GNE - Genesis Energy

[xafalcon]

https://www.nzherald.co.nz/business/editorial-genesis-coal-gas-call-nz-needs-sensible-energy-power-supply-approach/ZY5PG4IBA5B6PKADDAIXPFCVK4/?lid=gf6zk70pmrrx  Paywalled

Excerpt: But we aren't able to guarantee a winter without potential blackouts yet. Gas has been a solution to fill the gap but supplies are falling. Genesis chief executive Malcolm Johns says gas production has dropped about 30 per cent faster than expected.

Glad my heat pump is working between 7 - 9 a.m. today but the system is starting to look like it's under considerable strain now.  Just as well we can rely on those Rankins burning coal to keep the heaters on.

They are burning diesel ATM, that shows how tight the market is

[kiwi2007]

Better start looking seriously for more generation because when all light vehicles in NZ are electric we'll need another 20% .

[xafalcon]

Better start looking seriously for more generation because when all light vehicles in NZ are electric we'll need another 20% .

Electricity demand will grow about 50% in the next 10 years with transport and process heat moving to electric. Does NZ Inc have a workable plan? Nope. And that extra demand will need backing (with thermal, hydro or geothermal, since nuclear is a non-starter), but the cheap backing-option (Lake Onslow) was canned by the current lot. So expensive chemical batteries will probably be the quick answer. But hey, no worries, the consumer will pay

[BlackPeter]

Electricity demand will grow about 50% in the next 10 years with transport and process heat moving to electric. Does NZ Inc have a workable plan? Nope. And that extra demand will need backing (with thermal, hydro or geothermal, since nuclear is a non-starter), but the cheap backing-option (Lake Onslow) was canned by the current lot. So expensive chemical batteries will probably be the quick answer. But hey, no worries, the consumer will pay

Interesting - while Europe is already using hydrogen and planning to significantly ramp up green hydrogen in the years to come are here in NZ still some backward looking groups whining about the loss of an extremely expensive and high risk dinosaur solution like Lake Onslaw which had no plan B at all.

Put all your eggs into one really expensive and risky basket - and if this basket breaks, than just keep whining.

Its not surprising that NZ is typically 30 to 50 years behind the rest of the civilised world, no matter whether we are talking productivity (we trail the OECD), removal of toxins from the environment (remember the leaded petrol saga - while everybody had it removed we still where whining about lack of NZ specific data) - last civilised country in the world removing that it. We are far behind the rest of the world in modern banking solutions - but hey - we are in the top three world wide in the per capita production of rubbish! But back to sutainable energy storage ...

So yes, we need to work on increasing sustainable energy storage. Storing gas (even hydrogen) is easy, well understood, easy to diversify and can be done where the energy is needed. You can even start with LPG and (if you plan instead of just whinging) whenever you are ready you  can swap from LPG to green hydrogen. The process to produce green hydrogen is easy.

Sure - storing water is not rocket science either, but suggesting to invest basically all our energy investments for the next decades into one huge artificial lake sitting very close to the soon to be expected big one is just ridiculously dumb, nearly as dumb as stopping gas exploration 6 years ago. Oh - oops - both ideas came from the same source, didn't they?

Oh dear ...

[Basil]

I would like to nominate your you BP for that post as the best post of the week on here.  Well said.
No worries, Julie Anne Genter and her other greenie extremists think wind turbines and solar will solve all our problems...opps hang on a minute...there's been very little wind lately and despite bright sunshine, oh my goodness, what do you know, one grid emergency after another.  She and her ilk should just move to the Chatham Islands and stay there.

[Hectorplains]

The process to produce green hydrogen is easy. 

Easy process, yes.  Economic, no.  Green hydrogen production, storage, and distribution is prohibitively expensive. Estimates as to when it will be more viable vary but 5 to 10 years seems to be the consensus.  Have we got that long?

[BlackPeter]

Easy process, yes.  Economic, no.  Green hydrogen production, storage, and distribution is prohibitively expensive. Estimates as to when it will be more viable vary but 5 to 10 years seems to be the consensus.  Have we got that long?

I assume you realise that there is no difference in storing and distributing any hydrogen from green hydrogen - and hydrogen is now used for some time in Europe and even more in China. Google it. No issues at all.

Production is neither difficult nor expensive - you only need DC and water.

Of course is the anti everything lobby telling you that hydrogen is expensive to produce. Thats' what they do. If you question the price argument however you find that they mean it is more expensive to produce hydrogen, than it is to just drill a hole into the ground and extract natural gas from the earth. Well, of course - but I heard we don't want to burn hydrocarbons anymore? So - better lets compare apples with apples, shall we?

The main issue with hydrogen production is that the energy efficiency is only something like 70 to 75%.

Lost energy.

However - ever did the calculations on Lake Onslow?

Efficiency to pump water into the Lake is roughly 90%. However - you need to turn it back into electricity, which gives you overall (best case) only 81%. However - you will keep much of the water for weeks and months in the lake. You wasted the power to pump it in, and than you loose the water through evaporation -  which makes Lake Onslow look pretty sad (and much more expensive) in comparison to hydrogen storage.

Your time argument is as well quite weak, given that the discussion started with somebody whining that we didn't pour all our money into Lake Onslow.

How long do you think it would have taken to bring that monster into operation? Make a plan, create a business case, go through years of resource and environment court hearings (and yes, there are plenty of very valid arguments against it - I would not want to live downstream of a huge wall of water in the case of an Earthquake ...), ah yes - and start to build it. Ask Fletcher Building how often they deliver mega projects like that in time and under budget. I doubt they can give you one successful example, but plenty of time and cost overruns.

I recon a decade would be pretty optimistic, better make it two - and if you get your earthquake (I hear the big one is overdue), than you start without any money left from square one. Great game, hey its just time and money, isn't it?

So, yes - it might take 5 to 10 years to create in NZ a green hydrogen economy. Sure - but this would be faster and much more flexible than one big and risky Lake Onslow water storage "solution".

I agree it would be nice to have a solution earlier than that, but this lost time goes on the account of the last inept government. NZ actually has enough natural gas to bridge the demand until we have a sustainable solution - its just that our past genius Labour Green government stopped 6 years ago any new search and drilling, which means we are now run out of options. Thanks Labour.

Tough, but hey - elections do have consequences. And we now have to pay for 6 years Labour / Green.

[Hectorplains]

I assume you realise that there is no difference in storing and distributing any hydrogen from green hydrogen - and hydrogen is now used for some time in Europe and even more in China. Google it. No issues at all.

Production is neither difficult nor expensive - you only need DC and water.

Of course is the anti everything lobby telling you that hydrogen is expensive to produce. Thats' what they do. If you question the price argument however you find that they mean it is more expensive to produce hydrogen, than it is to just drill a hole into the ground and extract natural gas from the earth. Well, of course - but I heard we don't want to burn hydrocarbons anymore? So - better lets compare apples with apples, shall we?

The main issue with hydrogen production is that the energy efficiency is only something like 70 to 75%.

Lost energy.

However - ever did the calculations on Lake Onslow?

Efficiency to pump water into the Lake is roughly 90%. However - you need to turn it back into electricity, which gives you overall (best case) only 81%. However - you will keep much of the water for weeks and months in the lake. You wasted the power to pump it in, and than you loose the water through evaporation -  which makes Lake Onslow look pretty sad (and much more expensive) in comparison to hydrogen storage.

Your time argument is as well quite weak, given that the discussion started with somebody whining that we didn't pour all our money into Lake Onslow.

How long do you think it would have taken to bring that monster into operation? Make a plan, create a business case, go through years of resource and environment court hearings (and yes, there are plenty of very valid arguments against it - I would not want to live downstream of a huge wall of water in the case of an Earthquake ...), ah yes - and start to build it. Ask Fletcher Building how often they deliver mega projects like that in time and under budget. I doubt they can give you one successful example, but plenty of time and cost overruns.

I recon a decade would be pretty optimistic, better make it two - and if you get your earthquake (I hear the big one is overdue), than you start without any money left from square one. Great game, hey its just time and money, isn't it?

So, yes - it might take 5 to 10 years to create in NZ a green hydrogen economy. Sure - but this would be faster and much more flexible than one big and risky Lake Onslow water storage "solution".

I agree it would be nice to have a solution earlier than that, but this lost time goes on the account of the last inept government. NZ actually has enough natural gas to bridge the demand until we have a sustainable solution - its just that our past genius Labour Green government stopped 6 years ago any new search and drilling, which means we are now run out of options. Thanks Labour.

Tough, but hey - elections do have consequences. And we now have to pay for 6 years Labour / Green.

Yes hydrogen is simple, DC plus water.  I'm not sure why you lobbed "only" on the front of DC, as generating that's where all the cost issues lie.  Hydrogen was one of the options looked at by Genesis for Huntly and my understanding is that it was rejected.  Regardless of the politics, if we want the power to stay on, and in early May we're already been hit with outage warnings, Huntly will be burning coal... and will now do so for many years to come.

[lorraina]

Once these are operating they may be of interest to NZ.?
https://www.rolls-royce.com/innovation/small-modular-reactors.aspx

[Auto Rower]

I wish Lorraina but hey don't forget we are pure & green apparently !!!

[BlackPeter]

Yes hydrogen is simple, DC plus water.  I'm not sure why you lobbed "only" on the front of DC, as generating that's where all the cost issues lie.  Hydrogen was one of the options looked at by Genesis for Huntly and my understanding is that it was rejected.  Regardless of the politics, if we want the power to stay on, and in early May we're already been hit with outage warnings, Huntly will be burning coal... and will now do so for many years to come.

Not quite sure what your point is - are you?

And no, DC is neither expensive nor complicated to generate ... just take AC and a diode ; I suppose science was not your strongest subject at school?

Anyway - yes, its a sad joke that the reckless decisions of our past Labour / Green government made the country dependant on burning dirty Indonesian coal instead of burning clean natural gas which we otherwise would have had.

[Left Field]

GNE $15-20 mill Downgrade on lower Kupe production

https://www.nzx.com/announcements/431437

Lower than expected production is estimated to result in a $15m to $20m reduction in FY24 EBITDAF versus previous guidance of around $430m. Normal FY25 financial planning is underway and will include an assessment of updated Kupe production levels and reserves.

[LoungeLizard]

Yep, the soothsayers on here were quite correct - kupe gas production/reserves just isn't as reliable as it used to be and this is probably a sign of things to come. GNE are right to move to solar and wind whilst still having Huntley and maybe battery storage. SP likely to take a hit this morning, but at these prices, long term, GNE is a good buy imo.

[Toddy]

NZO announced this morning that they are delisting from the NZX. The majority of their assets are now Australian and Indo.


Hopefully GNE will be up for purchasing the 4 percent holding that NZO would of had in the Kupe land for the planned solar farm.

This move by NZO also signals that they are not interested in any future cash out flows investing in NZ.

[Basil]

Ouch that's $75m down a rat hole with no result and worse, it's been reported elsewhere that gas production is 30% lower than where they expected it to be.  Kupe is in very steep decline and the next field reserve update is set to be a real shocker.  Unlikely they will throw another $75m at it in my opinion.  Obviously, this affects all future year's earnings as well as the current one.

That said, I think their ongoing advertising campaign is brilliant.  I see some real genius there and the latest one on T.V. hits all the right notes, (and not just because it has a cute Beagle in a jumper)...but the use of cute animals is well known to be effective in advertising if done with genuine creativity which is definitely the case here. I am sure at a retail level their advertising will be very good for growing market share...on the other hand at a generation level, things do not look so good. I could be interested if there's a big pullback to $2.00 but is the new lower dividend rate safe with Kupe running out of puff so quickly ?