Genesis posts improved first-half profit

Genesis Energy has reported an improved first-half profit on gains from electricity hedges, but underlying earnings were flat as the company looks to transition into renewable energy.

Genesis chief executive Marc England said the strong result came from holding on to more of its customers, with the churn rate falling for a sixth consecutive quarter, and it attracted back customers with its offer of domestic gas supplies.

The company operates the coal/gas fired Huntly station, which provides base load back up when power demand increases, as well as some hydro stations and wind farms.

However, it has been expanding its renewable generation with more wind farms and moves into solar power.

"We're investing in enhanced digital capabilities, new sources of renewable generation, and in maximising the efficiency and output of our assets, all important for future growth as we manage the transition to a sustainable future," England said.

He said this year would be "pivotal" for the electricity sector, with the Emissions Reduction Plan due from the government, and the budget expected to allocate capital on climate change policies.

"Genesis has a key role to play with agreements for wind and geothermal generation, expanding our portfolio into grid-scale solar, and continuing our work to ensure back-up generation at Huntly supports the transition."

England said the Huntly station remained a viable alternative to the proposed Lake Onslow pumped hydro scheme, currently being studied by the government, as a power source during dry years and low hydro lake levels.

He said a Genesis study showed the electricity sector would be 96 to 98 percent renewable by the end of the decade, but significant back up resources would be needed.

"Biomass through Huntly's Rankine units could provide a relatively low-cost renewable back-up option out to 2040."

Genesis was forecasting full year operating earnings of $430-$440m, depending on lake levels, gas availability, and any one-off events.