Contact Energy's profits have rebounded by close to half despite the challenges of low rainfall and gas shortages.
Te Mihi power station Photo: Contact Energy
Contact chair Rob McDonald said 2021 was a "solid" financial result for the company.
- Net Profit up 49.8 percent from $125 million to $187m.
- Revenue rose 24.1 percent to $2.54 billion.
- Cash flow up 28 percent to $371m following higher operating earnings and lower interest costs.
- Full year dividend of 35 cents per share, compared 39 cents per share in FY 20.
"Contact has performed ahead of expectations after successfully navigating the potential departure of major energy users, short-term issues around low rainfall in the hydro catchments, and ongoing challenges around reliable gas supply," he said.
Dry weather, gas shortages and low hydro storage had been a feature of the energy sector over the past 8 months, putting pressure on renewable generation and pushing up wholesale power prices.
Contact chief executive Mike Fuge said the company had done an excellent job to secure gas when renewable generation had been constrained.
"We expect there'll be continued reliance on higher cost fuel sources (coal and gas) over the short-term, but these will be displaced over the next few years as more than three terrawatt hours of low-carbon, renewable generation plants come on stream, including our geothermal development at Tauhara," he said.
Contact successfully raised $400m to fund the 152 megawatt hour project in February, which is expected to come on line in 2023.
Last week, it announced that it had [https://www.rnz.co.nz/news/business/449035/genesis-energy-looking-at-solar-power-joint-venture
signed a commercial supply agreement] with Genesis Energy, which would see its rival take 40 percent of the power generated from the plant over a 15 year period.
The development at Tauhara would not stop there, Fuge said.
"The capital raise gives us the flexibility to execute on up to $800m of additional projects and we are actively looking at how we can bring more geothermal development forward in response to customer demand our renewable electricity."
However, Fuge said there was no doubt coal generated power would still be a feature of the electricity sector as it transitions to become 100 percent renewable by 2030.
"As an industry we will need work together to expedite sensible decarbonisation, while maintaining security of supply and affordability."
The company was also speaking to range of stakeholder about the possibility of consolidating the country's thermal generation assets into one entity.