Mercury Investor Day 2023

Mercury Investor Day 2023
15 March 2023 –
Mercury is hosting its Investor Day 2023 in Palmerston North today, which includes presentations
from the Executive Management Team and other senior managers of the company focusing on:
 Generation asset management;
 Energy transition and climate;
 Future ready retail and integration; and
 Mercury’s portfolio and generation development.
The presentation materials from the Investor Day are attached. A video of the day will be loaded to
https://www.mercury.co.nz/investors/results-reports/presentations after the event.

ENDS
Howard Thomas
General Counsel and Company Secretary
Mercury NZ Limited

For investor relations queries, please contact:
William Meek
Chief Financial Officer
0275 173 470
investor@mercury.co.nz
For media queries, please contact:
Shannon Goldstone
Head of Communications
027 210 5337
media@mercury.co.nz



ABOUT MERCURY NZ LIMITED
We generate electricity from 100% renewable sources – hydro, geothermal and wind. We also sell utility services to our
customers through our retail brands – Mercury, Trustpower and GLOBUG.
We’re listed on the New Zealand Stock Exchange and the Australian Stock Exchange with foreign exempt listed status with the
ticker symbol ‘MCY’. The New Zealand Government holds a legislated 51% shareholding in the Company. Visit us at:
www.mercury.co.nz


STOCK EXCHANGE LISTINGS: NEW ZEALAND (MCY) / AUSTRALIA (MCY)

NEWS RELEASE

---

Mercury Investor Day
Palmerston North – 15 March 2023

RETROSPECTIVE FROM 2019 MERCURY INVESTOR DAY –THE MARKET
> Industrial load reductions weighing on New
Zealand demand growth; green shoots
appearing (new data centres under
construction, energy conversion to
renewables).
> Spot prices volatile reflecting higher thermal
fuel costs and hydro conditions.
> Electricity futures prices reflect higher
thermal running costs (fuel and carbon).
> Commercial & Industrial energy yields lifting
when contracts mature in-line with forward
curve. Contract maturities lengthening.
Longer term PPAs more common.
> Retail churn lower reflecting tight market
conditions and a focus on loyalty.
> Retail yields lifting but lower than inflation.
Customer care a key focus.
Graphic from 2019 Investor Day presentation

RETROSPECTIVE FROM 2019 MERCURY INVESTOR DAY –WIND OPPORTUNITY?
> The 2019 opportunity in wind prophetic?
> Tilt Renewables transaction in 2021
culminates in Mercury acquiring Tilt’s New
Zealand operations. Tararua 1, 2 and 3,
Mahinerangi and Waipipi wind farms
bought.
> Turitea North complete, Turitea South
commissioning in April 2023.
> Kaiwera Downs stage 1 under
construction, expected to be operational in
October 2023 lifting Mercury’s annualised
wind production to 2,100GWh.
> Progressing Kaiwaikawe, Kaiwera Downs
stage 2 and Puketoi wind farms (consents
extended) through detailed investigations,
constructability to business case within 6-
18 months.
Graphic from 2019 Investor Day presentation

RETROSPECTIVE FROM 2019 MERCURY INVESTOR DAY –EXCELLENCE
> A focus on operational excellence evolves
into the Thrive programme, delivering
$47m in FY22 against an improvement
target of $30m. We are working to make
‘thriving’ an ongoing mindset and move
towards a more adaptive operating model
and adopting new ways of working.
> Mercury acquires the Trustpower mass
market retail business in May 2022.
Integration of retail businesses well
advanced. Synergies of $35m targeted
following integration.
Graphic from 2019 Investor Day presentation

The energy transition
> The global energy crisis has resulted in high prices and reactive policy changes.
> Security of supply has been tested, and governments have stepped in to
maintain affordability as energy bills peak.
The digital transformation
> We are in the midst of a rapid digitalisation of society. We have seenadvances
in artificialintelligence and automation and exponential growth in the number IoT
devices and data use.
The future of work
> The workforce is changing – the population is aging, there is a growing number of
employees working remotely, diversity is increasing, and turnover has jumped
post-covid.
> As artificial intelligence and automation are more readily adopted, the type of
work that people do will also change.
U.S. annual
voluntary
turnover
expectedto be
20% higher
than pre-covid
£1042
Aug 2020
£3549
Oct 2022
Estimated
25 billion IoT
devices
generating
80ZBof data
by 2025
Annual UK energy bill
for an ‘average’
household
Emerging from COVID disruptions – ‘the energy crisis’, digitalisation and workforce changes create a dynamic environment
THREE KEY GLOBAL TRANSITIONS IMPACTING MERCURY

HOW THE GLOBAL TRANSITIONS SHOW UP IN NEW ZEALAND
Workers will need to be adaptive, resilient, and open to change and continual learning.
The transitions are showing up in regulatory changes, often with interconnections that require careful management
Telco sector changes
Retail Service Quality work
programme
Fibre pricing regulation
Increase in IoT
Electricity sector changes
Market transition
System resilience
Flexibility market
NZ Battery Project
Transmission & grid pricing
methodologies
Renewable energy zones
Low carbon transition
Emissions Reduction Plan &
carbon budgets
Government Energy Strategy
Gas Transition Plan
Emissions trading scheme reviews
Transport policies
Funding for industrial conversions
Resource
management
reform
= impacts electricity demand
= impacts both electricity demand and renewable generation
= impacts renewable generation
= impacts telco

FY23 GUIDANCE BRIDGE
> Additional ~400GWh generation volume since October 2022, mostly attributable to hydro generation (circa
$45m).
> Reduction in actual and forward prices impacts on long generation (circa $15m).
> Increased hydro generation and lower prices results in a mismatch between the forecast GWAP of covered
generation, and FPVV purchases and derivative settlements (circa $20m).
500
550
600
650
700
750
800
850
Guidance issued 21-Oct
Generation volume
increase
Price impact on long
generation
Price impact on covered
generation
Price impact on FPVV
purchases and derivatives
Retail integration Opex
acceleration
FY23 guidance
$m

FY23 HYDRO GENERATION REVENUE
> Lower FY23 hydro GWAP forecast (~$28/MWh) driven by combination of:
• decrease in actual / forecast prices relative to what was forecast in October
• additional hydro generation during lower priced periods
-30
0
30
60
90
120
150
180
-50
0
50
100
150
200
250
300
Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23Apr-23May-23Jun-23
GWh
$/MWh
Change in hydro volume forecast (RHS)Oct-22 Forecast Hydro GWAPFeb-23 Forecast Hydro GWAP

Generation
Asset Management
STEW HAMILTON
General Manager Generation
15 March 2023
MATT KEDIAN
Head of Operations - Generation

GENERATION – OUR APPROACH
BETTER
TOGETHER
PROTECT & ENHANCE
VALUE
OPTIMISE
PERFORMANCE
MANAGE
RISK
Leveraging location and
diversity to manage risk and
grow performance
Investment programme to
sustain long-term
performance
Incremental improvements &
long term plan
Understand risk and develop
resilience of assets
PROVIDING RESILIENT ENERGY GENERATION & ENERGY CAPACITY

GENERATION – AN EXPERIENCED AND CAPABLE TEAM
Strategy and
Performance
Emily Collis
Projects
Robert Rankin
Operations
Matt Kedian
Asset Management,
Risk & Engineering
John Tatkovic
GM Generation
Stewart Hamilton
64015096
PROVIDING RESILIENT ENERGY GENERATION & ENERGY CAPACITY

BETTER
TOGETHER
Leveraging location and
diversity to manage risk
and grow performance
GENERATION - THRIVING TODAY, SHAPING TOMORROW
PROVIDING RESILIENT ENERGY GENERATION & ENERGY CAPACITY

Safety Culture
> Safety 2.0 - “learning from” incidents – not just preventing.
Critical Risk Management
> Focus on the risks that can lead to fatality e.g. driving, height,
electrical, dropped objects.
Process Safety team
> WorkSafe prosecution from July 2021 Rotokawa loss of
containment of steam.
> Process Safety team formed with seven engineers (many from
oil and gas) to lift approach and risk management.
HEALTH, SAFETY AND WELLBEING CULTURE
BETTER
TOGETHER

PROTECT &
ENHANCE VALUE
Investment programme
to sustain long term
performance
GENERATION - THRIVING TODAY, SHAPING TOMORROW
PROVIDING RESILIENT ENERGY GENERATION & ENERGY CAPACITY

PROTECT &
ENHANCE VALUE
MAINTAIN AND ENHANCE HYDRO STATION CAPACITY
FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22FY23FY24FY25FY26FY27FY28FY29FY30FY31FY32FY33FY34FY35FY36FY37FY38
Station
Age
Capacity
Generation
Upgrade
ScopeCost
Aratiatia
(3 Units)
Complete
RehabLead In
Turbines
2
55
1 Unit sized
for Flow
28MW,
2 x 30MW
~15GWh
p.a
All Generators,
Governors, 1 x
turbine.
2 x Turbine Refurb
$49m
Ohakuri
(4 Units)
planning
RehabLead InGenerators58
+1-2MW
Per Unit
~25GWh
p.a
All Generators~$40m
Atiamuri
(4 Units)
Planning
Lead InRehab61
+1-4MW
Per Unit
tbc
All Turbines,
Generators,
Governors
~$90m
Whakamaru
(4 Units)
Complete
Rehab63
+6MW
Per Unit
4 x 31MW
~28GWh
p.a
All Turbines,
Generators,
Governors
$76m
Maraetai 1
(5 Units)Lead InRehab68
+5-8MW
Per Unit
~32GWh
p.a*
All Turbines,
Generators,
Governors
~$140m
Maraetai 2
(5 Units)Lead InRehab
Waipapa
(3 Units)Lead InRehab
Arapuni
(8 Units)
Generators
5-8
Karapiro
(3 Units)
Underway
Class
4
Lead InRehab72
+5MW
Per Unit
3 x 37MW
~32GWh
p.a
All Turbines,
Generators,
Governors
~$80m

Karāpiro rehabilitation project is an $80m investment in the power station
originally commissioned in 1946. The project includes replacement for all three
generating units including generators, turbines and governors.
The project protects value by extending asset life by 50 years and enhances
value by providing an additional 5MW per unit, increasing capacity from 96MW
to 112.5MW (32GWh/year).
The main generating unit scope is being delivered by Andritz Hydro. The project
includes replacement of intake gates.
PROTECT &
ENHANCE VALUE
KARĀPIRO UPDATE
First Unit
Completion
May 2023
SecondUnit
Site Works
Aug ’23 – April ’24
Third Unit
Site Works
Aug ’24 – April ’25
Timeline for implementation:
New TurbineInstallation

Commencing eight “make up” wells and one well repair in drilling
campaign FY23-FY25.
The campaign will see an investment of $128m
1
and is due to commence
in March 2023 and be completed in late 2024.
Field WellFY23-FY25FY26-FY30
3
Kawerau
Production 21
Injection 11
NgāTamariki
2
Production 10
Injection 10
Rotokawa Joint Venture
(Mercury / TN2T gross)
Production 31
Injection 01
Total 84
1
typical standard deep well project cost is ~$14m, inclusive of well pad preparation, construction and pipeline installation
2
supports OEC5 upgrade l
3
Historic average drilling rate 2014-2020 is 1.2 wells/year. Forward projection drilling rate circa 1.3 wells/year.
PROTECT &
ENHANCE VALUE
GEOTHERMAL FUEL SUPPLY SECURED FOR
THE LONG TERM

PROTECT &
ENHANCE VALUE
$0M
$20M
$40M
$60M
$80M
$100M
$120M
$140M
$160M
2017201820192020202120222023f2024f
Hydro - OtherHydro - Major RehabilitationsGeo - PlantGeo - Steamfield
SIB CAPEX REFLECTS HYDRO RE-INVESTMENT AND GEOTHERMAL
DRILLING ACTIVITIES
> Varies year-on-year due to geothermal drilling and hydro re-investment activities
> Wind SIB CAPEX minimal as almost always OPEX

PROTECT &
ENHANCE VALUE
OPEX REFLECTS ACTIVITIES TO IMPROVE ASSET RESILIENCE
> Growth reflects foundational work to improve asset resilience plus supporting growth in generating assets across
wind and geothermal.
-
20
40
60
80
100
120
140
201920202021202220232024f
Generation Opex by Fuel Type
SupportHydroGeoWind
Opex ($M)

>Developing a project to enhance the value of the Ngā Tamariki Power Station by ~37MW (314GWh/year) by adding a
fifth generating unit (OEC5), increasing total station capacity to ~123MW (net).
> Currently progressing negotiation of main contracts, final feasibility and resource consenting prior to final investment
decision.
> The conceptual design is complete, the team is clarifying technical requirements and progressing preliminary design
with Ormat (EPC Contractor) to de-risk the project and obtain firm final contract prices.
PROTECT &
ENHANCE VALUE
NGĀ TAMARIKI OEC5 – INCREASING GEOTHERMAL CAPACITY

GENERATION - THRIVING TODAY, SHAPING TOMORROW
OPTIMISE
PERFORMANCE
Incremental
improvements and long
term plan
PROVIDING RESILIENT ENERGY GENERATION & ENERGY CAPACITY

OPTIMISE
PERFORMANCE
>Hydro Production Volumes have increased in FY23 after stable and relatively
lowinflows in the previous three years.
>Optimisation Team formed to support continued works to maximise the value of
our generating assets in the short and long term.
>Examples of Thrive improvements recently achieved:
• Maraetai power station low tailwater operation restriction removal – enables
longer periods of on peakgeneration without spill = GWAP uplift.Annual
benefit (ongoing) ~ $450k.
• Waipapa power station output and flow increase, particularly at low
headwater levels – 2.5MW increaseplus 20cumec flow increase = GWAP
uplift, reduced spill.Annual benefit ~ $300k.
• Hydro multiple frequency keeping (ancillary service) functionality increase,
water value loss reduction,maintenance legacy reduction.
0
100
200
300
400
500
600
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
GWh
Hydro Portfolio Production
(3years)
70
75
80
85
90
95
100
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
Availability
(%)
Hydro Availability
(3 years)
HYDRO PERFORMANCE

>Geothermal production volumes continue to be stable, FY20 = 3,777GWh,
FY21 = 3,757GWh andFY22 3,715GWh.
>Optimisation Team also maximising value of our geothermal assets.
>Examples of Thrive workstreams include:
• Improving management of non-condensable gas accumulation in Mokai OEC
units (OEC31) ($100k).
• Reducing inlet pressure on Mokai STG10, ($1m @ 100% equity).
• Removal of a restriction in the NAP reinjection system, improving output
($200k @ 100% equity).
• Assessment of the motive fuel selection for NTM OEC05 which could raise
capacity by 1.4MW($2m).
• Control system optimisation atNTM improving performance ($1m).
0
50
100
150
200
250
300
350
400
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
GWh
Geo Production
(3years)
70
75
80
85
90
95
100
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
Availability (%)
Geo Availability
(3 years)
OPTIMISE
PERFORMANCE
GEOTHERMAL PERFORMANCE

> Wind portfolio FY22 production of 1,330GWh
• Ex-Tilt assets availability improved to 94.0% (+3.44% on FY21)
• Turitea North completion first year in operation - achieved availability
of 96% (+1.5% on target).
> Wind portfolio FY23 YTD production of 889GWh
• Wind portfolio FY23 YTD availability of 94.3% (+1% on same period
FY22).
• Below target of 985GWh and -2% on same period FY22.
• Wind resource FY23 YTD below forecast (wind speed -5% on
forecast and -1% on same period FY22).
> Opportunities
• Availability improvement in FY23 for Turitea as second year of
operation begins (+2.0% target on FY22).
• Availability improvement in FY23 for Tararua 3 with full site availability
(+0.5% YTD on same period FY22).
• Asset life extension for Tararua 1&2 turbines.
• Kaiwera Downs in full production during FY24 (annualised 147GWh).
• Turitea full site production from end of FY23 (853GWh).
80%
82%
84%
86%
88%
90%
92%
94%
96%
98%
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
Availability %
Date
Wind Portfolio Availability
(3 year)
20
40
60
80
100
120
140
160
180
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
GWh
Date
Wind Portfolio Production
(3 year)
OPTIMISE
PERFORMANCE
WIND PERFORMANCE

GENERATION - THRIVING TODAY, SHAPING TOMORROW
MANAGE
RISK
Understand risk and
develop resilience of
assets
PROVIDING RESILIENT ENERGY GENERATION & ENERGY CAPACITY

Existing 113.7MW Steam Path and Generator were damaged in 2021 and the full
refurbishment is set to be completed in FY23.
The replacement equipment is supplied by Sumitomo Corporation
andmanufactured by Fuji Electric in Kawasaki Japan.
The equipment is in final stages of testing, packaging and is due for shipment to
New Zealand in March 2023.
The replacement of the existing Steam Path and Generator will be completed
between late April and the end of June 2023.
The $36m project protects the value of generation of the Kawerau power station
(net output 106MW).
Final insurance payment expected in FY24.
KAWERAU RECOVERY
MANAGE
RISK

MANAGE
RISK
ASSET MANAGEMENT – A CONTINUOUS APPROACH & CORE STRENGTH
TheassetmanagementframeworkadoptedbyMercuryisdesignedto
enhance,focusandacceleratedeliveryof strategicobjectives,asfollows:
1.MaximisingAssetPerformancethroughprocessoptimisation
2.MinimisingCostofownershipthroughcontinuousimprovement
3.ManagingAssetintegrityandcriticalriskoverthelongterm
Criticalriskmanagementis a keypillar. Wholeoflifeplanningsupportedby
assetcondition-criticalityassessmentsattheindividualassetlevelallowsfor
bespokeassetstrategiestobedevelopedandadjustedovertime. Thishelps
usprotectvalueandminimiseriskwhilesupportingstrategicandsustaining
investmentdecisionsoverthelifeof ourassets.
Ourrisk-basedapproachtoassetmanagementfocussesre-investment
ontheassetsthatmattermost.
Takingacondition-criticalityapproachtoassetriskallowsusto
efficientlymonitorassetlifecyclerisksacrossourlargeassetportfolio.
Conditionmonitoringprogramsallowourengineerstoassessassets
throughoutthelifecycleandadjustassetstrategiesagainstdefined
performancestandards

FY22 Generation
Availability 94%
MANAGE
RISK
EFFECTIVE MANAGEMENT SYSTEMS FOR BELOW GROUND ASSETS

> Nine dam structures on the Waikato Hydro system aged 60-97 years.
>Including Taupō control gates.
> Contains and regulates flow from the reservoir on the River.
> Dam Safety guidelines (NZSOLD) are becoming regulations.
> Mercury team set up to measure, assess and manage risks associated with
dam structures.
INVESTMENT IN DAM SAFETY and RISK MANAGEMENT
MANAGE
RISK

GENERATION – OUR APPROACH
BETTER
TOGETHER
PROTECT & ENHANCE
VALUE
OPTIMISE
PERFORMANCE
MANAGE
RISK
Leveraging location and
diversity to manage risk and
grow performance
Investment programme to
sustain long term
performance
Incremental improvements
and long term plan
Understand risk and develop
resilience of assets
PROVIDING RESILIENT ENERGY GENERATION & ENERGY CAPACITY

Energy Transition
and Climate
LUCIE DRUMMOND
General Manager Sustainability

TAKING A WHOLE OF SECTOR APPROACH TO THE ENERGY
TRANSITION
The BCG report ‘The Future is Electric’ sets out how the
electricity sector can contribute to these decarbonisation
actions by navigating four key challenges:
Develop new renewable generation at pace
> Industry project pipeline of 10.9GW will meet forecast
requirement of 4.8GW by 2030.
> Imperative that updates to NPS REG and the new resource
consent framework support pace of development.
Manage reliability during peak demand
> More battery storage and fast start peakers (including
gas)required to provide supply side flexibility.
> Market to evolve to encourage right energy and capacity
mix.
Working with others to ensure the pace of change supports the transition
Source: Concept Consulting modelling; BCG analysis; Transpower(BCG The Future is Electric
– November 2022)
Sector pipeline of renewables well placed to meet 2030 demand.

Managing dry year energy supply risk
> Preferred pathway in the report has a mix of more
renewables (wind and solar already in pipeline), gas
generation (200MW OCGT) and larger-scale demand
response.
Investment in transmission and distribution
> Significant investment required in transmission and
distribution. Investment for resilience likely to emerge
post-cyclone Gabrielle.
> Regulatory changes needed tosupport network
investmentrequired to support a smartenergy system
and build resilience.
> Momentum for sector collective work continues –
companies across the sector have been working on a
sector commitment to deliver a low carbon energy
system.
Key transition challenges need to be navigated to ensure outcomes for end users
TAKING A WHOLE OF SECTOR APPROACH TO THE ENERGY
TRANSITION

REDUCING OUR CLIMATE IMPACT AND ADAPTING TO CHANGE
Promoting the role of
renewable energy
Collaborating with
stakeholders
Positioning ourselves for
climate-related
opportunities
Seeking to reduce our own
climate change impacts
Building knowledge of
climate change
Playing our part
Playing a leading role
Action plan to reduce our
emissions – with measures
and targets
Ramping up for New Zealand
Climate Standard in FY24
The electricity sector can support 70% of New Zealand’s emissions
reductions required to achieve net zero by 2050
1
Our current climate strategy
Mercury have reduced our
Scope 1 emissions by ~60%
since 2015
and ranks at ~40
th
in terms
of emissions for NZ
organisations covered by
the ETS
Five years of climate-related
disclosures
Through continued investment in renewable generation, our
emissions intensity has gone from ~70kg CO2/MWh in 2015 to
~30kg CO2/MWh in 2022 vs grid average of ~100kg CO2/MWh
Progress
so far
What’s
next for
FY23
Positioning for opportunities and building knowledge to support preparedness
1. BCG report ‘The Future is Electric’ page 9

0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
KAGNAPNTMRKAMOK
tCO2e
GEOTHERMAL EMISSIONS
FY2018FY2019FY2020FY2021FY2022
PLAYING OUR PART – REDUCING OUR EMISSIONS
> Fugitive geothermal emissions make up ~98% of Mercury’s Scope 1
emissions and ~68% of our overall GHG footprint
1
.
> Mercury is actively developing technology and trialling methods to
reducethese emissions and is working with others in the sector.
>The trial at NgāTamariki started November 2021 and has reinjected
over 8k tonnes CO
2
-e (~25% of total station emissions/year) with no
adverse effects identified.
> Still in testing and development. The next steps are:
• expansion of the existing binary plant system – continuing to
understand performance and impact on reservoir.
• starting research and development aimed at understanding a
solution for flash plant emissions, specifically for the Kawerau
Power Station.
Inject NCGs here, at
northern reinjection line
Capture
NCGs
here,
upstream
of gas vent
1
Based on FY21 GHG inventory
Continuing to invest in research and development of technology that could support geothermal emissions reduction

CONTINUOUS IMPROVEMENT OF OUR CLIMATE DISCLOSURES
> Starting in 2018 has enabled a staged approach to
improving our climate disclosures.
> In FY23 we will adopt as much of the new New
Zealand Climate Standard as possible, ahead of our
FY24 obligation.
> This year we are:
• introducing a third climate scenario to assist with
our identification of risks and opportunities.
• focussing on addressing any disclosure gaps.
• refining our approach to disclosing ‘material risks’.
> We continue to build knowledge on predicted climate
impacts specific to our business and are working with
others across the sector to create energy sector
scenarios that can help with understanding system
risks.
Leveraging what we have learnt through voluntary disclosure as we move into the New Zealand Climate Standard

TAKING A COLLABORATIVE APPROACH TO IMPROVE RESILIENCE
> Waikato Catchment Ecological
Enhancement Trust
> Taskforce of Nature-based
Financial Disclosures
Working with others on our social and environmental impact – diverse perspectives, increased capacity, aligned goals
Meaningful
and enduring
support for
customers
experiencing
hardship
Working in
effective teams
with our key
suppliers
Evolving how
we restore
natural
resources
> Programme approach to
customer care
> Addressing the digital divide
> Gathering more information to
understand supply chain
impacts, e.g. modern slavery
> Focussing on building culture
with key contractors
Iwi
relationships
> Updating our approach based
on feedback received from iwi
partners

Portfolio, Energy Transition
and Generation Development
PHIL GIBSONTIM THOMPSON
General Manager PortfolioHead of Wholesale Markets

ADVANTAGED PORTFOLIO WELL POSITIONED FOR THE TRANSITION
100% renewable generation
> Three low-cost complementary fuel sources in baseload
geothermal, intermittent wind with flexible hydro capable of
firming and peaking
Superior asset location
> North Island generation located near major load centres;
rain-fed hydro catchment inflows aligned with winter peak
demand
Substantial peaking capacity
> The Waikato hydro system is the largest group of peaking
stations in the NorthIsland able to firm intermittent
renewables
Experienced trading & risk management
> 50+ years of senior management experience in wholesale
markets, risk management and trading
MEAN ANNUAL
GENERATION
~8,250GWh
WIND*
~1,570GWh
HYDRO
~4,080GWh
GEOTHERMAL
~2,600GWh
80%
85%
90%
95%
100%
105%
110%
115%
120%
FY22FY21FY20FY19FY18
GWAP / TWAP
1
WAIKATO HYDRO GWAP TO TWAP
1
VS. NATIONAL CATCHMENT RANGE
* Includes only operating assets (i.e. Turitea North only)
1
Generation Weighted Average Price (GWAP) vs. Time Weighted Average Price (TWAP) at OTA2201
Waikato
>WAIKATO HYDRO SCHEME CAPABLE OF
RAMPING FROM 0 TO FULL LOAD (>1000MW) IN
~5 MINUTES
>LARGEST NORTH ISLAND RESERVE PROVIDER
>FLEXIBILITY TO FIRM WIND IN CONSTRUCTION

ADVANTAGED PORTFOLIO WELL POSITIONED FOR THE TRANSITION
COMMERCIAL & INDUSTRIAL
RECONTRACTING
>Integrated portfolio, usuallynet long generation with movement
year-on-year due to hydrology, plant availability and values of sales
Call outs:
>We have optionsavailable to replace roll off of Manawa hedge
acquired with Trustpower acquisition
>The term of C&I sales is extending with ~320GWh of 10 year
contracts signed in the last 12 months
>PPAs associated with intermittent generation reducefirming
requirement
0
2,000
4,000
6,000
8,000
10,000
12,000
Generation (Long)Sales (Short)
GWh
WindGeothermalHydroManawa CFDWind PPAMass Market
FY2024 INDICATIVE NET POSITION BREAKDOWN
Commercial & Industrial
0
2,000
4,000
6,000
FY24FY25FY26FY29FY31
GWh
Contracted Pre-FY2023Contracted FY2023 To Date

ENERGY TRANSITION – OUR VIEW ON CHALLENGES & OPPORTUNITIES
Market transitioning from solely energyconstrained to energy AND
capacityconstrained
> Capacity currently met by flexible hydro and thermal plant
> Hydro is finite & reliable thermal capacity is being retired
Electricity demand must grow to meet our carbon targets
> Long-term growth is inevitable as electrification is New Zealand’s best
decarbonisation option
> Acknowledge demand growth has yet to materialise
Increased intermittency will lead to increased volatility
>“When the sun shines, the sun shines. When the wind blows, the wind
blows...”
> Correlated intermittent generation will lead to spot price volatility
BCG REPORT*: “Analysis of the existing
pipeline of flexible, supply-side resources
identifies that the current ambition of
participants may need to increase to
achieve peak demand by 2030”
*BCG Report –‘The Future is Electric’: [link]
Te UkuWaipipiTuriteaWest WindMahinerangi
Te Uku
100%34%17%2%13%
Waipipi
100%56%44%19%
Turitea
100%46%18%
West Wind
100%17%
Mahinerang
i
100%
CORRELATION OF WIND FARM GENERATION (CY2022)

ENERGY TRANSITION – MAINTAINING OUR COMPETITIVE ADVANTAGE
Mercury will maintain our advantage by having the best people and development pipeline to complement our
existing advantaged portfolio
Diversity is increasingly important
> Diversity of location and fuel will limit correlation
and aid in portfolio management and execution
Market capable of navigating the transition
> Minor modifications rather than wholesale
changes are required
Flexibility is increasingly valuable
> Flexible capacity solutions will be needed as the
market becomes increasingly constrained
> Thermal will be required as part of the transition
> We are technology agnostic
> We continue to incorporate market and portfolio
impacts in prospect assessment
> Mercury will advocate for timely and appropriate
modifications to market settings that ensure
market confidence is maintained
> Pursuing ‘flex’ options as a core feature of our
growth pipeline both on the supply and demand
side
> Mercury will play our part supporting thermal to
ensure security of supply through the transition

PROVEN CAPABILITY AND EXPERIENCE POSITIONING US WELL FOR GROWTH
Demonstrated market understanding and experience
> We have a proven track record of generation development across fuels
with integration into the wider portfolio
> We understand what good projects are and how to bring them to
market
Development and project management capability
> In-house development team with domestic and international
experience across wind, geothermal and solar
> Specialised expertise across the project lifecycle –from prospecting
to commissioning
Proven development partner
> Long-term commercial partnerships with Māori landowners and other
key stakeholders
> Established supplier relationships across geothermal and wind
GENERATION GROWTH POST 2008
Construction – ~2,800GWh*
Acquisition – ~1,100GWh
IN-HOUSE DEVELOPMENT TEAM
30+ pax with experience in wind, solar and
geothermal in the US, UK, Australia and NZ
GENERATION IN PARTNERSHIP
Nga Awa Purua Geothermal Power Station
(65%)
Mokai Geothermal Power Station (25%)
*Equity share and only operating assets

OUR TECHNOLOGY CHOICES –“ONE SIZE DOES NOT FIT ALL”
BuildPartnerAcquire
Energy
Wind

Open to M&A
Strong portfolio of options - strengthened through Tilt
acquisition
Solar

Opportunities to partner (e.g. access, supply-chain,
expertise, offtake) to bring large industry pipeline to market
Geothermal

Existing brownfield and greenfield options
Capacity
BESS
 
Opportunities to leverage existing portfolio and relationships
both on supply and demand side
DER / Flex
 
Our development approach is to leverage Mercury’s advantages and partner where there is value and learning

WE HAVE A LEADING PLATFORM FOR GROWTH
Kaiwaikawe
74MW, 220GWh
Mahinerangi II
138MW, 470GWh
Kaiwera Downs II
196MW, 700GWh
Puketoi
228MW,
1,040GWh
Ngā Tamariki OEC5 (geothermal)
37MW, 310GWh
Projects in
construction
Projects consented or
in consenting
Projects actively being
developed and
secured
WIND
146MW / 535GWh
GEOTHERMAL
37MW / 310GWh
WIND
~1,200MW / 4,100GWh
GEOTHERMAL
85MW / 740GWh
FLEX / CAPACITY
>100MW
WIND
636MW / 2,430GWh
146MW / 535GWh
1,275MW / 4,840GWh
673MW / 2,745GWh
Growing and diversified pipeline of >2,000MW and >8,000GWh
Equivalent in size to Mercury’s existing generation portfolio
Kaiwera Downs I
43MW, 150GWh
Turitea South
103MW, 370GWh
In Construction
Consented
In Consenting
PROJECTS UNDER CONSTRUCTION, CONSENTED
OR IN CONSENTING
> Flexibility to respond to changing market conditions with premium projects
secured, a pipeline of projects at various stages of readiness, and an ability
to scale up and accelerate through partnership.
~30%
OFFULL
PIPELINE
~70%
OFFULL
PIPELINE

Future Ready Retail &
Integration
CRAIG NEUSTROSKI
GM Commercial Operations
15 March 2023
FIONA SMITH
GM Customer Operations
NICK PUDNEY
Head of Integration

> We purchased Trustpower to
accelerate our retail strategy and
journey to become a Future Ready
organisation...
• New Zealand’s largest multi-utility
business
• Capability to deliver multiple
products and services
• Provides scale efficiency to
reinvest in technology
BECOME FUTURE
READY...
OUR JOURNEY TO FUTURE READY

MERCURY RETAIL
Stable/Modest growth in electricity
connections
> Our focus has been on bringing two businesses together while also maintaining momentum.
Retail integration programme
> Single Retail Leadership Team
> Optimised across brands
> Early synergies have been
delivered
> Electricity ICP churn at 16%(annualised).
> Customer churn at 11%(annualised).
Completed acquisition of NOW NZ
> 25K Broadband connections
> 70 employees
557,298
563,602
-
200,000
400,000
600,000
Combined ICPs
TPW
MCY

First Stop:
‘FIT FOR NOW’
> ‘Fit For Now’ is about creating a
common operating model...
That delivers:
• One brand
• Customers migrated onto a one
tech stack (Gentrack and
Salesforce at the core)
• One succeeding culture, supported
by adaptive ways of working
And enables:
• Decommissioning of duplicate
technologies
• Realising synergies
BECOME FUTURE
READY...
OUR JOURNEY TO FUTURE READY
> We purchased Trustpower to
accelerate our retail strategy and
journey to become a Future Ready
organisation...
• New Zealand’s largest multi-utility
business
• Capability to deliver multiple
products and services
• Provides scale efficiency to
reinvest in technology

DELIVERY OF SYNERGIES ON TRACK
> On track to realise forecast cost
synergies (Opex and Capex) over 3-year
period
$10m of synergies to be realisedin year 1 through:
> Corporate shared services
> Technology
> Core retail business activity
$35m
Additional synergies to be realisedthrough FY24-FY25 from:
> Shift to Common Operating Model
> Retirement of duplicate technologies
> Becoming Future Ready

First Stop:
‘FIT FOR NOW’
Next Stop:
ENABLING FUTURE
READY
> Fit For Now is the springboard to
focusing on EnablingFuture Ready
• Iterative investment into future-fit
technology platforms
• Automation and robotics
• One succeeding culture
BECOME FUTURE
READY...
OUR JOURNEY TO FUTURE READY
> ‘Fit For Now’ is about creating a
common operating model...
That delivers:
• One brand
• Customers migrated onto a one
tech stack (Gentrack and
Salesforce at the core)
• One succeeding culture, supported
by adaptive ways of working
And enables:
• Decommissioning of duplicate
technologies
• Realising synergies
> We purchased Trustpower to
accelerate our retail strategy and
journey to become a Future Ready
organisation...
• New Zealand’s largest multi-utility
business
• Capability to deliver multiple
products and services
• Provides scale efficiency to
reinvest in technology

We have a clear focus over the next two years...
Two-year programme of transformation:
> enhance our capability to continuously deliver
propositions which are relevant & compelling
> improving Customer Experience
(CX)throughinsight & personalisation
> leveraging digital technology to gain efficiencies
>building adaptive capabilityacross our people
Delivering:
> customer experience relevancy drivingtenure and
advocacy
> reduced risk of disruption by creating a more
dynamic &capability deeporganisation
> an efficient cost to serve
> afit for futureworkforce
Using technology, data and insights, we have an opportunity to
improve customer experience and personalisation
Note: all data depicted in this image is fictional
ENABLING FUTURE READY

Using technology, data and insights, we have an opportunity to
provide cross-selling opportunities and increase loyalty
Note: all data depicted in this image is fictional
TANGIBLE BENEFITS FROM SMART
INVESTMENTS
Enabling Future Ready means investing in the right
places...
Technology:
>Digital customer: Social connections matter more
than ever
>Next best action: Insight gathering bots
>Open AI language tools: ChatGPT(friend or foe)
>Digital interventions: Reduce human interventions
>Customer lifecycle: Insight = Ongoing Relevancy
One succeeding culture:
>Adaptive delivery models: Test & Learn
>Capability: Fit for future work force
>Crowd sourced capability: The power of the whole

Turitea Wind Farm
Investor Day Site Visit –Thursday 16 March 2023

2

2005
Early investigations and
feasibility
2011
Consented, after which
the project was paused
2019
Contracts signed and
construction started
Jan 2022
Turitea North (33 WTGs)
fully online
Restarted following
turbine technology and
market developments
April 2023
Turitea South (27 WTGs)
commissioning
2017

TRANSMISSION LINE

TRANSMISSION LINE
12 km, 220kV
20 poles, 18 towers
(8 by helicopter)
Grid connection at
Transpower’s Linton
substation
Double circuit line,
current configured
into a single circuit
Constructed by
Electrixunder a
Design-Build
contract
2 Substations –
Plantation in the
North, Browns Flat in
the South
Built to allow
expansion for future
projects i.e. Puketoi

8
WIND FARM

WIND FARM
North – 119MW, 33x3.6MW
South – 103MW, 27x3.8MW
Vestas V112. 125m tip
height, 69m WTG hub
height, 55m blades
25 year service and
availability contract with
Vestas
842GWh Output
North – 470 GWh
South – 372 GWh
1M hours - TRIFR 10.7
~160 sediment and
erosion control devices
Lizards, bats and birds
25km of roading
42km of 33kV cable

WIND FARM CONSTRUCTION - FOUNDATIONS

WIND FARM CONSTRUCTION – FOUNDATION AND HARDSTAND

WIND FARM CONSTRUCTION – TOWERS AND TURBINES

WHAT WE’VE LEARNED

WIND FARM TOUR – THURSDAY 16 MARCH
Please ensure you have:
> Covered shoes -safety shoes/boots if you have them.
> Wrist to ankle clothing.
> Jacket/layers.
> Hard hats, safety glasses and vests will be provided.
> Completed Turitea Water Catchment Reserve Health Declarations (if not already completed).
> 8:30 a.m. pickup from your accommodation.