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Investments

The Power Company Ltd (TPCL) has a number of investments in the electricity network sector. Following is a summary of these investments.

TPCL entered into a 50/50 partnership with Electricity Invercargill Ltd (EIL) to form PowerNet in 1994. Reduced costs through economies of scale and the ability to maximize benefits for consumers were the main drivers for the joint venture.
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TPCL and EIL retain the ownership of their respective network assets and PowerNet manages the assets on their behalf. This management is implemented through agreed capital and maintenance works programmes which constitute the major part of the business plans. Each company has its own business plan prepared by PowerNet and approved by the respective network owners.

TPCL and EIL also formed another joint venture company, Electricity Southland Ltd (ESL), to take advantage of investment and development opportunities. ESL owns an embedded network in Frankton and Wanaka in Central Otago. This network is also managed by PowerNet.

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OtagoNet Joint Venture (OJV) is owned wholly by EIL and TPCL.  OJV was formed in 2002 following the purchase of the electricity network assets from the shareholders of the consumer co-operative company Otago Power Ltd.

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Wind and hydro power generation are clean, green renewable electricity generation assets that fit with TPCL’s wider strategies, including the transition from fossil fuels to renewables where possible.


In 2015, TPCL joined with EIL and Pioneer Energy Ltd to create the Southern Generation Limited Partnership (SGLP). The partnership owns two wind farms—Mt Stuart near Lawrence and Flat Hill near Bluff, and two hydro stations – Aniwhenua on the Rangitaiki River in the Bay of Plenty and the Upper Fraser hydro power station in Central Otago,
commissioned in September 2019. The total value of SGLP assets is $151 million.


This renewable energy is managed by TPCL’s partner, Pioneer Energy Ltd. TPCL and EIL jointly own 50 percent of SGLP through the joint venture, Roaring Forties Energy Limited Partnership (RFELP). Pioneer Energy Ltd owns the remaining 50 percent. The return on investment for RFELP makes this investment by TPCL into distributed renewable energy generation a key strategic asset.


In 2019-20, the generation output of the two wind generation sites and two hydro power stations was assessed as 201GWh. Mt Stuart contributed 23GWh, Flat Hill 27GWh, Aniwhenua 128GWh and Upper Fraser 23GWh.


Favourable wind generation conditions resulted in a 9% increase in wind farm output for the 2018-19 year, however lower rainfall and hydro inflows in the Bay of Plenty resulted in the generation output for Aniwhenua being 17% lower than 2018-19, mostly offset by the new hydro generation from Upper Fraser. Pioneer Energy Ltd is constructing the last of the hydro power stations in the current investment commitment for SGLP. The Matiri
hydro power station is 15km north of Murchison, with a capacity of 4.7MW. It is due to be commissioned late winter 2020.