Malcolm Johns: Genesis Energy CEO on the Huntly deal and the Govt widening the scope of the $200m co-investment fund

Our largest electricity gentailer is welcoming two major announcements for the energy sector. 

The Government's announced it’s widening the scope of its $200 million co-investment fund to support a broader range of projects. 

And the Commerce Commission has given final approval for the big electricity gentailers to build a coal stockpile at Genesis' Huntly Power Station. 

Genesis Chief Executive Malcolm Johns told Mike Hosking the generation units at Huntly will no longer be retired. 

He says they give New Zealand another 10 years to solve the long-term energy security issue. 

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Episode Transcript

Speaker 1 (00:00):
So more moves on the energy front. This morning from
the government. We've got rule changes coming around the two
hundred million dollar exploration fund. There will be additional drilling
and existing fields and upgrades to production facilities. Malcolm John's
as Genesis chief executive and as with us, Malcolm morning,
good morning, how are you. I'm very well, Thank you.
The two hundred million dollars this of the government with
the skin and the game thing. Have we got reputational
problems here? Hence the change. In other words, the international

(00:22):
community didn't come a running the way we thought or
hoped they would.

Speaker 2 (00:26):
Look. I think we're managing a challenging gas situation. It
will be for some years to come, and the expansion
of the application of the two hundred million, particularly into
gas storage areas, I think is a major step forward
for us being able to do that.

Speaker 1 (00:39):
Will it work?

Speaker 2 (00:41):
I think so? Yes, absolutely so.

Speaker 1 (00:43):
The more how confident are you on the more This
is the labor line. Even if you go looking, you're
not finding anything. If we look, will we find.

Speaker 2 (00:52):
I'm not a geologist, so I can answer that. What
I can say is that based on what we know
in terms of even and possible reserves, that have been identified.
More drilling in existing fields and investment into more gas
flexibility is going to be a very powerful tool to
push the economy as we manage this.

Speaker 1 (01:12):
Right the skin and the game thing from the government.
Does that make sense? Do you like it?

Speaker 2 (01:17):
Look, I'm a free market person, but I think we're
at a point in terms of the upstream sector in
particular where the government leaning in is a critical element
of getting things happening.

Speaker 1 (01:27):
Okay, answer me this definitively. Megan Woods will tell you
that even in all the looking, you never found gas anyway,
So you're wasting your time, true or not?

Speaker 2 (01:37):
Well it certainly you know in terms of the wells
have been drilled over the last five to seven years,
they haven't been that successful. But the wells we're talking
about drilling here are in existing fields where we know
there is gas. So it's about accelerating the supply of
existing fields, and with gas flexibility around gas storage in particular,
then we can smooth out those gas reserves for long.

Speaker 1 (02:00):
Go Okay, on the ComCom and their decision yesterday on
the coal were they going to do and what was
the point of that exercise? I mean, what are they
going to do? Say no, you can't do it.

Speaker 2 (02:11):
Well, they could have done, but I think obviously we
welcome the decision that they've made because it does mean
that the very large generation units a hunt me that
we're going into retirement are now going to be around
for another decade and so in a sense that gives
New Zealand another ten years to solve the long term
energy security issue around low rainfall and low wind periods.

Speaker 1 (02:33):
Right, how fragile are we as a country because my
current fascination is your data AI thing and all the
power that that sucks up? Are we going to be
your data center?

Speaker 2 (02:42):
You know?

Speaker 1 (02:42):
Seriously? Are we a enterprise the sort of power to
do that.

Speaker 2 (02:46):
There's three different types of data centers. There is just
a pure data center that's like adding light bulbs to
the grid. There's a data center with compute that's like
adding houses to the grid. Then there's a data center
with AI and that's like adding hounds to the grid.
So it really depends on the data strategy that the
data center operators pursue for New Zealand, and whether we

(03:06):
have compute and AI centers here will determine how much
impact there is on the demand for electricity and New Zealand.

Speaker 1 (03:13):
What an excellent explanation. I'll like you sty well done,
have a good week in Malcolm John's Genesis, Chief Executive
would us this morning

Speaker 2 (03:19):
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