GNE - Genesis Energy

[Basil]

Analyst reaction Jarden said it was a solid first half with a healthy upgrade. It set a target share price of $3.31 (shares were trading at $2.86 early Monday afternoon) and retained its 'overweight' rating. "Dam levels were 133% above average at the end of the half year, which bodes well for the start of 2H23E," it said.

"Key risks are regulation, less-than-optimal management of the exit of NZ Aluminium Smelters from New Zealand, an increasing carbon price outlook, and increased costs for thermal fuel."

I think Jarden do the most thorough research on the sector and GNE, certainly the most thorough I have read.  Certainly, that huge research note they did on 1 April that a good bloke shared with me was very insightful.    Happy holder and fully subscribed to the DRIP plan.

[Shareguy]

Craigs also have a very different opinion. Forbar also say big upside if Kupe divested.

Got to post the good and the bad. People can make up there own mind I guess.

[arekaywhy]

In what upsidedown world is there an "upside" if they divest from Kupe?

[Basil]

A world where analysts sitting behind a desk throw a bunch of highly speculative long term price guesses regarding the future value of oil, gas and LPG into their spreadsheet and more guesses on field decommissioning costs and its spits out a negative net present value answer.

GNE recently reviewed the whole Kupe thing and decided to keep it and I am pleased they did.
Beech energy as highly experienced operators on the Kupe field recently committed to a further drilling program at significant capex to extend the life of that field.  I would have thought they would have done a comprehensive field and case study analysis, (far deeper than a desktop one Forbar analysts have done) before committing to more development work costing tens of millions.

Happy holder of GNE for the yield.

[Plata]

Not to mention they didn't share the discount rate they were using to calculate NPV. Without that it seems more of a publicity piece than actually useful research.

[Shareguy]

https://www.newsroom.co.nz/lake-onslow-hydro-wont-be-ready-until-late-2037


The project has a 50 percent chance of being completed and commissioned by the end of 2037. While it would be operational at that stage, it will take another one to three years to fully fill the basin and reach the five terawatt hours of storage.

[BlackPeter]

https://www.newsroom.co.nz/lake-onslow-hydro-wont-be-ready-until-late-2037


The project has a 50 percent chance of being completed and commissioned by the end of 2037. While it would be operational at that stage, it will take another one to three years to fully fill the basin and reach the five terawatt hours of storage.

Rule of thumb for these projects is: multiply cost and timeframe with 2 and take the next larger unit of time - but obviously, only if everything goes to plan.

Wondering, by when hydrogen technology is up and running - I understand the EU plans to use that in large style before the end of this decade, which would be 2030 (they plan to import (and use) 10 M tonnes H2 by 2030, which would be equivalent to the energy storage of 66 Lake Onslaws).

But hey - NZ is often ways behind the ball, isn't it? Lets better wait another 10 years and put all our eggs into one single and expensive storage lake and wait for the "big one" to crush all of them. $15B (or make that $30B according to above rule) down the drain and then we will need some energy storage. This is clever.

[mcdongle]

Hydrogen seems to be the next go to energy, But it too has its problems if we start burning too much.

 "while hydrogen doesn't emit fossil gas when it burns, it does cause higher emissions of nitrogen oxides, a pollutant tied to the formation of smog and to negative health impacts. Utility regulators should think through the implications of increasing emissions of nitrogen oxides in disadvantaged communities, where many power plants are located, as part of utility proposals to convert power plants to run on hydrogen,

Elevated levels of nitrogen dioxide can cause damage to the human respiratory tract and increase a person's vulnerability to, and the severity of, respiratory infections and asthma. Long-term exposure to high levels of nitrogen dioxide can cause chronic lung disease."

I wonder if there is anything that we can use / burn that will not cause us problems in some way? If wind and solar are intermittent.

[Plata]

Sadly the nature of the beast is that pretty much anything we do has environmental impacts, some are just more problematic than others. I would wonder though, is a bit of NOX any worse than what burning diesel, petrol, coal or even gas puts out? I imagine it would be comparable to gas in terms of harm. If burning hydrogen on an industrial scale like at huntley, since the byproduct mixture is less complex (just water, air and nox more or less?) it could be easier or even economical to recover the nox from the waste gas.

[Basil]

At $10,000 per house for a basic solar system you could put a system on the roof of every house in N.Z. for about $25 Billion (assuming 2,5m homes in N.Z.), almost certain to be cheaper that the real cost of the Lake Onslow project.  National Solar could be up and running on every rooftop in a few years not sometime in the 2040's.  If the Govt gave interest free repayable loans spread over 10 years people could pay the Govt back with their power savings.

Not only does the Govt get the capital cost repaid to them over the next decade but this is actual new environmentally clean generation that works much of the time now, not back up generation in a dry year in the 2040's sometime. (Useless most of the time).

Chatted with a friend yesterday with his newly installed fancy Tesla Powerwall system.  Even on a really cloudy day it was making 1.3 kw's of power and powering everything in his home and pumping more than half a KW into the Tesla Powerwall battery for evening use.  Admittedly his fancy system cost him $27K including the expensive Tesla 13 kw/hr battery.

If I can come up with an idea like this in 5 minutes, why does this sort of common sense somehow escape the Muppets in power ?

I think Genesis are on the right track with solar.

[kiwi2007]

FY23 Q3 Performance Report
21/4/2023, 9:41 am MKTUPDTE
Favourable wholesale conditions continued in FY23 Q3 resulting in lower emissions and portfolio generation costs. Customer churn remained low, while netbacks increased across electricity, gas and LPG.

Malcolm Johns, Chief Executive said, "Genesis supported our customers through the Auckland floods and Cyclone Gabrielle. High hydro levels contributed to a 44% reduction in generation emissions, relative to the same period last year. During a busy quarter, we progressed key strategic initiatives, including a successful biomass trial and securing our first solar site."

Genesis' FY23 Q3 Performance Report is attached.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GNE/410273/393010.pdf

[Shareguy]

Great move Genesis.

https://www.stuff.co.nz/business/money/131445943/genesis-energy-forgives-debts-of-women-abused-by-partners

[Basil]

Surprising, (given the Government have no ownership in that company) move by the Govt subsidizing N.Z. Steel to the tune of $140m to help reduce carbon.
Wondering what the implications might be for Govt majority owned Genesis to replace their remaining Rankine units with Unit 5 type, or more modern gas powered and far more carbon friendly turbines or co-investment with Genesis in a wood pellet production facility to extend out the remaining Rankines lifespan to 2040 using environmentally friendly low emission wood pallets ? 

[Shareguy]

FB thinking GNE to enter the NZX20. Will be interesting

We pick that there will be no changes to the benchmark S&P/NZX 50 indices nor the S&P/NZX 10 index in the upcoming S&P/NZX June 2023 quarterly index review. However, we pick that Port Of Tauranga (POT) will be removed from the S&P/NZX 20 index due to failing liquidity requirements for that particular index, with Genesis Energy (GNE) the likely replacement. Official outcomes of the review will be announced close of market Friday, 2 June 2023, with an effective date close of market Friday, 16 June 2023.

[Shareguy]

Surprising, (given the Government have no ownership in that company) move by the Govt subsidizing N.Z. Steel to the tune of $140m to help reduce carbon.
Wondering what the implications might be for Govt majority owned Genesis to replace their remaining Rankine units with Unit 5 type, or more modern gas powered and far more carbon friendly turbines or co-investment with Genesis in a wood pellet production facility to extend out the remaining Rankines lifespan to 2040 using environmentally friendly low emission wood pallets ? 

Funny, thinking the same thing. Heard an interview with Hoskins this morning asking the same thing with green leader James Shaw re Genesis and Fontera basically saying are they next.  Shaw said that there is plenty of money left in the green fund and that negotiations were going on (would not confirm though with who)

My thoughts,If they can blow $130m on Bluscope to cut coal usage by half then would it not make sense for the government to fund a state of the art torrid pellet facility utilising slash.

Thought GNE might get back down to $2.60 again with bond yields increasing. Thursday will be interesting.  Then again going into NZX20 might well be the reverse.