Contact to revisit Wairākei development options

Contact Energy Limited Level 2 Harbour City Tower, 29 Brandon Street, Wellington 6011 | PO Box 10742, Wellington 6143
P: +64 4 499 4001 | F: +64 4 499 4003 | W: contactenergy.co.nz

17 May 2024

Contact to revisit Wairākei development options

Contact has been working towards a final investment decision on GeoFuture - a new geothermal plant
on the Wairākei steamfield, due to come online in FY27. The project has been undertaken with the
objective of replacing the Wairākei geothermal power station at a scale that maximises generation
from the field. To provide up-front confidence in schedule and cost estimates, advanced front-end
design and a competitive tender for a large-scale power station have recently been completed.

Since the project was initiated, costs have increased through construction inflation as well as a
weakened New Zealand dollar. On completion of detailed development activities, assessed total
project costs have come in substantially higher than previously expected, with the impact of increased
construction costs compounded at scale.

While geothermal project economics remain favourable, given the assessed total project cost and
complex integration with Contact’s existing operations on the Wairākei steamfield, a range of
alternatives will be revisited. This includes a phased approach to new power station investment,
potentially together with the longer running of existing plant. A phased approach would also reduce
market and execution risk. Based on the latest information, we would expect a scaled new build plant
to cost over $7m / MW
1
.

Contact has resource consent to operate the existing Wairākei geothermal power station up to June
2031 and is assessing the operational, regulatory and capex requirements for the extended running of
some of the plant. We expect the additional capex requirements will be economic but meaningful.

To undertake works critical to maintaining field development options, the Board has approved an
additional $30 million of development costs, taking the total to $144 million. Nearly all spend to date
on the project is expected to deliver benefits under all options.

Contact will provide an update on Wairākei development options at its FY24 results.

“Continued long-term generation that sustainably optimises the take from the Wairākei steamfield is
an important part of Contact’s renewable energy strategy and our commitment to decarbonise,” said
CEO Mike Fuge. “We are taking a disciplined approach to capital allocation and are fortunate to have
an array of options at our disposal which can flex to changes in the external environment.”

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Investor enquiries
Shelley Hollingsworth
Investor Relations and Strategy Manager
+64 27 227 2429
shelley.hollingsworth@contactenergy.co.nz

Media enquiries
Jody Bowman
Senior Communications Advisor
+64 21 029 53732
jody.bowman@contactenergy.co.nz


1
Total project cost including all approved pre-FID spend.