New wind farm a further step to low carbon future

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New wind farm a further step to low carbon future

27 March 2019 - Mercury has committed to the construction of the first 33 of 60 consented wind turbines at
Turitea near Palmerston North, representing a key milestone in New Zealand’s renewable energy
development.
Mercury’s Chief Executive, Fraser Whineray, says that current market conditions indicate that new renewable
energy capacity is required for New Zealand, and Mercury is pleased to step forward with a wind farm development
it has been working towards for 15 years.
The 119MW Turitea wind farm will generate 470GWh per annum on average, enough electricity to power 210,000
cars. When generation connects to the national grid at Linton, with commissioning expected to begin from late
2020, Turitea will be New Zealand’s third largest wind farm. It will be the first large-scale generation addition to
New Zealand’s capacity since 2014.
“The estimated $256 million project supports the opening up of a further $750 million investment opportunity in
wind energy development,” Mr Whineray said.
Transmission and other infrastructure from this project is scaled to support the development of the remaining 27
turbines at Turitea and on the Puketoi range to the east, where Mercury has consents to construct a 53-turbine
wind farm.
Turitea and Puketoi are regarded as preeminent among existing opportunities for wind farm development in New
Zealand due to a combination of high average wind speeds and proximity to the national grid.
Reaching this important milestone is part of a journey started 15 years ago when Mercury committed to a strategy
of adding wind generation to its portfolio of renewable generation assets, Mr Whineray said.
“With this announcement, Mercury has realised the ‘awesome foursome’ of renewables - hydro, geothermal, solar
and wind - that enhance our contribution to New Zealand’s green energy future,” Mr Whineray said.
“The Turitea wind farm will contribute to New Zealand’s sustainable, low emissions future, as well as to our
country’s energy freedom by making more renewable, kiwi-made electricity available for homes, businesses and
vehicles around the country.
“The development of renewable energy projects in provincial New Zealand also helps to support local economies
through more jobs and spending, Mr Whineray said. “And, when we break ground for this in a matter of months, it
further establishes the Manawatu as New Zealand’s hub for wind energy production. It’s one of the best locations in
the world.
“Mercury acknowledges and thanks local councils, landowners and iwi for their engagement through the process of
getting to this milestone, and we look forward to working with them and other stakeholders during the construction
activity to follow.”

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Mercury already generates around 6,800GWh of renewable electricity per annum, approximately 16% of New
Zealand’s total electricity generation, from its hydro and geothermal stations located in the central North Island,
close to areas of high demand and growth. It operates solar business Mercury Solar, and has a 60kWp solar array
at its Penrose R&D centre. Mercury also owns 19.99% of Tilt Renewables, which operates and develops wind
farms in New Zealand and Australia.

PROJECT DETAILS
Mercury has contracted with Vestas-New Zealand Wind Technology Limited, a local subsidiary of Vestas Wind
Systems A/S (the world’s largest wind turbine supplier), to construct and maintain the Turitea wind farm. This
arrangement consists of a full engineer, procure and construct (EPC) contract and a long-term service and
availability agreement. Mercury is contracting separately with Electrix Limited and Transpower for the design and
construction of the 220kV transmission line and grid connection to Linton. These transmission assets will cater for
generation growth at the site, and the future development of the nearby Puketoi wind farm.
On-site construction is planned to start around August 2019 and the overall cost for the project is estimated to be
$256 million. This will be funded from existing debt facilities.
Further details are provided in the accompanying presentation.

ENDS
For further information:
Media – Craig Dowling 0272 105 337
Investors – Tim Thompson 0275 173 470









ABOUT MERCURY NZ LIMITED
Mercury’s mission is energy freedom. Our purpose is to inspire New Zealanders to enjoy energy in more wonderful ways and
our goal is to be New Zealand’s leading energy brand. We focus on our customers, our people, our partners and our country;
maintain a long-term view of sustainability; and promote wonderful choices. Mercury is energy made wonderful.
Visit us at: www.mercury.co.nz

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PROJECT SPECIFICATIONS
CommissioningBeginning late 2020
EPC ContractorVestas
O&M Contractor / TermVestas / 25 years
Turbines33 x V112-3.6MW
Turbine Tip Height / Hub Height125m / 69m
Rotor Diameter112m
Total Capacity119MW
Net Capacity Factor~45%
P50 Yield470GWh p.a.
Capital Cost
1
$256m
Total Operating Cost
2
~$13/MWh
EBITDAFImpact
3
~$30m p.a.
1
NEW WIND FARM A FURTHER STEP TO LOW CARBON FUTURE
PROJECT SPECIFICATIONS
1
Excluding capitalised interest
2
Assuming CPI increase of 2% p.a. over 25 year term of O&M contract
3
Stand-alone operation assuming $75/MWh received for generation
>Mercury has committed to the construction of the first 33
of 60 consented wind turbines at Turitea
>Mercury has contracted with Vestas to construct and maintain
the wind farm
>Turitea (and nearby consented site, Puketoi) are
regarded as preeminent among existing opportunities for
wind development in New Zealand
>Transmission infrastructure will be overbuilt to provide for
further wind development at Turitea and Puketoi
>Turiteacomplements Mercury’s existing baseload
geothermal and flexible hydro assets
>All North Island located, close to major load centres
>Ability to utilise flexibility of Waikato Hydro Scheme to ‘firm’
intermittency of wind

WIND
470GWh
HYDRO
4,000GWh
GEOTHERMAL
2,800GWh
2
MILESTONE IN A LONG-TERM WIND JOURNEY
STRATEGY
“Mercury must participate in wind to materially take part in renewable
generation in the medium-term”
–FY2018 Results Presentation (Aug 2018)
>Wind is now the premier generation development technology in NZ
>High resource quality and technological improvement have driven improved
economics
>Mercury has confidence in the fundamentals of the market to invest
>NZ needs new renewable generation in the near-term to meet expected
demand growth and/or to replace aging thermal fleet
>NZ’s renewable electricity advantage can enable the shift to a low carbon
economy over the medium-term
>Investment decision consistent with Mercury’s signalled strategy to
pursue economic growth
>Acquisition of stake in Tilt Renewables is complementary, with a significant
portfolio of renewable options in Australia and NZ
INCREASE TO
7,270GWh
ANNUAL
GENERATION
19.99%
SHAREHOLDING
IN TILT