GNE - Genesis Energy

[xafalcon]

Problem is the design of our electricity market. Companies are not rewarded for providing enough electricity plus a safety buffer, but they are much better paid if there is not enough electricity around.

Any little hiccup and the price shoots to the stars. Follow the money ;

Not sure, which ideological blindsided idiot government created this system. Anybody knows?

Max Bradford (National) is the (ir)responsible minister who implemented the system. Ironically, the power companies warned him at the time that prices would rise as a result, but Max refuted this would happen

And here we are

[Plata]

The problem with the current market is that the amount of generation available is dictated by supply and demand between the generators, retailers and their customers. It is inefficient for an operator like GNE to have all of it's capacity available 24/7 on the off chance a fault occurs and prices spike, IE there is not much incentive for generators to ensure security of supply. Expecting them to do otherwise is a bit naïve, if you were going hiking for 3 days would you pack 9 days worth of food and water? No, you wouldn't.

There is seemingly not much appetite to pay for security of supply. I wonder, is it cheaper for the government to build Onslow or support GNE and CEN to keep thermal capacity on reserve. The interest on the debt to build onslow alone would be in the hundreds of millions yearly, certainly enough to keep a few Rankine units on standby AND pay for the biofuel stockpile if they want to minimize co2.

[Raven]

There is seemingly not much appetite to pay for security of supply. I wonder, is it cheaper for the government to build Onslow or support GNE and CEN to keep thermal capacity on reserve. The interest on the debt to build onslow alone would be in the hundreds of millions yearly, certainly enough to keep a few Rankine units on standby AND pay for the biofuel stockpile if they want to minimize co2.

Thats a very interesting question. One would like to think it has (or will be) addressed in the many studies and assessments done on Onslow and The NZ Battery Project.

[Basil]

Outgoing CEO Marc England opines on the future of Huntly and other things - paywalled
https://www.nzherald.co.nz/business/business-hub-departing-genesis-ceo-marc-england-on-huntly-biomass-and-the-rolling-maul/7HPHZFAZ3VDZDMTJDNMUX7FAR4/

[xafalcon]

There is seemingly not much appetite to pay for security of supply. I wonder, is it cheaper for the government to build Onslow or support GNE and CEN to keep thermal capacity on reserve. The interest on the debt to build onslow alone would be in the hundreds of millions yearly, certainly enough to keep a few Rankine units on standby AND pay for the biofuel stockpile if they want to minimize co2.

I believe Lake Onslow will go ahead and GNE will be paid to keep Huntly up and running until Lake Onslow is fully commissioned and running. Payment may take the form of government buying Huntly and closing it down. The carbon credits may be part of the deal, or may not be

[Plata]

https://www.stuff.co.nz/business/130143733/electricity-market-isnt-perfect-but-few-markets-are-says-power-regulator

Seems like good news, no new regulation in the near term? Just need Onslow to get the no go

[Shareguy]

Nice upgrade

https://www.nzx.com/announcements/400532

[winner (n)]

Nice upgrade

https://www.nzx.com/announcements/400532

Does it lead to a higher dividend ....or will they be as stingy as ever

[winner (n)]

Nice upgrade

https://www.nzx.com/announcements/400532

Indeed - the 50% decline in carbon emissions is good news

[Shareguy]

National party say they don't support Onslow. That it does not stack up.

Guess that's the end of that then.

[Shareguy]

I wonder what Craigs think of the latest upgrade given they have 2023 forecast at $443m and $3.70 target price with outperform rating.

[Basil]

Good news...but what drives this puppy going forward, increased earnings or higher bond rates ?
Looks like a giant tug of war between these two factors to me.  I guess if one plays possum at least they avoid getting whipsawed by this crazy market and paying too much brokerage trying to chase it.

[winner (n)]

Guru analysts at Craigs say relationship with 10 year govt is broken so lets concentrate on earnings

I have no idea if this ebidaf thing and subsequent multiples mean anything but heck plenty of upside if you look at how it trends v share price

GNE profits flat for years but taking off this and next year

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[xafalcon]

National party say they don't support Onslow. That it does not stack up.

Guess that's the end of that then.

It's easy to oppose something when not in power. But with no other viable decarbonisation options at lower price points, there isn't much choice.

[Basil]

Guru analysts at Craigs say relationship with 10 year govt is broken so lets concentrate on earnings

I have no idea if this ebidaf thing and subsequent multiples mean anything but heck plenty of upside if you look at how it trends v share price

GNE profits flat for years but taking off this and next year

You cannot view this attachment.

Nice chart mate thanks for posting.  If we get down to $2.40 again I won't make the same mistake twice, (looking a gift horse in the mouth).