GNE - Genesis Energy

[dubya]

Genesis powers up with new generator for remote Tuai Power Station

https://www.nzherald.co.nz/business/watch-genesis-powers-up-with-new-generator-for-remote-tuai-power-station/ZR66AO2K57Z7UNE4YOGWKRC44U/

Anyone got any more info on this? I don't subscribe to the N.Z. Herald.
Surprises me that there has not been an announcement on the NZX as this must be price sensitive. 

Genesis Energy has increased the amount of power it pumps into the national grid with the addition of a new Spanish-built generator for its Tuai Power Station, near Lake Waikaremoana.

The upgrade will boost the remote plant's electricity production by enough to power an extra 1000 homes. The first of three new GE built generators for Genesis' 60 megawatt Tuai Power Station was switched on last week after a 19,500 km journey from Bilbao in Spain — two months late due to global shipping delays.

The 26-tonne generator was then delivered by truck 560km from Auckland, finishing at the end of a narrow, winding road from Wairoa.

Up to 55 contractors and staff were involved in removing the old generator, originally installed in 1939, and replacing it with the 2022 model.

The nine-month project was undertaken through various levels of Covid-19 restrictions. Genesis will repeat the exercise next summer and the summer after that as Tuai's other two generators, built in 1929, are also replaced.

Once complete, the upgrade will have cost $32 million and taken seven years in planning, production and installation.

The project will increase Tuai's generation capacity by 6 megawatts and will improve its efficiency, the company said.

Genesis' chief operations officer Rebecca Larking said the project would increase the amount of sustainable generation available to the national grid.

"New Zealand is going to need more renewable electricity as the country moves to a lower-carbon future," Larking said.

[THESTG]

Thanks

[Plata]

At 90% capacity factor and 20 cents per kwh sale price that extra 6 MW would deliver around 10 million of extra revenue a year. Not really price sensitive info but would have been nice for a progress announcement or something.

[Plata]

Been pondering the impact of the solar development on GNE overall. My main wondering was how well does the relatively unpredictable output of solar synergise with the rather slow response of Huntleys non-peaker units.

As per the GNE CEO last year, the 250 MW turbines take six to 10 hours to get properly going. I'm not sure how long the 403 MW beast takes to get going but I imagine it is at least an hour. Solar can cut out pretty quickly with fast moving cloud, a large installation would probably only take a few minutes to be fully shaded by a large cloud. This could reduce the output to almost nothing if the clouds are dark and dense. This leads to me conclude that GNE cannot rely on the solar installations to reduce Huntley coal/gas usage without another source of firming. Unless this firming can be achieved with rapidly adjusting hydro output, it will likely be externally sourced (maybe if contact's battery project goes ahead?). If that is the case, I don't see how the solar will offer any added benefit to GNE other than increasing total energy sales. Does anyone know the ramp up time on the 403 MW gas turbine? or the 50 MW peaker?

[Raven]

Been pondering the impact of the solar development on GNE overall. My main wondering was how well does the relatively unpredictable output of solar synergise with the rather slow response of Huntleys non-peaker units.

As per the GNE CEO last year, the 250 MW turbines take six to 10 hours to get properly going. I'm not sure how long the 403 MW beast takes to get going but I imagine it is at least an hour. Solar can cut out pretty quickly with fast moving cloud, a large installation would probably only take a few minutes to be fully shaded by a large cloud. This could reduce the output to almost nothing if the clouds are dark and dense. This leads to me conclude that GNE cannot rely on the solar installations to reduce Huntley coal/gas usage without another source of firming. Unless this firming can be achieved with rapidly adjusting hydro output, it will likely be externally sourced (maybe if contact's battery project goes ahead?). If that is the case, I don't see how the solar will offer any added benefit to GNE other than increasing total energy sales. Does anyone know the ramp up time on the 403 MW gas turbine? or the 50 MW peaker?

Isn't the main benefit of solar (and wind) that their output (when available) allows you to reduce demand on other base generation? In NZ's case this would mean you close the tap a little on the hydro dam outlets and save that water for a future dry spell? I know they have to maintain a minimum flow rate at outlet but presumably that is often less than what is required for the hydro generation?  So no synergy, just increased overall sales, etc.

[arekaywhy]

Wind and solar are purely expensive, bonus energy.  Huntly and in some part hydro energy, are the reliable energy for base load.

I do hope that Genesis hang on to Huntly, and I have invested in them as I see them as the only true base load energy source this country has.  More of a feel good investment and at least a decent dividend payer.

[Plata]

Isn't the main benefit of solar (and wind) that their output (when available) allows you to reduce demand on other base generation? In NZ's case this would mean you close the tap a little on the hydro dam outlets and save that water for a future dry spell? I know they have to maintain a minimum flow rate at outlet but presumably that is often less than what is required for the hydro generation?  So no synergy, just increased overall sales, etc.

That only works if there are other sources of generation that can rapidly replace solar and wind in the event the sun is gone or the wind stops (which can happen rapidly). What I'm not certain of is the ability of hydro to rapidly ramp up to perform this job. To my knowledge large hydro installations must slowly adjust the flowrate and therefore power produced, which would make them poor candidates for backing up solar.

[Plata]

Wind and solar are purely expensive, bonus energy

They are actually some of the cheapest energy sources on a cost per kwh produced basis. The problem is they need firming (backup like batteries or peaker plants) to prevent blackouts when they suddenly cut out, which tends to be expensive sadly. In GNEs position, with high spot prices and little capital spare, it makes decent sense to pick a cheap option like solar that can offer significant extra generation with a short build time. The other advantage is GNE could obtain access to a location with room for 500 MW and only fill it partially with panels for now, and incrementally expand it over time. Same can't be said for a new hydro dam.

[THESTG]

https://youtu.be/fPmJFfKn4zk?list=PLXUccGn4ptEOiBgyrpEYMIl0xvB4W67qK

This set of videos from Transpower explains how reserve generation works to counteract any loss of generation on the New Zealand system.

[Raven]

https://youtu.be/fPmJFfKn4zk?list=PLXUccGn4ptEOiBgyrpEYMIl0xvB4W67qK

This set of videos from Transpower explains how reserve generation works to counteract any loss of generation on the New Zealand system.

Thanks THESTG.
I am onto video 4

EDIT - Crikey, watched all of them. Kind of how I thought it worked. You gotta hate those awful AUFLS.

[Raven]

Just theorising here, particularly in relation to the 30 minute trading cycle in the electricity market for the generators. Is solar actually that unreliable and prone to suddenly cutting out?

Sunrise and sunset are known, so a generator should be able to calculate their generation capacity for any moment of the day with near 100% accuracy on a "clear sky basis". Cloud cover will then reduce that, but again they should be able to make a reasonable estimate and use that as the basis of their supply offer to the market. So is solar really that unpredictable in the next 1 hour? If the forecast is lots of cloud then you only offer "x"% of capacity, etc.

Solar is absolutely unreliable over a timeframe of days or more, but is it that unreliable over a 30-minute forecast period?

[Plata]

Sunrise and sunset are known, so a generator should be able to calculate their generation capacity for any moment of the day with near 100% accuracy on a "clear sky basis". Cloud cover will then reduce that, but again they should be able to make a reasonable estimate and use that as the basis of their supply offer to the market. So is solar really that unpredictable in the next 1 hour? If the forecast is lots of cloud then you only offer "x"% of capacity, etc.

Solar is absolutely unreliable over a timeframe of days or more, but is it that unreliable over a 30-minute forecast period?

I did not consider using cloud cover forecasts to predict power output. From some quick googling it looks like other solar farms use technology like that, if it is reliable then maybe GNE really can rely on the solar. If they can use Huntley to fill in the gaps of a few reasonably predictable solar farms, cost of generation will plummet. I mean, the cost per kwh from coal vs solar is night and day excuse the pun. Reducing the utilisation of Huntley may also help extend its operational life, but I'm no mechanic.

[arekaywhy]

They are actually some of the cheapest energy sources on a cost per kwh produced basis. ...

http://www.pc.gov.au/inquiries/completed/carbon-prices/report/carbon-prices.pdf

This report delves into other issues around subsidies, however, Box 4.1 on page 123 might interest you.

Does it not strike you as odd that if wind and solar were so cheap, then it should be literally everywhere in the developing world?

[winner (n)]

Recently the gap between GNE divie yield has been shrinking .... as the chart shows it is now the smallest since GNE floated ..... and much lower than the earlier part of the chart when interest rates were similar to what they are currently

To me it seems that this TINA thing is still alive and well ---- punters buying perceived high yields and maybe not be recompensed for 'risk'

For anybody interested if yields reverted to the last 5 year average a GNE share price of $2.50 is still on the cards

You cannot view this attachment.

[Basil]

No allowance for imputation credits is something I see as the key debating point.

I'm still not sure about your methodology.  At Friday's closing price I have them on a forecast gross yield of 8% inclusive of imputation credits for FY23 plus approx 9 cps divvy in just over 2 months.

That seems pretty attractive to me (4.5% gross premium) for a safe utility when the 10 year Govt stock rate is about 3.50%.

Has been better in years past but is that entirely relevant in a low interest rate environment where lots of people are chasing yield ?

Wished I'd backed another truck up at under $2.50 and not listened to some guy who said they might go as low as $2.20.  (Thankfully I have one truck load already)