New Zealand’s Genesis Energy is investing $1.1 billion in renewable expansion, aiming to achieve a 95 per cent renewable generation goal by 2035.
Genesis Energy, New Zealand’s third-largest power generator, has introduced Gen35, a $1.1 billion initiative focusing on expanding renewable energy.
This investment, funded by profits from the Kupe gas field, prioritises solar, grid-scale battery storage, and wind projects. The goal is to elevate the renewable portfolio from the current 3200 GWh to around 8300 GWh, aligning with New Zealand’s target of 95 per cent renewable generation by 2035.
According to Genesis CEO Malcolm Johns, the company’s strategy involves forming partnerships with customers to accelerate the transition to electric power, optimising existing energy sources, fostering the development of more renewables, and investing in large-scale firming and flexible generation.
Johns underscored the pivotal role of assets such as the Huntly Power Station, hydro assets, and upcoming solar and wind projects in the company’s supply-side plans.
“On the demand side, we will be focused on partnering with our customers to accelerate electrifying how they live, work and move. On the supply side, this includes optimising existing generation assets to take them deeper into the transition, developing more renewables, and investing in grid-scale firming and flexible generation,” he said.
The transition also involves a strategic shift toward biomass replacing coal, presenting potential economic opportunities and job creation. Genesis Energy is actively engaged in a staged development, aiming to establish up to 400MW (800MWh) of battery capacity. Additionally, there are explorations into adapting Unit 5 for hydrogen generation and fast-start peaking.
Genesis is transitioning from exclusive off-take agreements to a diversified portfolio of development options, encompassing power purchase agreements (PPAs), joint ventures (JVs) with PPAs, and the construction of generation and storage assets on its balance sheet.
Initial steps involve securing four solar sites totalling around 450MW and significant investments in large-scale batteries. There is also the prospect of developing offshore wind projects from the Kupe field.
According to the company, Gen35 is expected to drive earnings growth, with EBITDAF projected to reach approximately $500 million in FY25 and in the mid-high $500 millions between FY26 and FY28.
The board has adjusted the dividend policy to allocate free cash flow from Kupe to renewables development, guiding total FY24 dividends at 14.0 cents per share.