NZ Windfarms Limited Analysis

Overview

Current:

The Te Rere Hau wind farm is situated on North Range Road in the Tararua Ranges approximately 11 kilometres from Palmerston North. The site operates 91 Windflow Technology WF500 turbines, with an output of 45.5 MW, capable of producing approximately 116.7 GWh's of renewable electricity per annum enough to power about 16,000 homes, or in excess of half the households in Palmerston North.

The wind farm provides economic benefit to the country through providing electricity generation close to where it is needed and an estimated $2m to the local community through the employment of local residents and purchase of other goods and services. TRH Services Ltd (100% owned and controlled by NZ Windfarms Ltd) is the entity responsible for the operation and maintenance of Te Rere Hau wind farm.

The electricity generated is fed into the national grid through a transmission line connected to the node at the adjacent Tararua wind farm.

Future:

The Company has secured resource consents paving the way for potentially repowering the Te Rere Hau wind farm with up to 30 new, larger, three-bladed wind turbines. Repowering the Te Rere Hau wind farm could position it as an onshore wind farm with an estimated capacity factor between 48% to 51% (compared to our current fleet capacity factor of ~25%). Average annual energy production could increase substantially from 100 to 120 GWh to between 530 GWh and 570 GWh. The Company is currently advancing confidential commercial negotiations for the repower.

Additionally, we have identified an opportunity for further expansion of the repowered wind farm with nine additional turbines through the Aokautere Extension project. This could add up to an additional 170 GWh to the production potential of the repowered wind farm. (i.e. up to 740 GWh in total). This project has been successfully referred to the fast-track consenting pathway, and we are currently progressing the resource consent application. Our intention is to submit the second fast-track consent application by the end of October 2023, with a consenting decision possible in Q1 2024. If successful, this will be incorporated into the repower.

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We have secured land rights to build an alternative higher capacity grid connection option. We are in advanced discussions with Transpower on the grid connection requirements.

Background:

Consent for the existing wind farm was granted from the Palmerston North City Council in 2005. Construction of the wind farm commenced the following year in 2006 and involved the commissioning of 65 turbines on 240 hectares of land owned by the Company.

In 2009 resource consent was sought from the Tararua District Council for an extension of the farm to install up to 56 turbines on the eastern side of the wind farm. Consent was granted in March 2010 and 32 turbines were commissioned progressively up to 1 July 2011.

The 500 kW turbines are 30 metres high and have a rotor diameter of 33 metres. The turbines were the only locally produced variants being operated in New Zealand and are designed for the strong winds and turbulent conditions prevailing in the region. See the Windflow 500 brochure for more information on the turbine.

97 turbines were constructed, however only 91 turbines are operated currently. The consent allows for a further 56 WF500 turbines to be constructed and operated, but there are no plans to do this at this time.

Performance

The following information was extracted from NZ Windfarms Limited's half year results, released 28 February 2025:

Key Highlights

• Acquisition of Hau Nui windfarm from Genesis Energy.
• Significant progress on Te Rere Hau repower project in partnership with Meridian Energy.
• Completion of the Expression of Interest (EOI) phase for raising additional equity for the TRH Repower project.
• Landowner agreements in place for several greenfield wind development sites.
• New fixed price variable volume contract for differencee (CFD) with Genesis Energy for 100% of the output from Hau Nui windfarm.
• Approval of the Aokautere Extension Project by the Expert Consenting Panel.
• Strategic alignment of ongoing maintenance, operation, and repowering activities at Hau Nui with Te Rere Hau.

Our continued focus on efficient and sustainable operations has delivered a solid result for the half-year period despite challenging conditions. Net electricity revenue for the period was $6.1m, down from $6.3m in the prior period, driven by a 4.5% decrease in generation on lower wind speeds. Availability at 96.5% was marginally lower than prior period mainly due to optimisation of capital investment into the fleet as we approach Final Investment Decision (FID) on the repower of Te Rere Hau.

H1 EBITDAF was $3.0m, down 17% on pcp, driven primarily by lower generation volumes. H1 Net profit after tax was $2.7m, compared to a -$3.1m loss during the previous half-year. Operating cash flow increased by 108% to $2.5m with a key contributing factor being no interest payments due as our facility with BNZ was fully repaid.