Tauhara milestone supports expected dividend uplift

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

8 July 2024

Significant Tauhara milestone supports
expected dividend uplift

Following successful completion of the power station reliability run, Contact’s new Tauhara
geothermal plant is now undertaking final commissioning activities. This is a significant milestone in
the delivery of Contact26, Contact’s strategy to lead the decarbonisation of New Zealand.

Tauhara’s 30-day power station reliability run was completed on Monday 24
th
June, with the plant run
continuously over that period at around 152 MW
1
. The plant was also successfully tested at the target
capacity of 174MW. As Contact completes the final stages of commissioning, Tauhara will be run at
130-135MW for the next two months while modifications are undertaken to address vibrations in a
section of the steam separation plant. Once commissioned, Tauhara is expected to operate at around
152MW until further modifications are undertaken during the first planned outage, scheduled for
October 2025, to secure long-term generation of 174MW (as previously advised).

Contact’s 51.4 MW geothermal plant, Te Huka 3, remains on track to be online in Q4 2024.

The replacement of the Wairakei A&B geothermal power station is the next geothermal development
in Contact’s pipeline. Contact is targeting a final investment decision in Q4 2024 on a new binary plant
of around 100 MW
2
, with an indicative construction completion target of mid-2027. A further update,
including Wairakei extension considerations, will be provided at Contact’s FY24 results in August.

Outlook

Contact’s normalised and expected EBITDAF for FY25 is $770m, materially higher than expected in
FY24 (see guidance table in Appendix). Contact’ FY25 outlook reflects changes to its generation
portfolio as it delivers on its Contact26 commitments with Tauhara and Te Huka 3 coming online.
Expected geothermal volumes for the year reflect final planned commissioning activities and the
statutory four-yearly outage at Te Mihi (which reduces generation by around 150GWh). Large new
long-term contracts to the New Zealand Aluminium Smelter (NZAS), Genesis, Oji Fibre and Pan Pac
all commence in FY25. With a reduction in expected gas deliveries, geothermal outages will need to
be met with acquired generation which has elevated near-term generation costs.

With a long-term contract now in place with NZAS and current geothermal projects at or near
completion, Contact expects to deliver a 4cps uplift from its current 35cps annual dividend. This would
be phased in 2cps increases across the final FY24 and interim FY25 dividend periods. While the
proposed initial ~100 MW Wairakei replacement capex project is under construction, further increases
to dividend per share are not currently anticipated.
3


- ends -
Investor enquiries Media enquiries
Shelley Hollingsworth Louise Wright
Investor Relations and Strategy Manager Head of Communications and Reputation
+64 27 227 2429 +64 21 840 313
shelley.hollingsworth@contactenergy.co.nz louise.wright@contactenergy.co.nz

1
The Guaranteed Net Power Output (GNPO) for Tauhara is 152MW.
2
Contact expects a scaled new build plant to cost over $7m/MW including approved pre-FID spend.
3
All dividend decisions are a matter for the Board at the conclusion of each reporting period. These align to the dividend policy
and are dependent on business and market conditions when each payment decision is made.

2
Normalised and expected FY25 EBITDAF
Strategic fixed price1,900GWh$80/MWh$152m
CFDs1,770GWh$154/MWh$273m
C&I1,300GWh$150/MWh$195m
Retail3,800GWh$154/MWh$585m
Other income³$47m
$1,252m
Hydro mean3,900GWh$0/MWh-$0m
Geothermal average4,620GWh$4/MWh-$19m
Thermal350GWh$130/MWh⁴-$46m
Acquired350GWh$215/MWh-$75m
-$139m
Length⁵$86mTransmission/Storage-$71m
Location losses⁶-$85mOperatingexpenses-$272m
Total$1mTotal-$343m
1.All volumes are at the Grid Exit Point (GXP)
2.Net price is equal to tariff less pass-through costs (network, meters and levies) /MWh
APPENDIX: ASSUMPTIONS FOR NORMALISED EARNINGS
3.Steam sales, retail gas gross margin, broadband gross margin and other income
4. Gas price of $8.20/GJ, carbon price of $80/unit and thermal portfolio heat rate (10GJ/MWh)
5.Length of 450GWh p.a. assumed
6.Locational losses of 5.1% on spot purchases and settlement of CFDs sold at a
wholesale price of $190/MWh
*Fuel is natural gas and carbon costs.
** Retail volume contracted competitive risk remains on pricing achieved.
1,460
310
Channel choices maximise
long term value¹
1
Net price² driven by
best commercial practices
2
x
=
FY assumptions that deliver expected & normalised EBITDAF for FY25
Fuel cost
Net Revenue
Trading
Fixed costs
Hydrology & Asset
availability optimise generation
3
4
Total
x
=
Access to and price of fuel* drives
financials & risk position
Total
Trading delivers value to more
than offset locational losses
5
Digitalisation & continuous
improvement optimise fixed costs
6
x
x
x
x
x
x
x
=
=
=
=
=
=
=
1,070
230
3,800
1,900
CFDs
C&I
Retail
Strategic fixed
$154/
MWh
$150/
MWh
$154/
MWh**
ContractedUncontracted
1,252
-139
-343
1
770
x
Jul-24Sep-24Jan-25Mar-25Nov-24May-25Jul-25
320
311
311
299
240
222
211
190
204
184
158
135
218
178
218
181
218218
184184
245
203
245
203
245
203
244
200
ASX Futures $/MWh
monthly contracts
At 5 July 2024
$80/
MWh
OTA
BEN
•Note, these figures are subject to rounding.