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Genesis delays Huntly closure

NZN 27/04/2016 Sophie Boot and Pattrick Smellie

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022 after previously saying they would close in 2018.

It has struck a deal with other electricity generators who wanted to keep them as back-up.

The Auckland-based power company has signed a 'swaption' contract with Meridian Energy "and other market participants", according to a statement from Meridian chief executive Mark Binns.

Meridian only owns wind and hydro power stations and appears to have led the charge to pay to have the two 250 megawatt Huntly 'Rankine' units on standby for any periods of low inflows to hydro lakes.

The move will disappoint environmental campaigners seeking less fossil fuel use in the New Zealand electricity system, which is roughly 80 per cent renewable at present, with a target of 90 per cent renewable by 2025.

Energy Minister Simon Bridges said the move was a pragmatic and transitional measure, while the national grid operator Transpower also welcomed the decision.

"There were times in 2019 that we forecast a shortfall of energy, which could have been difficult to manage," said chief executive Alison Andrew. "In extreme cases (for example a dry year when the hydro lakes are very low), we could have experienced a situation where consumers would have been asked to conserve their power usage."

Genesis announced last year that it would close its two remaining 250 megawatt Rankine units at the ageing Huntly station unless there was a substantial change in market conditions.

It said on Thursday a number of factors, including recent changes to the market, indicated that a longer transition period than originally expected is required.

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