August 4, 2025 • 11 mins
Big players in the energy space are putting forward a new 10-year deal they say will secure supply at Huntly Power Station.
Genesis, Mercury, Meridian and Contact have agreed to co-invest in a strategic energy reserve – pending Commerce Commission approval.
It includes adding up to 600-thousand tonnes of coal to current stocks.
Meridian Energy CEO Mike Roan told Kerre Woodham that although some may find it surprising, it’s more cost effective to import coal than it is to mine it in New Zealand.
He says the Huntly deal will give them 10 years of confidence in thermal fuel that they can use to continue investing in renewable generation.
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Episode Transcript
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Speaker 1 (00:06):
You're listening to the Kerry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be the big players in New Zealand energy, as
we were saying and putting forward a new ten year
deal they say will secure supply at Hunty power station. Genesis, Mercury,
Meridian and Contact have greed to co invest in a
strategic energy reserve, which will add six hundred thousand tons
of cold current stocks, making a total of potentially one
(00:31):
point one million tons. The agreement was prompted by twenty
twenty four's electricity supply crunch. Meridian Energy chief executive Mike
Groan joins me, Now, good morning to you.
Speaker 3 (00:43):
Hey, good morning, Carrie. How are you spiling?
Speaker 2 (00:45):
Good? Thank you so much for making time to talk.
Why don't we just thanks for me, Why don't we
just mine our own coal and use that?
Speaker 3 (00:55):
So I think the coal that we have within the
country is of a different grade. So I think it's
a pure grade to the coal that you would dig
up and put in through the hunting units, and so
I think it's more cost effective and efficient, even though
it sounds surprising to buy the coal from offshore and
(01:17):
bring it into the country.
Speaker 2 (01:19):
That's what I was saying to our texters and callers
who were saying, look, Huntley was built on a coal
mine with coal that that can be used to power it.
But I said, we're in a global economy in these days,
it's probably more expensive to do anything in New Zealand
rather than import it.
Speaker 3 (01:37):
Yeah, I think there's a lot of coal offshore that
is the right quality. So you know, the availability of
that coal is you know what makes it cost effective.
And you know I picked up there the intro and
you know it all stems from, as you pointed out,
the loss of gas that we relied on as a
(02:00):
fuel for the electricity set the last August that it's
caused any number of challenges for you know, for the
electricity sector, it's caused a lot of issues for people
who use gas directly as well. So it's not just
an electricity sector thing. But you know, our job is
to effectively find solutions to challenges when they arise like that.
(02:22):
And you know, the last thing we want is for
someone to think they need to take a cold shower
or for the electricity not to be available to them.
So you know that's what this represents is we've we've
lost gas as a fuel. We need to replace that
with another fuel, and in this case we need thermal fuels.
(02:43):
And so the country doesn't have gas, we've moved a coal.
Speaker 2 (02:50):
You remind me a bit of the CEO of the
new CEO of kung Or Order. He said, essentially, our
job is quite simple. We build houses for people and
we rent them out to people who need them. And
essentially your job is quite simple. You know, you generate
electricity and you supply it to people who need it.
But he said his the role of Kang Order got
(03:11):
confused when it with the ideology behind the previous administration
saw them moving into housing developments and becoming going beyond
their brief. So your job is essentially quite simple. And
if you reduce it right down, how much of the
role is complicated by political demands ideological demands?
Speaker 3 (03:32):
Now, I mean I agree with you. I think the
role is really simple. You know, make affordable electricity and
make sure it's cure so that people can run their
businesses and lives and the way that they see fit.
You know, that's the that's the basic job. And because
we're involved in building assets that last twenty years, is
you're naturally going to get changes in ideology along the way,
(03:56):
but we need to have confidence in the platforms that
we use to invest over those long periods. So I
think we just get used to the fact that things
are always changing outside of our sector as part of
our business, and we've got to maintain the confidence that
we're the ones who have the information to try and
(04:17):
help manage both security and energy affordability. And you know,
in this case, you know that loss of gas effect
of both, and so you know, we've been working really
hard to identify what the solutions might be and the
(04:38):
strategic in you reserve the Huntley deal as part of that.
It gives us ten years of confidence and thermal fuel
and we can use that confidence to continue and invest
in renewable generation, which you know we're we are such
a lucky country. You know we talk about os being
a lucky country. Well, we've got a boundary of renewable resources,
(05:02):
and you know, we have listed the amount of renewable
generation that we make in the country from eighties to
just under ninety percent over the last ten years. And
we can go further, but we do need a bit
of thermal back up. When it doesn't rain or even
the wind doesn't blow so yeah, and it.
Speaker 2 (05:23):
Also takes time, doesn't it to build renewables on a
scale that we require them. You can't just put them
up overnight.
Speaker 3 (05:32):
Yeah, agreed. You know, it's the frustrating thing is when
you run into problems like last year, you wish that
you could put infrastructure in the ground really really quickly
to overcome the problem. But the reality is that they
take long time to build. Like a motorway, it takes
a long time to do unfortunately. But we're onto that
(05:55):
as well, you know. So first step is try and
do things that will help secure the electricity system, which
is this transaction and there are other elements that help
provide that security. And now that we've got that confidence
in security is invest the heck out of you know,
(06:18):
the renewable bounty that we do have. So everyone's focused on,
you know, developing renewable assets and constructing them as fast
as we can. But that'll it'll be about twenty eight eight,
sorry that they will start come online. That's just taken.
Speaker 2 (06:38):
So with the reintroduction of gas exploration licenses and the
drill Baby drill mentality from Shane Jones, can we look
forward to a time when gas is back on as
a as an energy resource.
Speaker 3 (06:56):
I you know, never foresee the future entirely accurate, Carey,
but I think we will struggle. Okay, I do. And
you know this, this this arrangement that we've entered into
with Genesis and the other large generation businesses, it is
a view that you know, we need a reliable fuel
(07:18):
supply to give us that energy security or the electricity
security that people deserve. And so you know, we're saying
we need to reinvest in the infrastructure that supports you know,
thermal fuels or coal as opposed to gas, given what
(07:39):
we saw last year. Now, I'd love to be wrong,
because if I'm wrong, then we'll have more bountiful supplies
of gas, we'll have a coal stop pile, and that'll
mean that electricity prices will come down.
Speaker 2 (07:54):
Yeah, because that's the thing. That's all very well, supplying electricity,
but people have to be able to afford it. I
also have a question from Sally. Can you ask the
man from already and if they're going to continue to
require solar from the public, if they have any good
incentives for solar from the public for the future.
Speaker 3 (08:11):
Well, I like to think our incentives for you know,
anyone who wants to put solar panels on their roof,
or if you're a business and you know you've got
roof space and able to put solar panels on your roof.
I like to think the incentives that we offer are
pretty decent. As we buy back you know, solar energy
(08:31):
from people at seventeen cents a units, and you know,
it really does work for some people. And we've got
teams you know, that are out there helping people invest
in solar panels rooftop for businesses, for homes, and then
you know, at a utility scale as well. So hopefully
(08:56):
the incentives that we offer are getting people up there
and thinking about that as an option.
Speaker 2 (09:02):
And looking aheer to Mike, can you see like other
since we've got these issues right now because there hasn't
been a continuity of planning, There hasn't been a slow,
steady on streaming of alternative energy supplies as the world changes.
It's been very stop start. Can you is that the
reason why we're in the position we're in? And can
(09:23):
you see a time where we're just going to be
regenerating power generators into the future.
Speaker 3 (09:31):
Now? I feel so optimistic about the future carry. I
really do, and it's hard to see, you like, it
is always hard to see when things aren't going that well.
But I think it's really unfortunate for the country that
we had this unexpected issue with gas supply and that's
(09:52):
put a spanner in the works. It's maybe not the
best way to frame it, but we were developing our
generation asset base to become more renewable over time. I
said earlier. You know, we're the envy of the world
in terms of our renewable bounty, and that's still going on.
It's been accelerated, if anything, and so you know, you
(10:15):
jump forward a couple of years and I feel really
good we will have a secure energy system, you know,
driven partly by the decision around the Strategic Energy Reserve
that we've just completed, but also as a result of
all the investment that's going and not just from my business,
but from new competitors joining our market. And you know,
(10:40):
there are at least three new competitors who have joined
the market over the last couple of years that are
investing alongside us to bring that future about, which is
affordable energy prices that people can rely on. And so
I think it's I think we've just been incredibly unfortunate
(11:01):
that the gas supplies we're not as if alls we
thought they were, and our job is not to dwell
on that. Our job is to find solutions that will
move us towards that position that I mentioned and that
I'm really optimistic.
Speaker 2 (11:20):
You sound it. Thank you very much for your time,
my grown Meridian chief Executive.
Speaker 1 (11:25):
For more from carry Wood and Mornings, listen live to
News Talks at B from nine am weekdays, or follow
the podcast on iHeartRadio
You're listening to the Kerry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be the big players in New Zealand energy, as
we were saying and putting forward a new ten year
deal they say will secure supply at Hunty power station. Genesis, Mercury,
Meridian and Contact have greed to co invest in a
strategic energy reserve, which will add six hundred thousand tons
of cold current stocks, making a total of potentially one
(00:31):
point one million tons. The agreement was prompted by twenty
twenty four's electricity supply crunch. Meridian Energy chief executive Mike
Groan joins me, Now, good morning to you.
Speaker 3 (00:43):
Hey, good morning, Carrie. How are you spiling?
Speaker 2 (00:45):
Good? Thank you so much for making time to talk.
Why don't we just thanks for me, Why don't we
just mine our own coal and use that?
Speaker 3 (00:55):
So I think the coal that we have within the
country is of a different grade. So I think it's
a pure grade to the coal that you would dig
up and put in through the hunting units, and so
I think it's more cost effective and efficient, even though
it sounds surprising to buy the coal from offshore and
(01:17):
bring it into the country.
Speaker 2 (01:19):
That's what I was saying to our texters and callers
who were saying, look, Huntley was built on a coal
mine with coal that that can be used to power it.
But I said, we're in a global economy in these days,
it's probably more expensive to do anything in New Zealand
rather than import it.
Speaker 3 (01:37):
Yeah, I think there's a lot of coal offshore that
is the right quality. So you know, the availability of
that coal is you know what makes it cost effective.
And you know I picked up there the intro and
you know it all stems from, as you pointed out,
the loss of gas that we relied on as a
(02:00):
fuel for the electricity set the last August that it's
caused any number of challenges for you know, for the
electricity sector, it's caused a lot of issues for people
who use gas directly as well. So it's not just
an electricity sector thing. But you know, our job is
to effectively find solutions to challenges when they arise like that.
(02:22):
And you know, the last thing we want is for
someone to think they need to take a cold shower
or for the electricity not to be available to them.
So you know that's what this represents is we've we've
lost gas as a fuel. We need to replace that
with another fuel, and in this case we need thermal fuels.
(02:43):
And so the country doesn't have gas, we've moved a coal.
Speaker 2 (02:50):
You remind me a bit of the CEO of the
new CEO of kung Or Order. He said, essentially, our
job is quite simple. We build houses for people and
we rent them out to people who need them. And
essentially your job is quite simple. You know, you generate
electricity and you supply it to people who need it.
But he said his the role of Kang Order got
(03:11):
confused when it with the ideology behind the previous administration
saw them moving into housing developments and becoming going beyond
their brief. So your job is essentially quite simple. And
if you reduce it right down, how much of the
role is complicated by political demands ideological demands?
Speaker 3 (03:32):
Now, I mean I agree with you. I think the
role is really simple. You know, make affordable electricity and
make sure it's cure so that people can run their
businesses and lives and the way that they see fit.
You know, that's the that's the basic job. And because
we're involved in building assets that last twenty years, is
you're naturally going to get changes in ideology along the way,
(03:56):
but we need to have confidence in the platforms that
we use to invest over those long periods. So I
think we just get used to the fact that things
are always changing outside of our sector as part of
our business, and we've got to maintain the confidence that
we're the ones who have the information to try and
(04:17):
help manage both security and energy affordability. And you know,
in this case, you know that loss of gas effect
of both, and so you know, we've been working really
hard to identify what the solutions might be and the
(04:38):
strategic in you reserve the Huntley deal as part of that.
It gives us ten years of confidence and thermal fuel
and we can use that confidence to continue and invest
in renewable generation, which you know we're we are such
a lucky country. You know we talk about os being
a lucky country. Well, we've got a boundary of renewable resources,
(05:02):
and you know, we have listed the amount of renewable
generation that we make in the country from eighties to
just under ninety percent over the last ten years. And
we can go further, but we do need a bit
of thermal back up. When it doesn't rain or even
the wind doesn't blow so yeah, and it.
Speaker 2 (05:23):
Also takes time, doesn't it to build renewables on a
scale that we require them. You can't just put them
up overnight.
Speaker 3 (05:32):
Yeah, agreed. You know, it's the frustrating thing is when
you run into problems like last year, you wish that
you could put infrastructure in the ground really really quickly
to overcome the problem. But the reality is that they
take long time to build. Like a motorway, it takes
a long time to do unfortunately. But we're onto that
(05:55):
as well, you know. So first step is try and
do things that will help secure the electricity system, which
is this transaction and there are other elements that help
provide that security. And now that we've got that confidence
in security is invest the heck out of you know,
(06:18):
the renewable bounty that we do have. So everyone's focused on,
you know, developing renewable assets and constructing them as fast
as we can. But that'll it'll be about twenty eight eight,
sorry that they will start come online. That's just taken.
Speaker 2 (06:38):
So with the reintroduction of gas exploration licenses and the
drill Baby drill mentality from Shane Jones, can we look
forward to a time when gas is back on as
a as an energy resource.
Speaker 3 (06:56):
I you know, never foresee the future entirely accurate, Carey,
but I think we will struggle. Okay, I do. And
you know this, this this arrangement that we've entered into
with Genesis and the other large generation businesses, it is
a view that you know, we need a reliable fuel
(07:18):
supply to give us that energy security or the electricity
security that people deserve. And so you know, we're saying
we need to reinvest in the infrastructure that supports you know,
thermal fuels or coal as opposed to gas, given what
(07:39):
we saw last year. Now, I'd love to be wrong,
because if I'm wrong, then we'll have more bountiful supplies
of gas, we'll have a coal stop pile, and that'll
mean that electricity prices will come down.
Speaker 2 (07:54):
Yeah, because that's the thing. That's all very well, supplying electricity,
but people have to be able to afford it. I
also have a question from Sally. Can you ask the
man from already and if they're going to continue to
require solar from the public, if they have any good
incentives for solar from the public for the future.
Speaker 3 (08:11):
Well, I like to think our incentives for you know,
anyone who wants to put solar panels on their roof,
or if you're a business and you know you've got
roof space and able to put solar panels on your roof.
I like to think the incentives that we offer are
pretty decent. As we buy back you know, solar energy
(08:31):
from people at seventeen cents a units, and you know,
it really does work for some people. And we've got
teams you know, that are out there helping people invest
in solar panels rooftop for businesses, for homes, and then
you know, at a utility scale as well. So hopefully
(08:56):
the incentives that we offer are getting people up there
and thinking about that as an option.
Speaker 2 (09:02):
And looking aheer to Mike, can you see like other
since we've got these issues right now because there hasn't
been a continuity of planning, There hasn't been a slow,
steady on streaming of alternative energy supplies as the world changes.
It's been very stop start. Can you is that the
reason why we're in the position we're in? And can
(09:23):
you see a time where we're just going to be
regenerating power generators into the future.
Speaker 3 (09:31):
Now? I feel so optimistic about the future carry. I
really do, and it's hard to see, you like, it
is always hard to see when things aren't going that well.
But I think it's really unfortunate for the country that
we had this unexpected issue with gas supply and that's
(09:52):
put a spanner in the works. It's maybe not the
best way to frame it, but we were developing our
generation asset base to become more renewable over time. I
said earlier. You know, we're the envy of the world
in terms of our renewable bounty, and that's still going on.
It's been accelerated, if anything, and so you know, you
(10:15):
jump forward a couple of years and I feel really
good we will have a secure energy system, you know,
driven partly by the decision around the Strategic Energy Reserve
that we've just completed, but also as a result of
all the investment that's going and not just from my business,
but from new competitors joining our market. And you know,
(10:40):
there are at least three new competitors who have joined
the market over the last couple of years that are
investing alongside us to bring that future about, which is
affordable energy prices that people can rely on. And so
I think it's I think we've just been incredibly unfortunate
(11:01):
that the gas supplies we're not as if alls we
thought they were, and our job is not to dwell
on that. Our job is to find solutions that will
move us towards that position that I mentioned and that
I'm really optimistic.
Speaker 2 (11:20):
You sound it. Thank you very much for your time,
my grown Meridian chief Executive.
Speaker 1 (11:25):
For more from carry Wood and Mornings, listen live to
News Talks at B from nine am weekdays, or follow
the podcast on iHeartRadio
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