clean energy? Then everyone would be happy.
Sèems to me they could make hydrogen in the middle of the night when there is excess electricity in the system.

Movie stars making predictions about the future has a mixed history, but I'm not going to let that stop me.

Someone will build a 1,000Mw thermal power station adjacent to the Auckland Isthmus within the next ten years. It will be needed to keep the lights on.

Boop boop de do
Marilyn

[xafalcon]

Movie stars making predictions about the future has a mixed history, but I'm not going to let that stop me.

Someone will build a 1,000Mw thermal power station adjacent to the Auckland Isthmus within the next ten years. It will be needed to keep the lights on.

Boop boop de do
Marilyn

No chance of getting resource consent

That is why Huntly is such a valuable (and under-valued) asset. It already has resource consent and emissions allowances for over 1000 MW of thermal

It is also why the government stopping Lake Onslow was such a short-sighted moronic decision. But that chapter is history now

[bull....]

good news for S/H

Thousands of Kiwis' power bills are about to get more expensive after Genesis Energy revealed it's raising its prices again

https://www.newshub.co.nz/home/new-zealand/2024/01/kiwis-urged-to-shop-around-after-power-provider-reveals-further-price-hikes.html

[winner69]

good news for S/H

Thousands of Kiwis' power bills are about to get more expensive after Genesis Energy revealed it's raising its prices again

https://www.newshub.co.nz/home/new-zealand/2024/01/kiwis-urged-to-shop-around-after-power-provider-reveals-further-price-hikes.html


Consumers to pay more …shareholders taking a 20% cut in divies

Got to pay for things somehow eh

[xafalcon]

good news for S/H

Thousands of Kiwis' power bills are about to get more expensive after Genesis Energy revealed it's raising its prices again

https://www.newshub.co.nz/home/new-zealand/2024/01/kiwis-urged-to-shop-around-after-power-provider-reveals-further-price-hikes.html


That article was clearly written by an imbecile, and never peer reviewed

One customer's power bill going from $0.60/day to $0.90/day. So this "customer" uses no power and doesn't pay GST??? The low user tariff is increasing from $0.60/day to $0.90/day plus GST.

One customer's power bill "doubled", with a 1.6% average increase. A doubling would be 100%........

The low user tariff was never targeted as helping low income families. It was targeted by the government at promoting energy efficiencies (savings) and to avoid penalising ICP's that use very little power like bach's

It was labour that decided that low income families were missing out on these low user tarrifs, so Labour mandated their phase out over 5 or 6 years, with a review at the midpoint

Anyway, GNE did state their intention to pass these annual low user tariff increases along in February every year. So this isn't really a new occurrence, they did it last February as well

Personally I recently locked into a 5 year solar power fixed plan with Meridian, so no increases for me for another 4.5 years and a super-good buy-back rate for my excess solar power

I will note that GNE was previously my electricity supplier, but would not match the Meridian offer. I gave them two chances to retain my business before switching. So much for customer retention, maybe that team has been disestablished???

[Dlownz]

That article was clearly written by an imbecile, and never peer reviewed

One customer's power bill going from $0.60/day to $0.90/day. So this "customer" uses no power and doesn't pay GST??? The low user tariff is increasing from $0.60/day to $0.90/day plus GST.

One customer's power bill "doubled", with a 1.6% average increase. A doubling would be 100%........

The low user tariff was never targeted as helping low income families. It was targeted by the government at promoting energy efficiencies (savings) and to avoid penalising ICP's that use very little power like bach's

It was labour that decided that low income families were missing out on these low user tarrifs, so Labour mandated their phase out over 5 or 6 years, with a review at the midpoint

Anyway, GNE did state their intention to pass these annual low user tariff increases along in February every year. So this isn't really a new occurrence, they did it last February as well

Personally I recently locked into a 5 year solar power fixed plan with Meridian, so no increases for me for another 4.5 years and a super-good buy-back rate for my excess solar power

I will note that GNE was previously my electricity supplier, but would not match the Meridian offer. I gave them two chances to retain my business before switching. So much for customer retention, maybe that team has been disestablished???

Customer retention teams basically don't exist anymore. Labour put a end to that too. I use to be with mercury and everytime I'd go to leave they would offer me deals. Sometimes I said no and they would still come back cheaper. From memory I was locked in for two year and achieved a night time rate of 9cent s a kW great with the electric car. Since then I've been with genisis, electric kiwi and now powershop. Electric kiwi would be one of the most expensive now from the cheapest 2 year years ago. I shop around alot 😊

[bull....]

That article was clearly written by an imbecile, and never peer reviewed

One customer's power bill going from $0.60/day to $0.90/day. So this "customer" uses no power and doesn't pay GST??? The low user tariff is increasing from $0.60/day to $0.90/day plus GST.

One customer's power bill "doubled", with a 1.6% average increase. A doubling would be 100%........

The low user tariff was never targeted as helping low income families. It was targeted by the government at promoting energy efficiencies (savings) and to avoid penalising ICP's that use very little power like bach's

It was labour that decided that low income families were missing out on these low user tarrifs, so Labour mandated their phase out over 5 or 6 years, with a review at the midpoint

Anyway, GNE did state their intention to pass these annual low user tariff increases along in February every year. So this isn't really a new occurrence, they did it last February as well

Personally I recently locked into a 5 year solar power fixed plan with Meridian, so no increases for me for another 4.5 years and a super-good buy-back rate for my excess solar power

I will note that GNE was previously my electricity supplier, but would not match the Meridian offer. I gave them two chances to retain my business before switching. So much for customer retention, maybe that team has been disestablished???

i dont think gne will miss you they are gaining customers overall and churn is trending down nicely. you must have been in a zone where they dont need to compete hard

[xafalcon]

i dont think gne will miss you they are gaining customers overall and churn is trending down nicely. you must have been in a zone where they dont need to compete hard

Yes, I know you are correct. We have a huge solar power system, I built some massive home batteries from EV batteries, and we are a net power exporter. So they made their money from us by arbitrage on our solar export

But being a shareholder, I really wanted to stay with GNE. Plus, I liked their EVerywhere plan

Anyway, GNE seem to be doing OK on customer numbers for the past few years

[bull....]

Yes, I know you are correct. We have a huge solar power system, I built some massive home batteries from EV batteries, and we are a net power exporter. So they made their money from us by arbitrage on our solar export

But being a shareholder, I really wanted to stay with GNE. Plus, I liked their EVerywhere plan

Anyway, GNE seem to be doing OK on customer numbers for the past few years

i imagine payback was relatively quick on your solar setup.
i have a nice big nth facing into the sun skillon roof perfect for a large solar setup but unfortunately for me financials just dont stack up going solar. at payback it wouldnt be long after that the panels would need replacing again. :( so no go

[iceman]

Yes, I know you are correct. We have a huge solar power system, I built some massive home batteries from EV batteries, and we are a net power exporter. So they made their money from us by arbitrage on our solar export

But being a shareholder, I really wanted to stay with GNE. Plus, I liked their EVerywhere plan

Anyway, GNE seem to be doing OK on customer numbers for the past few years

But if you’re a net exporter, why are you moving away from them because they raised their prices ?

Im with Genesis and am a net exporter. Im just hoping they’re increasing their buyback rate as well as the power charges

Do you mind me asking what buyback rate Meridian offered ?

[xafalcon]

i imagine payback was relatively quick on your solar setup.
i have a nice big nth facing into the sun skillon roof perfect for a large solar setup but unfortunately for me financials just dont stack up going solar. at payback it wouldnt be long after that the panels would need replacing again. :( so no go

Yes, payback was about 3.5 years. I have 20KW of solar panels, 60-70KWh of battery storage, and the ability to discharge batteries to the grid. I designed and installed the system myself, bought panels cheaply by the pallet load from installers quitting superseded stock, and built the storage batteries myself using EV batteries. Cost us about $24K all up, but built in stages over 4 years to spread the cost

Each year we save $3K in electricity, $3K in petrol and get $2K from the electricity company. We are now fully paid off

Get a quote from a company that let's you help do the install, and don't get a quote from Harrison's as they are OTT expensive. Don't get a battery, build a big 10KW system and export during summer and use that credit during the winter. And use your electric hot water cylinder as a battery (there are devices that automate this function). You should get a 6-7 year payback, maybe even 5 years

[xafalcon]

But if you’re a net exporter, why are you moving away from them because they raised their prices ?

Im with Genesis and am a net exporter. Im just hoping they’re increasing their buyback rate as well as the power charges

Do you mind me asking what buyback rate Meridian offered ?

No i did not change electricity companies because GNE raised their prices. But because I got a much better offer from Meridian ($0.17/KWh vs $0.12/KWh from GNE). We export about 12MWh each year, so the difference is $600, or $3K over 5 years. Plus, with Meridian, everything is fixed for 5 years, even the low user daily fee. Strangely, the 5 year fixed only applies to Meridian's side of the deal, I am only locked in for 2 years. I fully expect to stay for 5 years though

We export every month except June where we are neutral. I built the system this way

[CD_CHCH]

i imagine payback was relatively quick on your solar setup.
i have a nice big nth facing into the sun skillon roof perfect for a large solar setup but unfortunately for me financials just dont stack up going solar. at payback it wouldnt be long after that the panels would need replacing again. :( so no go

We're in Christchurch with 5.4KW of panels and a 5KW Inverter, no battery but have smart diverter to heat water cylinder before any surplus power gets exported, system produces about 7MWh each year and we try to use as much of that as we can.

Having solar has roughly halved our power bill each year but as the cost of power goes up the savings should increase, especially as the export rate we receive has risen from 8.5 cents to 13 cents since the system was installed.

Our solar panels face 13 degrees East of true North.

[Muse]

Yes, payback was about 3.5 years. I have 20KW of solar panels, 60-70KWh of battery storage, and the ability to discharge batteries to the grid. I designed and installed the system myself, bought panels cheaply by the pallet load from installers quitting superseded stock, and built the storage batteries myself using EV batteries. Cost us about $24K all up, but built in stages over 4 years to spread the cost

Each year we save $3K in electricity, $3K in petrol and get $2K from the electricity company. We are now fully paid off

Get a quote from a company that let's you help do the install, and don't get a quote from Harrison's as they are OTT expensive. Don't get a battery, build a big 10KW system and export during summer and use that credit during the winter. And use your electric hot water cylinder as a battery (there are devices that automate this function). You should get a 6-7 year payback, maybe even 5 years

Thats so cool.

Wish I was remotely capable of doing something like that myself.

[iceman]

No i did not change electricity companies because GNE raised their prices. But because I got a much better offer from Meridian ($0.17/KWh vs $0.12/KWh from GNE). We export about 12MWh each year, so the difference is $600, or $3K over 5 years. Plus, with Meridian, everything is fixed for 5 years, even the low user daily fee. Strangely, the 5 year fixed only applies to Meridian's side of the deal, I am only locked in for 2 years. I fully expect to stay for 5 years though

We export every month except June where we are neutral. I built the system this way
Great stuff. Thanks for the response. That’s a great buyback rate you’ve got from Meridian. I better start looking around 😀

[stoploss]

Have a look here
https://poweredge.nz/

[xafalcon]

Have a look here
https://poweredge.nz/

That is a very good buy back rate, and hot off the press in the last few days. But always check that your export credit will be paid out. Some companies (like Octopus) only allow the solar buy back credit to be used to offset your electricity purchases. So if your buy back credit exceeds your power purchases, you effectively get a reduced buy back rate

Meridian also gave me a $300 welcome credit, which will pay my daily fixed charges ($0.69/day incl gst for us) for about a year

[kiora]

"FORESTA SECURES 10-YEAR WOOD SUPPLY AGREEMENT FOR PLANNED LOW EMISSIONS FUEL PLANT AT KAWERAU"
"The plant will produce torrefied black wood pellets which are a seamless drop-in replacement for coal as a fuel source in boilers without any loss of energy intensity while also significantly reducing carbon emissions. A recent Genesis trial at Huntly power station using similar pellets reduced emissions by at least 90%."
http://www.sharechat.co.nz/article/3e193245/foresta-secures-10-year-wood-supply-agreement-for-planned-low-emissions-fuel-plant-at-kawerau.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+12+A pril+2024

[MauroNZ]

Yes, payback was about 3.5 years. I have 20KW of solar panels, 60-70KWh of battery storage, and the ability to discharge batteries to the grid. I designed and installed the system myself, bought panels cheaply by the pallet load from installers quitting superseded stock, and built the storage batteries myself using EV batteries. Cost us about $24K all up, but built in stages over 4 years to spread the cost

Each year we save $3K in electricity, $3K in petrol and get $2K from the electricity company. We are now fully paid off

Get a quote from a company that let's you help do the install, and don't get a quote from Harrison's as they are OTT expensive. Don't get a battery, build a big 10KW system and export during summer and use that credit during the winter. And use your electric hot water cylinder as a battery (there are devices that automate this function). You should get a 6-7 year payback, maybe even 5 years

Hey mate thanks for sharing that, do you have by any chance any helpful links to learn about it? I have some basic electrical knowledge but that's it. It would be great to hear more about how you made it. Thanks.

[workingdad]

I’m trying to figure out why GNE is 15% down in 12 months versus other gentailers up 10-15% over same period. A 30% swing compared to industry is rather significant.

[mike2020]

Lower divs indicated, cap ex coming and variable generation expenses. I think less hydro at the moment. Just things I have read over the last 9 months here and there. I had a small holding.

[winner69]

……..and investors yield expectations beginning to revert to long term average ….they want a higher yield than what they we’re getting at 250

Reduced dividend hasn’t help and GNE still seen as relatively ‘risky’

[fish]

……..and investors yield expectations beginning to revert to long term average ….they want a higher yield than what they we’re getting at 250

Reduced dividend hasn’t help and GNE still seen as relatively ‘risky’

Dividend was reduced to pay for current investments into renewables.
7 cents plus imputation credits every 6 months gives approx yield 8% p.a.
No obvious risk to this dividend
Additional Renewables in addition to thermal should make genesis less risky .

[xafalcon]

I’m trying to figure out why GNE is 15% down in 12 months versus other gentailers up 10-15% over same period. A 30% swing compared to industry is rather significant.

The removal of GNE from an index fund lead to the largest trading volumes since listing. This sustained selling is always going to hurt SP

The dividend has been reduced (Kupe revenue will now pay for solar and battery projects without any capital raise), which will hurt SP in the short term

Huntly unit 5 had a failure that took a very long time to repair, and the cost is still sitting on GNE balance sheet. Insurance will pay out eventually, but is taking a very long time to resolve. After Insurance, the failure will still cost GNE $25M

Recently a lot of money has been spent on improving Kupe gas output. Current indirect signs (Rankines running rather than CCGT) indicate this is not going as planned

High interest rates have and inverse effect on yield stock like GNE. And we all know that interest rates have stayed higher for longer than expected (or necessary). The RB governor's thin skin and wilful ignorance of basic economics is causing unnecessary pain in many areas of the economy (and labour reappointed him for another 5 year term)

Senior management has recently changed, and IMO they are not understanding their role in promoting the company as an investment opportunity that is currently significantly under valued

I'm pretty sure the SP will improve in the next 6 months as many of the above headwinds disappear or become tailwinds

[workingdad]

Good posts thanks all.

I thought the market was more forward thinking and looking at operations reports they are increasing their market share month on month, renewables investment wise, national govt signaling oil and gas investment needed and supported.

I’ve had a couple of small bites in last few months and thinking about some more given it seems to be discounted compared to the other sector players but the SP weakness I anticipated to make it a buy signal hasn’t happened.

[winner69]

GNE current yield after tax 5.66% v 10 year Govt at 3.35% …..difference of 2.31% points

Since listing that difference has been 3.9% points but there is a case to say last few years is more relevant and difference is say 3.0% points

So to maintain that 3.0% points difference GNE would be a post tax yield of 6.35% ….implying a share price ofvabout $2.00

Here’s the updated chart of the difference between Govt 10 and GNE divie yield

Some would say that the difference is a reflection of ‘risk’. Seems punters see GNE less ‘risky’ than in the past and are prepared to accept what’s on offer. (My view is that GNE is still relatively ‘risky’)

Some will say this ‘analysis’ is a load of codswallop ..sobeit but it has served me well over the last couple of years iand avoiding the temptation to take a punt on GNE and avoided capital losses.

[Goose]

This kind of chart adds value winner, thanks for sharing.

[Bobdn]

I wonder if the Genesis share price benefits from the avalanche of cash that goes into KiwiSaver funds each fortnight . Its included in KiwiSaver funds right? Ok it's not included in mine, a default fund (the other power boards are) but it's probably in my other managed funds - nope can't see it in the list of NZ shares in either fund. Weird.

Well at least our very own NZ Super Fund will have a chunk I guess...just checking - nope they divested in 2017. Something about fossil fuels and coal.

Now I'm no expert but people have to be wanting to buy for the price to be bid up I think. Happy to be corrected.

[winner69]

CEO Malcolm Johns tells us the so-called ESG discount applied to the Genesis share price will be unwound because of his recently announced strategy …. discount probably more than 30% now

If so GNE shareprice could be about $3.50 …divie yield of 5.7% ….if he doesn’t cut the divie again

I think Johns is in fantasy land

[Bobdn]

That's interesting. I didnt realise it had been calculated. I only have 1000 Genesis shares now, my last individual holding, so no longer follow.

I should also point out, my portfolio is 7 per cent Energy (real energy, the stuff that our prosperity has been built on not the other stuff) which is almost twice the weighting in the S&P500. Hence my default KiwiSaver fund. I don't need anymore plus I needed some bonds to balance everything out.

[xafalcon]

CEO Malcolm Johns tells us the so-called ESG discount applied to the Genesis share price will be unwound because of his recently announced strategy Â…. discount probably more than 30% now

If so GNE shareprice could be about $3.50 Â…divie yield of 5.7% Â….if he doesnÂ’t cut the divie again

I think Johns is in fantasy land

Where do you get this "stuff" from? When I listened to Malcolm (annual result presentation and on Sharsies podcast), I herd something different. I herd him say that GNE suffers from a SP penalty due to ESG, but I never herd him say anything about 30% or any percentage at all. When did he quantify it at 30%?

I never herd him say that the new strategy would remove the ESG penalty. Where did he state this? I did hear him say it is expected to reduce the penalty over time

And I also herd him say that GNE SP is burdened with this penalty, even though coal and gas are necessary to keep the lights on. He went on to say that the burden must be shared, and NZ must understand that it is not possible to eliminate thermal generation with our current and future generation mix. This was to be discussed with government and other generators

14cps / 350c = 4% yield before tax. Assuming 80% imputation and 33% personal tax rate = 3.8% after tax. GNE has been providing 100% IC's with recent dividends, but I see this as a short term benefit rather than an ongoing situation

I think the new CEO has been quite grounded in his comments that I herd. But I look forward to hearing your reply about when statements you attribute to him were made

[kiwikeith]

Where do you get this "stuff" from? When I listened to Malcolm (annual result presentation and on Sharsies podcast), I herd something different. I herd him say that GNE suffers from a SP penalty due to ESG, but I never herd him say anything about 30% or any percentage at all. When did he quantify it at 30%?

I never herd him say that the new strategy would remove the ESG penalty. Where did he state this? I did hear him say it is expected to reduce the penalty over time

And I also herd him say that GNE SP is burdened with this penalty, even though coal and gas are necessary to keep the lights on. He went on to say that the burden must be shared, and NZ must understand that it is not possible to eliminate thermal generation with our current and future generation mix. This was to be discussed with government and other generators

14cps / 350c = 4% yield before tax. Assuming 80% imputation and 33% personal tax rate = 3.64% after tax. GNE has been providing 100% IC's with recent dividends, but I see this as a short term benefit rather than an ongoing situation

I think the new CEO has been quite grounded in his comments that I herd. But I look forward to hearing your reply about when statements you attribute to him were made

I don't mind the odd spelling mistake but you misspelt heard as herd six times.

[RTM]

I don't mind the odd spelling mistake but you misspelt heard as herd six times.

Yep, he did. But it was a good post.

[xafalcon]

I don't mind the odd spelling mistake but you misspelt heard as herd six times.

Yep I debated that, and wasn't sure weather to use an "a" in their or not. But as it's consistent, it only counts as one mistake made several times. The actual spelling was correct, for a herd of cows, so spell checker was no help in this instance. I took a punt, and left out the "a". English.... whoever dreamed it up, should have been shot and the dictionary immediately destroyed, just like Blackadder wanted. And now the world even has regional variations of English spelling, with americans swapping z for s and leaving out important u's

And yes, I used weather and their for your continued entertainment....

[winner69]

Xafalcon …I get my ‘stuff’ re GNE mainly from media reports. There was a good piece by Patrick Smellie in BusinessDesk following a day long preso to analysts et all and a site visit at Huntly

Maybe I was not exactly correct in what Malcolm said but the gist of what I was said seems to was what he was getting at at that preso.

Malcolm might not have actually said the ESG discount was 30% but general consensus is ‘depends on who you talk to the discount is 20% to 30%’. I think it’s fair to assume the updated strategy is aimed at trying to close that and even if not specifically said that is the strong implication isn’t it.

I like one quote by Malcolm from that day that there is “no market segment or political constituency for cold showers by candlelight”.

Whatever keep up your detailed reporting of the things you herd in different events …they are valuable ….and more specific than my generalised stuff eh

[fish]

I’m trying to figure out why GNE is 15% down in 12 months versus other gentailers up 10-15% over same period. A 30% swing compared to industry is rather significant.

My feeling is that the market has failed to appreciate the value of thermal energy shown by our current energy situation and wholesale prices.
Personally I continue to take advantage of this by buying gne

[winner69]

My feeling is that the market has failed to appreciate the value of thermal energy shown by our current energy situation and wholesale prices.
Personally I continue to take advantage of this by buying gne

You going to do well fish. …Forbsr have raised their target price to $3.05

[workingdad]

I’m still deliberating on nibbling at some more and value the various insights since asking the question.

[Joshuatree]

I’m still deliberating on nibbling at some more and value the various insights since asking the question.

Great question WD and responses team,👍
Fwiw Craig's have a neutral rating and favour CEN,MEL and MCY over GNE with MWA last

"Key risks include structural and regulatory change, wholesale an retail competition, and project development risk."

[Dlownz]

Well they just put up my bottled gas prices by 60%. That's got to be a win for shareholders 😂

[workingdad]

Great question WD and responses team,👍
Fwiw Craig's have a neutral rating and favour CEN,MEL and MCY over GNE with MWA last

"Key risks include structural and regulatory change, wholesale an retail competition, and project development risk."

Thanks to all for the valuable thoughts and input.

I don’t see regulatory change as a big risk under National. We are already facing the challenges of supply demands from labour/greens which is rapidly decreasing and with this comes public awareness relative to pricing.

Its not without risk, SP price is offsetting this a bit, I like their EV/PHEV plan with taking pricing plan to public chargers and I suspect why they are gradually increasing customer base over the year. Might sit back for a little bit longer and see if the declining SP shows some better signals.

[xafalcon]

Gas supply is confirmed as insufficient to supply contracted volumes. Huntly to import more coal. Other generators to consider funding coal stockpile. In a perverse way, this is all good news for GNE - higher gas prices, higher electricity prices, forces the issue of coal funding, potentially raises the issue of funding thermal generation stay in business costs

[kiora]

Yep we're running out of gas
https://www.1news.co.nz/2024/05/08/genesis-energy-to-fire-up-coal-imports-amid-dwindling-gas-supply/

[mfd]

Labour got the blame for coal imports caused by dry weather, I wonder if national will get the blame for coal imports caused by poor gas supply. Probably easier than having a mature discussion on where to proceed now that Onslow has been ditched

[RTM]

https://www.nzherald.co.nz/business/genesis-to-resume-coal-buying-as-gas-shortage-looms/IFZAYEM5IBBNLJDZPHOMFPYEXE/

I wonder if Aderns decision on exploration had any bearing on this ? I guess not for this near term shortage.
Do we have coal in NZ that we should be mining instead of importing ?

[winner69]

https://www.nzherald.co.nz/business/genesis-to-resume-coal-buying-as-gas-shortage-looms/IFZAYEM5IBBNLJDZPHOMFPYEXE/

I wonder if Aderns decision on exploration had any bearing on this ? I guess not for this near term shortage.
Do we have coal in NZ that we should be mining instead of importing ?


Lots of coal in NZ …good quality stuff as well

Seems stupid importing

[Toddy]

There is gas under the ground in NZ too.

But as NZO has stated. We can make more money drilling for gas in Australia then shipping it back to NZ.

The consumer pays at the end of the day.

[Ggcc]

Lots of coal in NZ …good quality stuff as well

Seems stupid importing
Met a guy some time back from NZ who owned a coal mine in Indonesia. Yes our NZ coal is good, but the mining they were doing in Indonesia was profitable. He said he would struggle to make money here in NZ. He also exported his coal to NZ.

[Bjauck]

Lots of coal in NZ …good quality stuff as well

Seems stupid importing
If NZ coal production is subject to export contracts, then it would make sense to import for Huntly's stockpile. Also I think the type and grade of the coal can be important.

I am not sure how the cost of extraction from NZ mines for the volumes required compare with overseas sources of coal.

[Marilyn Munroe]

If NZ coal production is subject to export contracts, then it would make sense to import for Huntly's stockpile. Also I think the type and grade of the coal can be important.

I am not sure how the cost of extraction from NZ mines for the volumes required compare with overseas sources of coal.

Coal exported from the Buller mines is metallurgical coal used in steel making and thus commands a premium over steaming coal. It would not be economic to use this coal to raise steam when steaming coal even when transported from far away is cheaper.

NZ has no large easy mineable deposits of steaming coal like for example the US Powder River Basin. This means importing is the most economic option.

Chrystal ball gazing time: A 1,00Mw thermal generating plant should be built adjacent to the Auckland Isthmus. Yeah I know. It would cause a large section of NZ's population to start rending their garments.

Boop boop de do
Marilyn

[RTM]

Coal exported from the Buller mines is metallurgical coal used in steel making and thus commands a premium over steaming coal. It would not be economic to use this coal to raise steam when steaming coal even when transported from far away is cheaper.

NZ has no large easy mineable deposits of steaming coal like for example the US Powder River Basin. This means importing is the most economic option.

Chrystal ball gazing time: A 1,00Mw thermal generating plant should be built adjacent to the Auckland Isthmus. Yeah I know. It would cause a large section of NZ's population to start rending their garments.

Boop boop de do
Marilyn

Thanks. 'Spose that's good as we not ripping up big areas of NZ just so we can turn the lights on.

[Marilyn Munroe]

Spot electricity prices spiked to $4,900 at Otahuhu 8:00AM this morning.

Common practice at overseas coal powered generating plants is to have two stockpiles of coal. One, the largest, is standard steaming coal with is used in ordinary operations. The other is high heat value quick burning coal which is used to raise output quickly in situations such as this mornings spike.

I don't know if Huntly uses this practice. Does the control room yell down the speaker tube telling Paddy the stoker to start shoveling from the other stockpile and make some cash for the shareholders?

Boop boop de do
Marilyn

[mike2020]

I was listening to the radio in the car yesterday and they were discussing this exact thing. Reefton has all the answers.

[Waikaka]

Coal exported from the Buller mines is metallurgical coal used in steel making and thus commands a premium over steaming coal. It would not be economic to use this coal to raise steam when steaming coal even when transported from far away is cheaper.

NZ has no large easy mineable deposits of steaming coal like for example the US Powder River Basin. This means importing is the most economic option.

Chrystal ball gazing time: A 1,00Mw thermal generating plant should be built adjacent to the Auckland Isthmus. Yeah I know. It would cause a large section of NZ's population to start rending their garments.

Boop boop de do
Marilyn

True that Buller is high quality bituminous coal ideal for coking coal. Not used to 'steaming' coal terminology but ill swap that out for one I am used to which is thermal coal.

Maramarua (204,790 tonnes in 2022) and Rotowaro (406,848 tonnes in 2022) in the Waikato still produce plenty of thermal coal. Mainly for Fonterra for milk processing and Glenbrook for steel. Wouldn't be that hard to get enough production for Huntly but unfortunately the cheapest Indonesian thermal coal is high ash and high sulphur, China banned it about 10 years ago making it the cheapest thermal coal in the market. No standards here so GNE chooses to screw local workers and the environment both in Indo and here to save a few bucks.

https://www.theguardian.com/world/2014/sep/17/chinas-ban-on-dirty-coal-could-cost-australian-mining-almost-15bn

Your correct we don't have a deposit like Powder river basin but plenty of mapped thermal coal resources in the Waikato we could use to save some Indonesian rainforest, help our balance of trade and make a few local jobs. Better if Labour hadn't gutted the gas industry, then this wouldn't be the crappy trade off we are left with.

[kiora]

Some background info here

https://www.gem.wiki/Huntly_power_station

"is fuelled by a blend of local and Indonesian coal, gas from south Taranaki’s Kupe field, and recently, Canadian wood pellets, pressed and processed to resemble the thermal efficiency of coal, albeit without the emissions."

https://www.waikatotimes.co.nz/a/nz-news/350014876/last-its-kind-waikatos-cathedral-power

[xafalcon]

True that Buller is high quality bituminous coal ideal for coking coal. Not used to 'steaming' coal terminology but ill swap that out for one I am used to which is thermal coal.

Maramarua (204,790 tonnes in 2022) and Rotowaro (406,848 tonnes in 2022) in the Waikato still produce plenty of thermal coal. Mainly for Fonterra for milk processing and Glenbrook for steel. Wouldn't be that hard to get enough production for Huntly but unfortunately the cheapest Indonesian thermal coal is high ash and high sulphur, China banned it about 10 years ago making it the cheapest thermal coal in the market. No standards here so GNE chooses to screw local workers and the environment both in Indo and here to save a few bucks.

https://www.theguardian.com/world/2014/sep/17/chinas-ban-on-dirty-coal-could-cost-australian-mining-almost-15bn

Your correct we don't have a deposit like Powder river basin but plenty of mapped thermal coal resources in the Waikato we could use to save some Indonesian rainforest, help our balance of trade and make a few local jobs. Better if Labour hadn't gutted the gas industry, then this wouldn't be the crappy trade off we are left with.

The Huntly power station is literally, built on top of a coal mine. I believe this is why it was located there, to access local coal. And just up the road was Meremere, which used to have a cool bucket line that carried coal from a mine on the other side of the river

It is such a sorry state of affairs, when coal beneath the foundations of the power station is being overlooked and Indonesian coal is transported 5000km(?) by sea and trucked 100km from the port. No wonder NZ Inc is falling further and further down the prosperity index

But I think this situation is probably being played by GNE to leverage financial backing of the coal stockpile and the overhaul of the NZ electricity market which heavily penalises GNE with the Max Bradford pricing mechanism

[Bobdn]

Tonight/tomorrow morning, Genesis, with its beautiful coal burners, will stand between us and blackouts/ economic oblivion.

I may have mostly deserted the Genesis ship with my pitiful 1000 shares to get outlandish returns in foreign shores, but I'm still an owner. I'd be shoveling coal for free if given the chance (well, food would have to be provided).

[Bobdn]

My monster Rinnai gas heater is doing the business at the moment. I'm doing my best to take pressure off the electricity market which appears to be out of control just now.

Burning barrels of oil(edit: diesel) at Whirinaki is expensive!

[Panda-NZ-]

Why can't the govt compensate rio to shut down the aliminium smelter during days of high demand.

Or.. fast track the withdrawal.

[NZSilver]

Why has genesis taken a hit over the last few weeks ? Haven't been following. Is it Esg concerns after they said they are going to stockpile coal?

[Snoopy]

Why can't the govt compensate rio to shut down the aluminium smelter during days of high demand.


You have been sleeping for too long Panda. It is no longer 1977. The power system is now run at arms length from the government with a bid/offer system open to all generators, with Transpower keeping a watching brief and 'jawboning' when necessary (such as this morning). Tiwai have a supply contract with Meridian/Contact. They are already being compensated for having agreed to shut down operations at peak demand time by the lower unit price they pay at other times.




Or.. fast track the withdrawal.


Tiwai are no longer planning to go is the word.

And sorry to be the one to break this news to you. But Rob Muldoon is no longer leading the National party or the government. In fact, he has died.

SNOOPY

[Panda-NZ-]

Sorry for coming up with ideas to keep the lights on in NZ, Snoops.

[mike2020]

How about healthy modern homes. We haven't turned the heat on at home yet even though there's been a couple of frosts.

[Bobdn]

My house is similar to an old garden shed. Was freezing this morning. Can't complain.

[xafalcon]

My monster Rinnai gas heater is doing the business at the moment. I'm doing my best to take pressure off the electricity market which appears to be out of control just now.

Burning barrels of oil(edit: diesel) at Whirinaki is expensive!

Burning diesel again today. That's going to hurt the hip pocket

And is a great illustration of the need for thermal to back up renewables. And the more renewables, the more back up that is needed. But I doubt any new thermal plants would get resource consent

Also shows the folly of cancelling Lake Onslow, which would have been the perfect back up for renewables (in 10 years when Huntly rankines are retired)

[percy]

https://www.rnz.co.nz/news/business/517357/genesis-energy-and-spark-partner-up-on-renewable-energy

[Toddy]

Anyone heard anything on how the Kupe KS 9 results are going?

[Snoopy]

Anyone heard anything on how the Kupe KS 9 results are going?


Letter to the editor from 'Steven Nichols' an 'Engineer working in the energy sector" in the May 16th 2024 issue of the Christchurch Star

------------------

New offshore gas exploration is unnecessary creating complex issues and serious financial risks for New Zealand.

Onshore gas exploration is not currently banned and there is no domestic need for new offshore supplies. Modelling commissioned by MBIE for the Gas Transition Plan has shown that we can meet current gas demand for residential commercial and industrial purposes from onshore supplies and investment. Offshore gas supplies have traditionally been underpinned by larger petrochemical users such as Methanex and cost more to develop than onshore supplies.

Reopening offshore oil and gas exploration is inconsistent with our Paris Agreement targets and our free trade agreement with the EU (which require us to meet our Paris targets). Failure to meet both has serious financial implications for New Zealand in the form of penalties and purchasing offshore carbon credits. Pursuing new offshore gas exploration will cost New Zealanders more money in the long run and make it harder to meet our decarbonisation targets.

The near grid emergency on the morning of May 9th was less about gas supplies and more about an early cold snap, combined with 700MW of generation undergoing scheduled maintenance. It was an issue of capacity, not shortage of energy.

-------------------------------------

SNOOPY

[Toddy]

KS 9 has already been drilled. They were working on how to get the best flow rates out of it.

NZO has publicly stated that is makes more sense to spend shareholders money in Australian onshore wells and 'shipping' it to NZ for a better return.

The Kupe Drills had been committed to years ago to try and extend the life of Kupe. This is still GNEs baby and they need to make the most of it, for shareholders and NZ.

[Bobdn]

Its good having someone like Shane Jones in Parliament. He seems to have a good handle on things and seems to appreciate the importance of Genesis in our energy mix.

https://youtu.be/O2D2zb8FjL8?si=e5krUbITl7D4NzYj

PS not a NZ First voter but like a pragmatic approach.

[blackcap]

Burning diesel again today. That's going to hurt the hip pocket

And is a great illustration of the need for thermal to back up renewables. And the more renewables, the more back up that is needed. But I doubt any new thermal plants would get resource consent

Also shows the folly of cancelling Lake Onslow, which would have been the perfect back up for renewables (in 10 years when Huntly rankines are retired)

That is the biggest problem with renewables. Especially solar and wind. They are unreliable and intermittent. For every bit of solar and wind you have, you need backup. This is all extra and creates more costs, especially unneeded capital costs. I think wind and solar (at grid level) should be banned.

Well banned is probably strongly worded, but should not be promoted to the extent that it is or subsidised that it is.

[mwri]

Letter to the editor from 'Steven Nichols' an 'Engineer working in the energy sector" in the May 16th 2024 issue of the Christchurch Star

------------------

New offshore gas exploration is unnecessary creating complex issues and serious financial risks for New Zealand.

Onshore gas exploration is not currently banned and there is no domestic need for new offshore supplies. Modelling commissioned by MBIE for the Gas Transition Plan has shown that we can meet current gas demand for residential commercial and industrial purposes from onshore supplies and investment. Offshore gas supplies have traditionally been underpinned by larger petrochemical users such as Methanex and cost more to develop than onshore supplies.

Reopening offshore oil and gas exploration is inconsistent with our Paris Agreement targets and our free trade agreement with the EU (which require us to meet our Paris targets). Failure to meet both has serious financial implications for New Zealand in the form of penalties and purchasing offshore carbon credits. Pursuing new offshore gas exploration will cost New Zealanders more money in the long run and make it harder to meet our decarbonisation targets.

The near grid emergency on the morning of May 9th was less about gas supplies and more about an early cold snap, combined with 700MW of generation undergoing scheduled maintenance. It was an issue of capacity, not shortage of energy.

-------------------------------------

SNOOPY

Thank you snoopy 🙏 lot of misinformation going on about the grid emergency

[Bobdn]

Would be great for Genesis to bring back that fourth Rankine unit

NZ needs it.

[blackcap]

Thank you snoopy �� lot of misinformation going on about the grid emergency

Shows how stupid signing that FTA with the EU was. We really need to get back to off shore gas exploration pronto before it is too late. FTA with the EU be dammned.

[Toddy]

KS 9 officially a duster. This is really concerning news for a number of reasons. Micro and Macro.

Bad news for the shareholders, NZ gas customers and any momentum that Shane Jones was trying to muster up for investment in the NZ Oil and Gas Industry.

[Toddy]

And NZO has just announced that it is leaving the NZX.

[bobestm]

I am new here.
Noting that the share price is in decline, what is the state of affairs for Genesis.
- KS-9 not as successful as hoped
- Huntly mothballed ?

Have I got anything wrong? Or missing something?

[Waikaka]

Letter to the editor from 'Steven Nichols' an 'Engineer working in the energy sector" in the May 16th 2024 issue of the Christchurch Star

------------------

New offshore gas exploration is unnecessary creating complex issues and serious financial risks for New Zealand.

Onshore gas exploration is not currently banned and there is no domestic need for new offshore supplies. Modelling commissioned by MBIE for the Gas Transition Plan has shown that we can meet current gas demand for residential commercial and industrial purposes from onshore supplies and investment. Offshore gas supplies have traditionally been underpinned by larger petrochemical users such as Methanex and cost more to develop than onshore supplies.

Reopening offshore oil and gas exploration is inconsistent with our Paris Agreement targets and our free trade agreement with the EU (which require us to meet our Paris targets). Failure to meet both has serious financial implications for New Zealand in the form of penalties and purchasing offshore carbon credits. Pursuing new offshore gas exploration will cost New Zealanders more money in the long run and make it harder to meet our decarbonisation targets.

The near grid emergency on the morning of May 9th was less about gas supplies and more about an early cold snap, combined with 700MW of generation undergoing scheduled maintenance. It was an issue of capacity, not shortage of energy.

-------------------------------------

SNOOPY

I will stick my oar in on this one. Historically in NZ, any large gas discovery be it onshore (Kapuni) or offshore (i.e. Maui) has needed large buyers of the natural gas before they can be developed. Traditionally so they can boost associated condensate production but also because the processing plants have to produce the gas, then there is an obvious need to have someone who can swing demand so that gas is not burned and wasted. Methanex is a critical part of this ecosystem by being able to start and mothball methanol trains to match demand to supply. With out these kinds of large customers no one can invest properly in onshore as they are going to be left with unsaleable gas and fields that cant swing up or down to meet demand. Ahuroa was to partially deal with this but then it got broken by the energy traders swinging too hard on the cushion until they had water breakthrough and lost most of their storage space.

Seems to me KS-9 is completely turned off and watered out. So that is $65 million dollars shredded and Kupe will need decommissioning sooner than expected. The gas left in Kupe will be worth more as a lot of demand is inflexible but I suspect it is going to be an untidy end to NZ domestic gas production.

I looked up Steven Nichols on LinkedIn and he had put this on his profile description:
"Experienced Energy Engineer with a passion for energy efficiency and decarbonisation. Enjoys thinking outside the box and considering the wider impacts of engineering design on the environment and people. Skilled at process analysis and energy auditing of industrial and commercial facilities. Strong experience partnering with food and beverage facilities, ranging from dairy factories to distilleries, to achieve their sustainability and energy efficiency goals."

People can read his self written blurb and form their own opinions on if he might have a 'decarbonisation' tinted glasses when thinking about the gas market.

[Snoopy]

I am new here.
Noting that the share price is in decline, what is the state of affairs for Genesis.
- KS-9 not as successful as hoped
- Huntly mothballed ?

Have I got anything wrong? Or missing something?


bobestm, if you want to find out about key events in a company's history that may be affecting the share price, the best thing to do is do a search for:

(company) investor relations

where (company) represents the name of the company of your interest. So in this case (company) = 'genesis energy'. The result of such a search leads me here:
https://www.genesisenergy.co.nz/investor

Click the tab that says 'results and reports' and the drop down menu leads you to a 'market announcements' option. You will then be able to access all of the NZX announcements which are dated and in chronological order. Generally you would look for information released to the market at the latest half yearly reporting date. If you want investor reaction to any market announcement, you simply go back through the pages of this 'Sharetrader' thread to that date (you will note that all posts have a date on them) , and see what members of the 'Sharetrader'; community said about the announcement at the time. Of course it is not always only the half year announcements that matter. The most recent NZX release dated 22nd May 2024 titled 'Kupe Production Update' might have something to do with the more recent share price fall?

SNOOPY

[Sideshow Bob]

https://www.nzx.com/announcements/433539

Genesis Energy advises that FY25 EBITDAF is expected to be around $460m subject to hydrological conditions, gas availability, plant availability and any material adverse events or unforeseeable circumstances.


Daily gas production at Kupe is expected to be between 37-47 TJ/day as a result of the KS-9 outcome and general field decline. The lower gas is expected to result in higher generation costs due to increased use of higher-cost solid fuel.

“The current gas market conditions are driving a challenging short-term outlook for the country; less gas means more solid fuel and higher generation costs for Genesis. The Company remains focused on executing our long-term strategy to accelerate development of new renewable generation and battery storage, reposition Huntly into a grid-scale peaking and firming facility and displace coal with biomass,” said Chief Executive Malcolm Johns.

Previously announced organisational changes have progressed as planned and FY25 operating expenditure is in line with expectations. FY25 capital expenditure is expected to be around $180m. This includes approximately $80m growth spend relating to a grid scale battery at Huntly Power Station, with final investment decision expected mid CY-2024.

FY24 guidance remains unchanged.

Kupe Reserves

Genesis Energy is in the process of independently verifying Kupe Oil and Gas Field reserves. Current expectations are that field-wide proved and probable reserves (‘2P’) will be revised down by approximately 80 Peta joule equivalents (‘PJe’) . The final reserves position will be released with Genesis’ FY24 full year results on 22 August 2024.

[winner69]

Bob, that’s first earnings downgrade for F25 …. Ebitdaf previous $500m now down to $460m

At least $460m is higher than the $450m guidance for F24 so thats good

Still expect reduced divie sometime and share price <$2

[fish]

Bob, that’s first earnings downgrade for F25 …. Ebitdaf previous $500m now down to $460m

At least $460m is higher than the $450m guidance for F24 so thats good

Still expect reduced divie sometime and share price <$2


Why did you post expectation of sp fall and reduced dividend ?

[workingdad]

Isn’t GNE poised to benefit from low hydro levels?

[X-men]

So..if this coming summer really hot...no rain ...lakes are low ...GNE will thrive?

[fish]

So..if this coming summer really hot...no rain ...lakes are low ...GNE will thrive?

Happening now as far as I can see
Wits quotes wholesale price at 600 mwh
Production cost 50
Rankins producing an extra 600 mwh\
So around 330000 per hour atm
I must have got something wrong

[xafalcon]

Happening now as far as I can see
Wits quotes wholesale price at 600 mwh
Production cost 50
Rankins producing an extra 600 mwh\
So around 330000 per hour atm
I must have got something wrong

Typical WITS is $300/MWh - refer transpower weekly report
Rankine cost of production is $113/MWh (Q4 report)
Rankines producing 600MW ish at the moment
$112,200/hr in theory

But they aren't selling all generation into wholesale market. They may have some swaptions left, they will have some PPA's, and their own customers (GNE has 2nd largest customer base) will be contracted at lower prices

The WITS price is driven to $300/MWh by winter demand and lowish hydro storage, then spikes up when wind is low (<300MW ish)

MEL has pulled all their load reduction levers with Tewai Point to reduce demand and preserve Lake levels until snow melt

CEN has been running geothermal at full tilt for months

Another big stationary high pressure over north island could prove challenging during the morning and evening peaks, and would extend high wholesale prices further into spring

GNE makes good money when these conditions combine

And they need to - they just wasted $75M on their KS9 drilling program

[workingdad]

Not uncommon for drilling work overs to be sub optimal but yeah, that one wasn’t ideal…..

[fish]

Typical WITS is $300/MWh - refer transpower weekly report
Rankine cost of production is $113/MWh (Q4 report)
Rankines producing 600MW ish at the moment
$112,200/hr in theory

But they aren't selling all generation into wholesale market. They may have some swaptions left, they will have some PPA's, and their own customers (GNE has 2nd largest customer base) will be contracted at lower prices

The WITS price is driven to $300/MWh by winter demand and lowish hydro storage, then spikes up when wind is low (<300MW ish)

MEL has pulled all their load reduction levers with Tewai Point to reduce demand and preserve Lake levels until snow melt

CEN has been running geothermal at full tilt for months

Another big stationary high pressure over north island could prove challenging during the morning and evening peaks, and would extend high wholesale prices further into spring

GNE makes good money when these conditions combine

And they need to - they just wasted $75M on their KS9 drilling program

Thank you for putting current rankine generation into perspective .
Still could be making an extra 2 million a day for genesis this winter.
Furthermore the cost of generation must fall as more units are produced.
I have felt that that the market does not appreciate the current value of this thermal backup .
The cost of maintaining them,fuel storage etc looks as if it might be shared more evenly with the current negotiations on Huntly firming options-and they will have to be paid to genesis in Jan 2025 and then annual

[workingdad]

https://www.nzherald.co.nz/business/tight-gas-supply-low-nz-lake-levels-drive-up-wholesale-power-prices/NQFKGXL42JAPLG56M5QD3O7MVQ/#:~:text=Tightening%20gas%20supply%2C%20low%20lake ,reliance%20on%20thermal%20generation%20assets.