Q2
FY 2017 Q2 MARKET
AND OPERATIONAL
INFORMATION
QUARTERLY
OPERATIONAL UPDATE
REINVIGORATED STRATEGY UNDERWAY
During the quarter Genesis Energy announced a reinvigorated strategy focused
on optimising its business to improve short term returns, innovation for medium
term growth and investing for long term value creation. Despite continued
challenges in the retail sector, there was growth in the target LPG market.
This disclosure includes market and
operational information for
In a competitive retail environment, electricity customer connections remained
Genesis Energy Limited for the quarter
under pressure finishing the quarter down 1.2% on Q1 FY2017 to 514,155 at 31
ending 31 December 2016 (Q2).
December 2016. The decline in customer connections combined with reduced
national demand relative to the same period last year saw a reduction in both
mass market and time of use (TOU) electricity volumes sold by 3.2% and 3.6%
respectively. The move towards digitisation is evidenced by increased uptake in
app downloads and the use of self service. Genesis Energy and Energy Online
app downloads totalled 105,043 at the end of December 2016.
5%
Total LPG customer
connections up in Q2
versus Q1 FY2017
92%
Total coal fired
generation was down
compared with Q2
FY2016
218t
Retail LPG sales were up
on Q2 FY2016
31%
Average price received
for generation was
$21/GWh lower than Q2
FY2016
Retail gas sales during the quarter remained flat at 1.7 PJ on Q2 FY2016, whilst
year to date volumes sold were up 1% on the prior year.
Q2 FY2017 provided further growth in the retail LPG segment for Genesis Energy.
LPG customer connections of 17,513 at 31 December 2016 were up 5% on Q1
FY2017 and up 22% on Q2 FY2016. Retail LPG sales volumes of 1,101 tonnes were
up 25% compared to the same period last year as a result of increased customer
connections and Genesis Energy’s strategy to pursue greater LPG market share.
A continued trend from Q1 FY2017 of greater inflows into Genesis Energy
catchments along with a planned Unit 5 outage at Huntly in November 2016
resulted in the Company being able to prioritise renewable generation over
thermal generation. Hydro generation during Q2 FY2017 was 22% higher than the
same period last year whilst total thermal generation was down 37%. The wet
conditions and high national storage levels lead to a supressed average price
received for generation (GWAP) of $47.07/GWh, which was 31% lower than the
price received a year ago. Offsetting this is a 21% reduction in the cost of fuel
from $37.22/MWh to $29.36/MWh over the same period which lessens the
impact of lower prices on margins.
During Q2, Rankine units operated on gas for 77% of the time. Total coal fired
generation was 92% lower than Q2 FY2016, with the coal stockpile at 360
kilotonnes at 31 December 2016. Genesis Energy is also reporting Equipment
Availability and Forced Outage Factors this quarter which remain on target
including the planned outage at Unit 5 in November 2016.
Kupe’s Q2 FY2017 production was up on Q2 FY2016 due to the extended outage in
in Q2 FY2016 (despite a 12 day unplanned outage in November 2016). Genesis
Energy’s share of gas sales of 1.7PJ and oil production of 89kbbl were above the
same period last year by 26.4% and 9.7% respectively. Year to date LPG sales are
2.5kt behind that of a year ago due to an outage on one of the LPG production
machines.
During Q2 FY2016, there was one lost time injury during the quarter. The Total
Recordable Injury Frequency Rate (TRIFR) at 31 December 2016 was 0.26 against
0.88 at 31 December 2015. There were 808 full time equivalent employees at the
end of Q2 compared to 860 a year ago as a result of recent cost saving initiatives.
2 | SECOND QUARTER FY2017
Electricity Customer Connections and Market
550,000
Share of Total Market (RHS)
Natural Gas Customer Connections and Market
Customer Connections
Share of Total Market (RHS)
29%
125,000
48%
530,000
28%
120,000
46%
520,000
27%
510,000
26%
500,000
25%
490,000
24%
480,000
23%
470,000
22%
460,000
21%
450,000
20%
Customers by connections
50%
540,000
115,000
44%
110,000
42%
105,000
40%
100,000
38%
95,000
36%
90,000
34%
85,000
32%
80,000
30%
Q1 FY12
Q2
Q3
Q4
Q1 FY13
Q2
Q3
Q4
Q1 FY14
Q2
Q3
Q4
Q1 FY15
Q2
Q3
Q4
Q1 FY16
Q2
Q3
Q4
Q1 FY17
Q2
Q1 FY12
Q2
Q3
Q4
Q1 FY13
Q2
Q3
Q4
Q1 FY14
Q2
Q3
Q4
Q1 FY15
Q2
Q3
Q4
Q1 FY16
Q2
Q3
Q4
Q1 FY17
Q2
Market Share
130,000
Customers by connections
30%
Source: Company data, Electricity Authority
Source: Company data, Gas Industry Co
Electricity Sales Volumes (GWh)
Retail Gas Sales Volumes (PJ)
Quarterly Mass Market Sales Volumes
Quarterly TOU Sales Volumes
6000
6.0
1000
0.5
0
0.0
Q1 FY12
Q2
Q3
Q4
Q1 FY13
Q2
Q3
Q4
Q1 FY14
Q2
Q3
Q4
Q1 FY15
Q2
Q3
Q4
Q1 FY16
Q2
Q3
Q4
Q1 FY17
Q2
8.4%
8.2%
8.0%
201612
Source: Company data
Kupe Oil Production Volumes (kbbl)
Kupe Gas Sales Volumes (PJ)
Quarterly Sales Volumes
Quarterly Production Volumes
580
2.5
540
2.0
420
380
340
7.0
6.0
1.5
5.0
PJ
460
9.0
8.0
thousand of barrels
500
Rolling 12 months sales volumes (RHS)
1.0
4.0
3.0
0.5
2.0
0.0
1.0
PJ
201610
201611
201608
201609
201606
201607
201605
201603
201604
201602
201601
7.8%
75%
74%
73%
72%
71%
70%
69%
68%
67%
66%
65%
% of total gas customer connections
8.6%
Dual Fuel % of Total Gas Customers (RHS)
85,000
83,000
81,000
79,000
77,000
75,000
73,000
71,000
69,000
67,000
65,000
Q1 FY12
Q2
Q3
Q4
Q1 FY13
Q2
Q3
Q4
Q1 FY14
Q2
Q3
Q4
Q1 FY15
Q2
Q3
Q4
Q1 FY16
Q2
Q3
Q4
Q1 FY17
Q2
8.8%
Customers by connections
9.0%
Market Share %
9.2%
Q1 FY12
Q2
Q3
Q4
Q1 FY13
Q2
Q3
Q4
Q1 FY14
Q2
Q3
Q4
Q1 FY15
Q2
Q3
Q4
Q1 FY16
Q2
Q3
Q4
Q1 FY17
Q2
0.0
Dual Fuel Customer Connection Base
9.4%
201512
Kilotonnes
1.0
Dual Fuel Customer Connections
Source: Genesis Energy/LPGA/MBIE
thousand of barrels
3.0
2.0
Rolling 12m Market Share (RHS)
Rolling 12 months production volumes (RHS)
4.0
PJ
PJ
GWh
2000
1.0
Est. Residential LPG 45kg Market Share by Volumes
Rolling 12m Sales
5.0
1.5
NEW DISCLOSURE
4.3
4.2
4.1
4.0
3.9
3.8
3.7
3.6
3.5
3.4
3.3
7.0
2.0
4000
3000
8.0
2.5
5000
Q1 FY12
Q2
Q3
Q4
Q1 FY13
Q2
Q3
Q4
Q1 FY14
Q2
Q3
Q4
Q1 FY15
Q2
Q3
Q4
Q1 FY16
Q2
Q3
Q4
Q1 FY17
Q2
GWh
Rolling 12 months sales volumes (RHS)
1800
1600
1400
1200
1000
800
600
400
200
0
Quarterly TOU Sales Volumes
Rolling 12 months sales volumes (RHS)
3.0
Q1 FY12
Q2
Q3
Q4
Q1 FY13
Q2
Q3
Q4
Q1 FY14
Q2
Q3
Q4
Q1 FY15
Q2
Q3
Q4
Q1 FY16
Q2
Q3
Q4
Q1 FY17
Q2
Quarterly Mass Market Sales Volumes
200
180
160
140
120
100
80
60
40
20
0
Market Share
Customer Connections
3 | SECOND QUARTER FY2017
Genesis Energy vs. Industry Electricity Customer Connection Switching
26%
24%
% annualised
22%
20%
18%
16%
14%
12%
Dec-16
Oct-16
Aug-16
Jun-16
Apr-16
Feb-16
Oct-15
Aug-15
Jun-15
Apr-15
Feb-15
Dec-14
Oct-14
Dec-15
Source: Genesis Energy,
Electricity Authority
Genesis Energy Electricity Sales Volumes
700
Electricity - GWh
NZ Electricity Market Monthly Switching Rate
Industry rolling 12m
7,000
600
6,000
500
5,000
400
4,000
300
3,000
200
2,000
100
1,000
TOU Contract
TOU Spot
TOU Hedged
Dec-16
Sep-16
Jun-16
Mar-16
Dec-15
Sep-15
Jun-15
Mar-15
Dec-14
Sep-14
Jun-14
Dec-13
Mar-14
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
Dec-10
Total MM
Source: Genesis Energy
Mar-11
Sep-10
0
Jun-10
0
Electricity - GWh
Genesis Energy Monthly Switching Rate
Genesis Energy 12 Month Rolling Switching Rate
Aug-14
Jun-14
Apr-14
Feb-14
Dec-13
Oct-13
Aug-13
Jun-13
Apr-13
Feb-13
Dec-12
Oct-12
Aug-12
Jun-12
10%
Rolling 12m Total Sales Volumes (RHS)
4 | SECOND QUARTER FY2017
Otahuhu ASX Futures Settlement Price
As at 31/03/2016
As at 30/06/2016
As at 30/09/2016
As at 19/12/2016
90
80
$74.23
$73.34
$71.49
$67.23
70
$58.23
60
$/MWh
$80.38
$78.05 $79.59
$77.86
$76.66 $77.88 $78.15
50
40
30
20
10
0
FY17
FY18
FY19
Genesis Energy Generation Volumes Q2 2017
4,000
3,500
3,000
Hau Nui Wind Farm
Tekapo A and B power stations
2,500
GWh
Waikaremoana Power Scheme
Tongariro Power Scheme
2,000
Huntly Unit 6
1,500
Huntly Unit 5
Huntly Units 1 to 4 Gas
1,000
Huntly Units 1 to 4 Coal
500
0
Q2 2017
Q2 2016
Q2 YTD 2017
Q2 YTD 2016
5 | SECOND QUARTER FY2017
NEW DISCLOSURE
Rankine Unit Generation Output
Coal
Gas
700
600
128
400
72
300
454
200
300
100
82
24
0
Q2 2017
NEW DISCLOSURE
55
Q2 2016
Q2 YTD 2017
Q2 YTD 2016
Plant Performance
Monthly Equipment Availability Factor
Monthly Forced Outage Factor
100%
20%
90%
18%
80%
16%
70%
14%
60%
12%
50%
10%
40%
8%
30%
6%
20%
4%
10%
2%
0%
0%
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Equipment Availability Factor (EAF) %
131
Equipment Availability Factor (EAF) - the percentage of time a power station is available to generate electricity.
Forced Outage Factor (FOF) - the percentage of time a power station is unavailable to generate electricity due to unplanned failure or defect.
Forced Outage Factor (FOF) %
GWh
500
2 | SECOND QUARTER FY2017
Daily Average Wholesale Reference Point Prices
and National Hydro Storage - Q2 FY2017
Otahuhu (OTA2201)
FY2017 Storage
$80
4,000
$70
3,500
$60
3,000
$50
2,500
$40
2,000
$30
1,500
$20
1,000
$10
500
$-
30-Dec
25-Dec
20-Dec
15-Dec
10-Dec
5-Dec
30-Nov
25-Nov
20-Nov
15-Nov
Source: COMIT/Genesis Energy
10-Nov
5-Nov
31-Oct
26-Oct
21-Oct
16-Oct
11-Oct
6-Oct
1-Oct
0
Tekapo Storage vs Long Run Average Q2 FY2017
Tekapo Storage
Long Run Average Storage
700
600
GWh
500
400
300
200
100
16-Dec
20-Dec
24-Dec
28-Dec
01-Jan
16-Dec
20-Dec
24-Dec
28-Dec
01-Jan
12-Dec
08-Dec
04-Dec
30-Nov
26-Nov
22-Nov
18-Nov
14-Nov
10-Nov
06-Nov
02-Nov
29-Oct
25-Oct
21-Oct
17-Oct
13-Oct
09-Oct
05-Oct
01-Oct
0
Source: COMIT
Waikaremoana Storage vs Long Run Average Q2 FY2017
Waikaremoana Storage
Long Run Average Storage
140
120
GWh
100
80
60
40
20
Source: COMIT
12-Dec
08-Dec
04-Dec
30-Nov
26-Nov
22-Nov
18-Nov
14-Nov
10-Nov
06-Nov
02-Nov
29-Oct
25-Oct
21-Oct
17-Oct
13-Oct
09-Oct
05-Oct
01-Oct
0
Lake Storage (GWh)
Wholesale Price ($/MWh)
Benmore (BEN2201)
Storage Long Run Average (RHS)
3 | SECOND QUARTER FY2017
APPENDIX
OPERATIONAL INFORMATION
Second Quarter (October to December)
Operational Information*
FY2017
FY2016 % Change
Change
Year to Date
FY2017
FY2016 % Change
Change
Market Information
Customer-focus
Electricity Market Share (%) 1
25.1%
25.8%
-2.8%
-0.7%
Gas Market Share (%) 1
38.7%
39.8%
-2.9%
-1.2%
Customer Satisfaction (%) 2
Total Advanced Meters Installed To Date (#)
Customer Numbers
96%
393,857
95%
368,500
1.1%
6.9%
1%
25,357
Total Customer Connections (#) 3
Total Customers by Product:
645,365
654,334
-1.4%
-8,969
Electricity Customer Connections (#) 4
535,438
543,997
-1.6%
-8,559
Electricity Customer Connections Excluding Vacants (#) 4
514,155
522,586
-1.6%
-8,431
Gas Customer Connections (#) 4
109,927
110,337
-0.4%
-410
106,388
106,809
-0.4%
-421
17,513
14,326
22.2%
3,187
North Island Electricity Customer Connections (#) 4
428,010
434,485
-1.5%
-6,475
South Island Electricity Customer Connections (#) 4
Customer Volumes and Price
86,145
88,101
-2.2%
-1,956
Volume Weighted Average Electricity Selling Price Mass Market ($/MWh) $243.66
Customer Experience
Customer-focus
Gas Customer Connections Excluding Vacants (#)
4
LPG Customer Connections (#) 5
Total Electricity Customers by Location:
6
Volume Weighted Average Electricity Selling Price TOU ($/MWh) 7
Mass Market Electricity Sales (GWh)
TOU Electricity Sales (GWh)
Total Electricity Sales - Retail (GWh)
Electricity Sales - Wholesale (GWh)
Volume Weighted Average Gas Selling Price ($/GJ) 6
Mass Market Gas Sales (PJ)
TOU Gas Sales (PJ)
Total Retail Gas Sales (PJ)
Retail LPG Sales (tonnes)
Electricity Purchases - Retail (GWh)
Electricity Purchases - Wholesale (GWh)
Retail Gas Purchases (PJ)
Average Retail Electricity Purchase Price - LWAP ($/MWh) 8
LWAP/GWAP Ratio (%)
Energy Management
Generation
Gas (GWh)
Coal (GWh) 9
Total Thermal (GWh)
Hydro (GWh)
Wind (GWh)
Total Renewable (GWh)
Total Generation (GWh)
Average Price Received for Generation - GWAP ($/MWh) 8
Generation Emissions (ktCO 2)
Generation Carbon Intensity (tCO 2/GWh)
Total Recordable Injury Frequency Rate 11
Fuel
Gas Purchases (PJ)
Coal Purchases (PJ)
Wholesale Gas Sales (PJ)
Wholesale Coal Sales (PJ)
Gas Used In Internal Generation (PJ)
Coal Used In Internal Generation (PJ) 10
Weighted Average Fuel Cost ($/MWh) 12
Coal Stockpile - closing balance (kilotonnes)
Kupe Oil and Gas
Genesis Energy Share
Gas Sales (PJ)
Oil Production (kbbl)
Oil Sales (kbbl)
Average Brent Crude Oil (USD/bbl)
LPG Sales (kilotonnes)
$239.44
1.8%
$4.22
$239.13
$234.95
1.8%
$4.18
$104.67
979
291
1,270
400
$29.54
0.9
0.8
1.7
1,101
1,301
297
1.7
$99.86
1,011
302
1,313
395
$28.85
0.9
0.8
1.7
883
1,408
250
1.7
4.8%
-3.2%
-3.6%
-3.3%
1.3%
2.4%
6.2%
-5.7%
0.4%
24.6%
-7.6%
19.1%
0.5%
$4.81
-32
-11
-43
5
$0.69
0.1
0.0
0.0
218
-107
48
0.0
$117.12
2,323
593
2,916
958
$25.43
2.5
1.8
4.3
2,570
3,064
732
4.4
$111.38
2,394
621
3,015
857
$24.94
2.6
1.7
4.2
2,202
3,186
618
4.3
5.1%
-3.0%
-4.5%
-3.3%
11.8%
2.0%
-1.3%
4.3%
0.9%
16.7%
-3.8%
18.5%
1.5%
$5.73
-71
-28
-99
101
$0.50
0
0
0.0
368
-122
114
0.1
$47.01
100%
$66.72
98%
-29.5%
2.3%
($19.72)
2.3%
$53.43
100%
$61.90
100%
-13.7%
-0.1%
($8.47)
-0.1%
627
23
650
749
7
756
1,406
724
301
1,025
615
7
622
1,648
-13.4%
-92.4%
-36.6%
21.7%
-2.8%
21.4%
-14.7%
-97
-278
-375
134
-0.2
133
-241.9
1,432
53
1,485
1,613
12
1,625
3,110
1,476
458
1,933
1,431
13
1,444
3,377
-3.0%
-88.4%
-23.2%
12.8%
-12.4%
12.5%
-7.9%
-44
-404
-448
182
-1.6
181
-267.3
$47.07
291
207
0.26
$68.35
602
366
0.88
-31.1%
-51.8%
-43.5%
-70.5%
($21.28)
-311.8
-158.9
-0.6
$53.36
660
212
$61.78
1,071
317
-13.6%
-38.3%
-33.0%
($8.41)
-410.3
-104.7
10.5
0.0
3.8
0.2
5.0
0.3
$29.36
360.6
10.5
0.7
3.2
0.2
5.6
3.3
$37.22
600.4
-0.3%
-100.0%
17.7%
-22.5%
-10.9%
-91.2%
-21.1%
-39.9%
0.0
-0.7
0.6
-0.1
-0.61
-3.0
($7.86)
-240
23.5
-0.4
8.0
0.4
11.2
0.7
$30.04
24.3
3.0
8.7
0.5
11.3
5.1
$34.40
-3.3%
-112.0%
-8.6%
-25.9%
-1.2%
-85.6%
-12.7%
-0.8
-3.3
-0.7
-0.1
-0.1
-4.4
($4.36)
1.7
88.7
72.4
49.5
5.9
1.3
80.9
56.6
43.7
5.7
26.4%
9.7%
27.8%
13.2%
4.3%
0.4
7.8
15.7
5.8
0.2
3.8
195.8
146.8
47.7
11.5
3.4
207.3
158.6
47.0
14.1
10.8%
-5.6%
-7.4%
1.4%
-18.0%
0.4
-12
-12
0.7
-2.5
Notes:
1
December 2015 and 2016 market shares based on published customer records from the Electricity Authority and Gas
Industry Company
2
Based on the survey question: "Overall, how satisfied are you with the customer service you have received from
Genesis Energy where 1 is very dissatisfied and 10 is very satisfied?". Survey started in October 2013
3
Based on Genesis Energy customer records. Includes vacant accounts. Excludes LPG customers. Electricity and gas
customers are defined by number of connections.
4
Electricity and gas customers are defined by number of connections (ICP).
5
LPG connections are defined by number of customers
Average selling price for mass market customers including lines/transmission and distribution and after prompt payment discount
Average selling price for TOU customers including lines/transmission and distribution
8
Excludes settlements from electricity derivatives.
9
Coal generation is calculated by applying coal burn to monthly average heat rates
6
7
10
11
12
Results have been revised to reflect changes in coal kilotonnes to PJ conversion rate and volume methodology
Rolling 12 month TRIFR per 200,000 hours worked
NEW DISCLOSURE - Total fuel burnt divided by total generation