About Genesis

Genesis has a Retail business, a Generation business and an interest in the Kupe oil and gas field.

Genesis is a diversified energy company.

We sell electricity, natural gas and LPG through our retail brands. We generate electricity, and trade electricity and natural gas, through our Generation business. We also have a 46% interest in the Kupe Joint Venture which owns the Kupe oil and gas field.

Retail

We are New Zealand's largest electricity and gas retailer, supplying energy through our two retail brands – Genesis and Energy Online – to more than 650,000¹ customer connections across New Zealand. Genesis is focused on attracting and keeping valuable residential, commercial and industrial customers throughout the country.

The convergence of digital applications, low-cost solar and the development of battery storage is gaining pace and is leading to greater choice, convenience and control for our customers. We are rethinking, refreshing and reimagining how we use energy in everyday life.

Generation

We also own and operate a portfolio of thermal generation and renewable generation assets located in different parts of New Zealand. The spread of locations and fuel types in the portfolio gives us significant operating flexibility.

Genesis' portfolio of generation assets comprises:

Thermal Generation: At 953 MW, the Huntly Power Station is the largest electricity generation facility in New Zealand by capacity. It is made up of two modern gas fired and two gas/coal fired generating units.
Renewable Generation: Genesis has three hydro schemes Tongariro (361.8 MW), Waikaremoana (138.0 MW) and Tekapo(179.0 MW). These schemes comprise eight power stations. Six are located in the North Island and two in the South Island. We also have a 7.3 MW wind farm at Hau Nui in the North Island. This geographical spread of generation helps reduce the impact of localised dry periods on Genesis' earnings.

Wholesale markets

We aim to generate and contract electricity at the lowest cost to the Company to meet its customer demand. The Company also aims to maximise the value of its excess thermal generation capacity during periods of higher wholesale electricity prices.

Kupe oil and gas

We have a 46% interest in the Kupe Joint Venture, which owns the Kupe oil and gas field. Kupe is an integral part of our business and provides a diversified source of revenue for us.

Financial reporting

To view our latest financial and operational reports please click here.

Based on Electricity Authority Customer Connections for electricity and Gas Industry Company Customer Connections for natural gas and customer accounts for LPG as at 31 December 2013.

Wholesale markets

Like other energy retailers, we buy and sell electricity on the New Zealand Electricity Market. We also buy and sell Emission Units (carbon credits).

The New Zealand Electricity Market

The New Zealand Electricity Market opened in 1996 after the split of the Electricity Corporation of New Zealand (ECNZ) into two main generators, ECNZ and Contact Energy. In 1999 the remainder of ECNZ was split into Genesis, Meridian Energy, and Mighty River Power, while Contact Energy was fully privatised.

Generators compete to generate by offering generation at different prices. The generator with the lowest priced offer gets priority to generate over more expensive offers from other generators. The market operates 24 hours a day, 7 days a week, with each offer being valid for one trading period (or half an hour).

The market is designed to reflect the most efficient means of generating at least cost to the consumer. In the short term, price signals are intended to give indications to generators and consumers as to the supply situation. When supply is tight, prices rise, but when supply is plentiful prices fall. A long term increase in the spot price is a signal to generators to invest in more capacity in the market.

The New Zealand Electricity Market is split into four separate areas. This includes generators, high-voltage transmission network owners (Transpower), distribution network owners and retailers. The main generators are also retailers in the various distribution network areas (i.e. Powerco, Vector etc).

The New Zealand Electricity Market was previously a self-regulated market overseen by M-Co and the market surveillance committee; however, as of March 2004 market regulation has been conducted by the Electricity Commission. The set of rules designed by the Electricity Commission to govern the New Zealand Electricity Market is known as the Electricity Governance Rules or the EGRs.

Trading electricity

Trading is essentially the buying and selling of electricity in the New Zealand electricity market. The buying and selling occurs 24 hours a day, seven days a week, for each half hour period of the day. Generators sell their generation into the market; retailers buy this generation and sell it to customers as electricity. In summary, a trader determines whether to buy or sell electricity based on the spot price and the generation assets that they have available to them.

Emissions trading

Genesis has compliance obligations under the New Zealand Emissions Trading legislation and regulations (NZETS). Obligations arise from Genesis' operational activities, including using gas to generate electricity. To be compliant Genesis is required to procure and surrender Emission Units to the government to offset the obligation. The obligation is calculated in the Annual Emission Return as detailed in the legislation.

Emission Units are defined by the UNFCCC under the Kyoto Protocol and each is equivalent to one tonne of CO2. There are several types of unit, each having different qualities that affect their market value. Units are held in electronic registries administered by governments around the world. In many ways, units can be thought of as legal tender. Units are minted by the UNFCCC then held in registry accounts - much like bank accounts. Like internet banking, owners of units can transfer them around the world.

To be compliant Genesis is required to procure and surrender Emission Units to the government to offset the obligation. The obligation is calculated in the Annual Emission Return as detailed in the legislation.