Mercury Energy

Mercury

Type	Public
Traded as	NZX: MCY ASX: MCY
Industry	Electric power generation
Predecessor	ECNZ, Mighty River Power
Founded	1 April 1999 (1999-04-01)
Headquarters	Auckland , New Zealand
Key people	Vince Hawksworth (CEO)
Products	Electric power
Services	Electricity retailing
Revenue	NZ$2,000M (2019)[1]
Operating income	NZ$505M (2019) [1]
Net income	NZ$357M (2019) [1]
Total assets	NZ$6,484M (2019) [1]
Total equity	NZ$3,537M (2019) [1]
Owner	New Zealand Government (51.15%)
Number of employees	800
Subsidiaries	GLOBUG (prepay power) Bosco (services apartment buildings)
Website	www.mercury.co.nz

Mercury NZ Limited is a New Zealand electricity generation and electricity retailing company. All of the company's electricity generation is renewable. It owns and operates nine hydroelectric generating stations on the Waikato River and five geothermal plants in the Taupo area.^[2]

In 2015, the company under the Mighty River Power brand generated 17% of the country's electricity.^[3] In 2017, Mercury had a 19% share of the New Zealand retail electricity market.^[4]

History[]

Mercury NZ Ltd[]

Mercury NZ Limited was formed in 1994 by the Auckland Energy Consumer Trust to own and run the electricity supply business previously operated by the community-owned local authority, Auckland Electric Power Board. In 1998, law changes obliged AEPB to sell the electricity retailing and generation part of the business.

Following the 1998 Auckland power crisis Mercury's electricity retailing division was sold to Mighty River Power, which was then a wholly state-owned SOE. Mighty River Power's retailing division continued the former trading name Mercury Energy. The electricity distribution business, Mercury Energy Limited, changed its name to Vector Limited and continued the distribution and transmission operation.

Mighty River Power[]

Mighty River Power was established on 1 April 1999, when the 1998 reform of the electricity sector took effect. The Electricity Corporation of New Zealand (ECNZ) was broken up into three state-owned generating companies - Mighty River Power, Genesis Energy and Meridian Energy. Mighty River Power took over the ownership and operation of the eight hydroelectric power stations on the Waikato River, New Zealand's longest, and also inherited the assets of two largely decommissioned oil-fired power stations at Marsden Point, near Whangarei.

In addition, the 1998 reforms forced the separation between lines (transmission and distribution) and supply (generation and retailing). On 1 April 1999, Mercury Energy, then the major lines and supply company for Auckland, New Zealand's largest city, was split between lines and supply. Mighty River Power inherited Mercury Energy's retail base and its share in the Southdown Power Station (in conjunction with the Natural Gas Corporation). Mercury Energy then became the name of Mighty River's retail business, and the sub-transmission and distribution business of Mercury Energy was renamed Vector.

In 2000, Mighty River purchased into the Rotokawa geothermal power station, to operate and maintain the station, and own the geothermal turbines in a joint venture with the Tauhara North No.2 Trust. Also that year, Mighty River Power commissioned the Mokai geothermal power station in a joint venture with the Tuaropaki Trust.

In September 2002, Mighty River gained 100 percent ownership of the Southdown power station.

In 2004, Mighty River announce plans to refurbish the Marsden B plant to fire it on coal to increase supply security north of Auckland. Marsden B had been mothballed since it was completed in 1978 due to rising oil prices following the 1973 oil crisis and there being cheaper alternatives available. Greenpeace staged a nine-day occupation of the site in 2005, and after the Northland Regional Council granted consent, appealed to both the Environment Court and High Court, eventually overturning the consent. Mighty River appealed the High Court decision to the Court of Appeal, but in March 2007 dropped the proposal.

In 2008, Mighty River increased its generating capacity by opening the 100 MW Kawerau geothermal power station, increasing supply security to the eastern Bay of Plenty, a large timber processing area. In 2010, it opened the 140 MW Nga Awa Purua geothermal station near Taupo, complete with the largest single-shaft geothermal turbine in the world. The commissioning of Nga Awa Purua increased Mighty River's geothermal capacity to 385 MW, becoming the nation's largest geothermal electricity generator with 52.7 percent of all installed geothermal capacity.

Partial privatisation[]

In December 2011, the National Government announced plans to reduce its shareholding in Mighty River Power, as well as in the three other state-owned energy companies, from 100 percent to 51 percent and to sell off the remaining 49 percent as part of its controversial "mixed-ownership model" plan. Mighty River Power was to be the first company to be partially sold in September 2012, pursuant to legislative changes and market conditions.^[5][6] However, threatened legal action and unfavourable market conditions saw the government delay any sale until March 2013 at the earliest.^[7]

The Government began taking registrations of interest from the public in Mighty River Power shares on 5 March 2013.^[8][9] More than 35,000 people tried to register in the first six hours,^[10] causing the registration website to crash for much of the day.^[11][12] By midnight, more than 90,000 people had registered.^[13][14]

In anticipation of the sale, in April 2013 State Owned Enterprises Minister Tony Ryall said director fees would be increasing from $49,000 a year to $85,000, and the chair's fees from $98,000 to $150,000, despite still being majority-owned by taxpayers.

The Financial Markets Authority approved the sale of Mighty River Power on 12 April, with the initial public offering (IPO) opening on 15 April.^[15] However, the IPO was temporarily suspended on 22 April while a supplementary disclosure was issued, after the Labour and Green parties in opposition announced plans to reform the electricity market if elected to government at the 2014 election. At the close of the IPO on 5 May, there were 113,000 shareholders, and on 8 May the opening share price was set at $2.50, raising $1.7 billion.^[16] The Government was slightly disappointed, blaming the Labour-Green policy for putting off many more potential shareholders, and with the Finance Minister indicating before the policy was announced that the price would be in the $2.70 to $2.80 range.^[17] The government retained 51.78 percent of the shareholding, with another 1.02 percent owned by other Crown interests (mainly the New Zealand Superannuation Fund).^[18]

By September, shares had slumped to $2.16, well below the float price,^[19] and in October the company announced it would be buying back up to $50 million in shares.^[20] By November 2015, the share price had exceeded the listing price, at $2.88.

The gas fired Southdown Power Station, a 170 MW combined cycle power station in south Auckland was closed in December 2015.

Name change[]

The company changed its name to Mercury NZ Limited on 29 July 2016, after merging its retail and generation businesses.^[21] The company also launched a new brand logo, moving from the Roman god Mercury, to a bee. Market research showed New Zealand had a stronger connection to the bee as a symbol. ^[22]

Power stations[]

Mercury operates 13 power stations, all in Auckland, Waikato, and the Bay of Plenty. In total, the company has 1638 MW of generating capacity - composed of 1078 MW hydroelectric, 385 MW geothermal, and 175 MW natural gas.

Name	Type	Location	Capacity (MW)	Annual generation (average GWh)[23]	Commissioned	Notes
Arapuni	Hydroelectric	Waikato River	196.7	864	1946
Aratiatia	Hydroelectric	Waikato River	78	333	1964
Atiamuri	Hydroelectric	Waikato River	84	293	1962
Karapiro	Hydroelectric	Waikato River	96	506	1948
Kawerau	Geothermal	Kawerau, Bay of Plenty	100	831	2008
Maraetai	Hydroelectric	Waikato River	360	875	1954, 1971
Mokai	Geothermal	North-west of Taupo	112	926	2000	Joint venture with Tuaropaki Trust
Nga Awa Purua	Geothermal	North of Taupo	140	1132	2010	Joint venture with Tauhara North No.2 Trust World's largest geothermal turbine (147 MW rated)
Ngatamariki	Geothermal	North of Taupo	82	687	2013
Ohakuri	Hydroelectric	Waikato River	112	402	1962
Rotokawa	Geothermal	North of Taupo	33	270	1997	Joint venture with Tauhara North No.2 Trust
Waipapa	Hydroelectric	Waikato River	51	239	1961
Whakamaru	Hydroelectric	Waikato River	100	494	1956

Acquisition of wind farms from Tilt Renewables[]

In 2021 Mercury partnered with Powering Australian Renewables (PowAR) to enter into a Scheme Implementation Agreement (SIA) with Tilt Renewables Limited. Under the terms of the transaction, PowAR will acquire all the shares of Tilt (including Mercury’s shares) for NZ$8.10 per share, and Mercury will acquire all of Tilt’s New Zealand operations, including its future development options.

In addition to Tilt shareholder approval, the Scheme is conditional on High Court approval, and regulatory approvals but the deal is expected to be finalized by August 2021 – the assets acquired will be:

Name	Type	Location	Capacity (MW)	Annual generation (average GWh)	Commissioned	Notes
Tararua Wind Farm I & II	Wind	Tararua Ranges	68MW	245GWh	Stage 1: 1991 Stage 2: 2004	Tararua is currently NZ's largest wind farm.
III	Wind	Tararua Ranges	93MW	318GWh	2007	Tararua is currently NZ's largest wind farm.
Mahinerangi Wind Farm	Wind	Otago	36MW	101GWh	2011
Waipipi Wind Farm	Wind	South Taranaki	133MW	455GWh	2021

Generation developments[]

Name	Type	Location	Planned capacity (MW)	Status
Puketoi	Wind			Consent application lodged August 2011,[24] granted June 2012[25]
Te ia a Tutea	Geothermal	North-east of Rotorua		Initial exploration[26]
Turitea	Wind	South-east of Palmerston North	220	Under construction

International developments[]

Name	Type	Location	Planned capacity (MW)	Status
Hudson Ranch	Geothermal	California, USA	50	Opened May 2012[26]
Tolhuaca	Geothermal	Southern Chile		Exploration[26]
Puchuldiza	Geothermal	Northern Chile		[27]
Weilheim	Geothermal	Germany		Exploration[26]

Subsidiaries[]

In addition to its generation assets, Mercury also incorporates or has major shareholdings in:

• Bosco Connect, an electricity retailer to inner city apartments
• Glo-Bug, a pre-pay electricity retailer
• What Power Crisis, supplying Solar Power installations as Mercury Solar

See also[]

• Electricity sector in New Zealand
• List of power stations in New Zealand
• Starship Foundation, a charity supported by Mercury since 2001^[28]

References[]

External links[]

• Official website