Yes, there is good news for a Covid-weary NZ – and it has started to flow from our energy companies

In the wake of  the  emotionally  draining sagas that  have   dominated  the  mainstream  media   for the past week or  so — -first  the  allegations of   bullying within  Parliament and  by parliamentarians, and then the  All Blacks’  triumph and turmoil  over the  coach’s future employment — can  any relief  be  found?

Is  any   good  news  looming  for  a  nation  battered  by the  Covid  pandemic  and  frustrated by a  government that  makes  grand  announcements   but  often  fails  to  deliver?

Well,  yes, there  is.

Point  of   Order   believes  we  don’t  have  to look  far. It  will  come  from  the  business  sector   which    has  been  beavering away, despite the pressures on staff from Covid  and  within  the  supply  chain  to  and  from overseas  markets.

Some  of  it   is  already  emerging as the  big electricity gentailer, Contact Energy, reported today.   Contact  did  its   bit  for the  country  by  limiting  price  increases in the  year to 1.2%, announcing   a  new renewable energy  project, and indicating  it will be negotiating with  Rio  Tinto  which  wants  to  keep the Tiwai Point aluminium  smelter open  beyond 2024.  (More  of  what Contact  CEO  Mike  Fuge had  to  say  below).

Contact  will  be  followed   tomorrow by Mercury,  which  should  be  presenting a  cheering  result for investors, not least its  51%  shareholder, the government.  Results   from Meridian  and  Genesis  will come  later  in the month.

The  big  dairy  co-op Fonterra  has  also  cast  a  ray  of  sunshine  with   affirmation that  its  earnings should be  towards  the  top  end  of  its  guidance  of  25  to 35c  per  share.  Last  year  it  reported  a profit of  $599m, down $60m   Its  farmer-shareholders  will be  looking  for  an improvement on that.

Meanwhile   Peter  Beck’s  Rocket Lab,  which had an operating  income  of  US102m in 2021,  has  had  a  spectacular  year, with a  successful  launch  from its  Mahia  site in  June. Rocket Lab has a number of projects in the pipeline, including a contract (for an as-yet-undisclosed sum) to design and build two Photon spacecraft that will go into orbit around Mars in 2024, after being carried to the red planet by a Nasa-provided rocket.

The mission’s aim is to shed light on how Mars lost its once-habitable atmosphere.

Rocket Lab is one of the more  visible units in  the tech  sector, which  some  authorities  believe is  becoming the   economy’s  powerhouse.  The sector is  now  employing  more than 100,000 Kiwis  and  generated $8.6Bn in export revenue last  year. It  has  grown  77% faster  than  the  general economy  since  2015.

Last  week  the  NZ  Herald  reported  the  sale  of the  Auckland-based  tech  firm Invenco to   US-based  Vontier  for  $127m.  Invenco was  formed in 2009 by Sir  Peter Maire and  Dave  Ritten, then CEO,   after  Maire  bought the Invenco portion of the  bankrupted Provenco  Cadmus eftpos business.

The  payment system company has  since  specialised in pay-at-the-pump systems for service stations, thousands  of  which have  been installed  on service  station forecourts  in the US as well as  in NZ.

Sir Peter  has a  history  of  founding  tech  firms, selling them,  and  reinvesting  the profits  in NZ startups. An  earlier sale  was  of  Navman, a  pioneering  maker  of  in-car GPS systems, which  was  sold  to  a  US  firm  in 2007 for  $US104m,  and then  Fusion Electronics, a   maker  of  audio  systems   for  boats, cars  and  campervans for around $20m,  to  another  US  company Garmin. In  between times  he   put  money  into NZX-listed  Rakon,  which  is  now  a  big  earner.

Returning  to   Contact  Energy,  its  CEO, Mike  Fuge,  spoke  of the company’s strong progress in the  past  year on delivery of the Contact26 strategy, which is focussed on leading New Zealand’s decarbonisation by connecting customers with its renewable development pipeline.

Fuge also announced a   $300m investment  to develop a new 51.4MW geothermal power station at Te Huka, near Taupō, targeting onstream in Q4 2024.

There has  been good progress on the 168MW  Tauhara geothermal power station development, which will supply around 3.5%  of New Zealand’s total electricity demand by the end of next year.

Fuge  reports a  growing development pipeline  through securing land access rights to support the development of wind projects  with the Roaring40s partnership and entering a joint-venture agreement with Lightsource bp to initially develop up to 200MW of solar.

There  is  a strategic review of thermal assets supporting the announcement of the closure of Te Rapa next year, on track to more than halve  FY21 scope 1 and 2 carbon emissions by 2026.

Looking ahead to the next year, Fuge said Contact remains committed to leading the decarbonisation of New Zealand.

“We are excited about the future. We have a clear strategy, strong balance sheet with supportive shareholders and a host of opportunities in front of us to lead the decarbonisation of the New Zealand economy over the next decade.”

This  summary  illustrates  how  elements  of  NZ’s  energy industry is  adapting  to the   exigencies of  climate  change.

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