North Canterbury lines company MainPower posted a $4.95 million after-tax operational profit in the 2020 financial year, up from $1.56 million the previous year.
“This was largely driven by strong lines revenue, and efficiency and effectiveness in delivering both maintenance and the expanded capital works programme,” MainPower chair Tony King says in the company’s annual report.
“The increase in the value of the distribution network further boosted the results to give a total income of $10.73 million.”
Revenue rose by more than $3 million ($59.4 million in FY2020 up from $56.2 million in FY2019).
This was largely driven by increased irrigation in a dry autumn, partly offset by reduced contracting and customer contribution revenues.
Customer rebates reached $10.55 million in FY2020 compared to $9.68 million the previous year.
With land development activity declining in North Canterbury, revenue from contracting and capital contributions has continued to trend downwards.
King says MainPower is continuing to focus on improving operating performance to position itself for sustainable growth.
Asset management and development
Capital spend increased significantly – $19.69 million was invested into MainPower’s network, compared to $7.87 million in 2019.
Major projects to be initiated in the current year include the Southbrook 66kV substation upgrade, Ludstone zone substation switchgear replacement, and the Hanmer 33kV sub transmission line conductor upgrade.
MainPower has also invested in a trial with Solagri, a business specialising in on-farm solar and battery systems generating renewable energy solutions for the agri-sector.
Mt Cass Wind Farm
In December 2019, MainPower began pre-construction site works for its $200 million Mt Cass Wind Farm, about 60 kilometres north of Christchurch.
The 22-turbine, 93 MW facility would be New Zealand’s largest wind farm developed by a non-gentailer and the largest wind farm in the South Island.
MainPower had expected to reach financial close and offtake arrangements by July 2020, and construction was expected to be completed by late 2021.
But then the Covid-19 pandemic intervened, delaying progress on the project.
A spokesperson tells Energy News that MainPower now expects to reach financial close in early 2021 “providing all conditions are met”.
But the announcement that the Tiwai Point aluminium smelter will close in August next year must cast doubt on the viability of any new grid-connected South Island generation.
“The impact of the Tiwai closure on future electricity prices is significant and complex,” MainPower’s spokesperson tells Energy News.
“The Mt Cass Wind Farm project team is currently working with external industry experts to update the future electricity price path assumptions for this significant infrastructure project. This and other factors will potentially have a bearing on the timing of the build. Current workstreams, including early works, detailed design and environmental works are continuing.”
Credit: Steve Rotherham | Energy News | Aug 10 2020 | www.energynews.co.nz