Investor Presentation Addendum – NZAS Discussion

MARKET RELEASE
Date: 8 November 2019
NZX: GNE / ASX: GNE
Investor Roadshow Presentation Addendum – New Zealand Aluminium Smelter Discussion

Genesis Energy (Genesis) has noted a high level of interest from investors, during its November
roadshow, regarding the recently announced strategic review, to be undertaken by New Zealand
Aluminium Smelter (NZAS). In the interest of transparency Genesis provides an addendum to its earlier
released investor roadshow presentation, outlining what it sees as the key discussion points relating
to the NZAS review.

Please see the attached for an addendum to the current investor roadshow material, to allow for NZAS
discussion, which will also be available on Genesis’ Investor Centre web page at
https://www.genesisenergy.co.nz/investors.

ENDS

For media enquiries, please contact:
Emma-Kate Greer
Group Manager Corporate Relations
Genesis Energy
M: 027 655 4499

For investor relations enquiries, please contact:
Cameron Parker
Investor Relations Manager
Genesis Energy
P: 09 951 9311
M: 021 241 3150

About Genesis Energy
Genesis Energy (NZX: GNE, ASX: GNE) is a diversified New Zealand energy company. Genesis sells electricity,
reticulated natural gas and LPG through its retail brands of Genesis Energy and Energy Online and is New
Zealand’s largest energy retailer with approximately 500,000 customers. The Company generates electricity
from a diverse portfolio of thermal and renewable generation assets located in different parts of the country.
Genesis also has a 46% interest in the Kupe Joint Venture, which owns the Kupe Oil and Gas Field offshore of
Taranaki, New Zealand. Genesis had revenue of $NZ2.7 billion during the 12 months ended 30 June 2019. More
information can be found at www.genesisenergy.co.nz

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Addendum to Investor Roadshow
Presentation: NZAS Closure Discussion
November 2019

New Zealand Aluminium Smelter (NZAS) has announced strategic review
13% of national energy demand –impact of downsizing or closure will impact New Zealand energy market
The smelter has been a significant part of New Zealand’s electricity demand
since it commenced operation in 1971.
When it restarted a 4
th
potlinein December 2018, its consumption grew to
13% of New Zealand’s national electricity consumption.
In October 2019, a Strategic review was initiated to determine the ongoing
viability of the operation.
Key points relevant to the review:
•Outcome to be announced by the end of Q1 2020.
•12 month notice period for termination of Meridian’s electricity supply
contract
•c. $260m in closure costs
Genesis Energy Limited Investor Roadshow November 2019 2.

New Zealand
Aluminium Smelter
Significant share of
lower South Island load
051015
Upper
North Island
Central
North Island
Lower
North Island
Upper
South Island
Lower
South Island
Genesis Energy Limited Investor Roadshow November 2019 3.
Transmission is a
challenge for
energy moving
north to displace
other generation
NZAS
0510
UPPER
NORTH ISLAND
CENTRAL
NORTH ISLAND
LOWER
NORTH ISLAND
UPPER
SOUTH ISLAND
LOWER
SOUTH ISLAND
NEW ZEALAND ELECTRICITY DEMAND (TWH)
Significant investment in transmission assets is
required to enable transmission of South Island
generation into the North Island. Transpower
indicate up to $600m and a 5 –8 year time
frame to undertake the required upgrade work.
DemandGeneration
Closure would release significant energy into lower South Island
Transmission constraints will limit energy travelling north to load centres where it could displace existing thermal
Auckland Demand
Huntly Power Station
(Genesis, 948 MW)
Electrification of industrial heat, displacing
existing coal use in the South Island may
present as an attractive alternative to
investment in transmission to enable greater
supply to the North Island, from a government
policy perspective.
Energy constrained in Lower South Island will
have most significant impacts on prices and
generator revenue in the South Island.
Impacts on North Island generation and retail
segments will be muted until transmission
challenges are resolved.

01,0002,0003,0004,0005,0006,0007,000
South
Island
North
Island
Renewable GenerationDescretionary Thermal
South Island
North Island
Demand
Genesis Energy Limited Investor Roadshow November 2019 4.
GENESIS PORTFOLIO BY ISLAND (GWH*)
Impact of NZAS exit on Genesis is expected to be limited
New Zealand
Aluminium
Smelter, ~ 5 TWh
Auckland
Demand
948 MW
138 MW
362 MW
190 MW
Genesis
generation
sites
8 MW
Other
major
South
Island
generation
Manapouri
850 MW
Clutha
750 MW
Waitaki
1,550 MW
Geographical
diversity of
assets has
benefits
*average of FY18 and FY19
Genesis’ North Island generation and customers are insulated
from the impacts of electricity constrained in the South Island.
Excess South Island electricity is likely to lead to increased spill
from hydro lakes and South Island wholesale power prices
could drop significantly.
Competition for retail margins may intensify while wholesale
prices are low but contract terms, customer inertia and
expectation of prices returning to natural equilibrium will
dampen impacts
Net short generation position in South Island benefits from lower prices whilst a flexible portfolio in the north
provides opportunities to adjust in response to market changes
Retail market
base is the
shock
absorber

Genesis Energy Limited Investor Roadshow November 2019 5.
Transmission upgrades will be required
If Tiwaicloses these upgrades take 5 to 8 years and the $600m cost means it may not be the best option for the
consumer
Deutsche Bank –Grant Swanepoel
Electricity Price Comparison (2000-2016)
WholesaleRetail
Retail is a shock absorber
•Wholesale price is only ~35% of
customers bill
•Retail prices respond slowly
•Genesis Energy retail market share is
approx. 24% of New Zealand
Transmission upgrades needed

Analyst views & research
The following analysts have issued recent independent research on the NZAS strategic review
Genesis Energy Limited Investor Roadshow November 2019 6.
Jarden / Credit Suisse: Nevill Gluyas, Nevill.Gluyas@jarden.co.nz
Enerlytica: John Kidd, john.kidd@enerlytica.co.nz
Forsyth Barr: Andrew Harvey-Green, andrew.harvey-green@forsythbarr.co.nz
UBS: Aaron Ibbotson, aaron.ibbotson@ubs.com
Craigs/ Deutsche Bank: Grant Swanepoel, Grant.Swanepoel@craigsip.com