Meridian Energy targets $2bn renewable investment amid supply challenges

Meridian Energy has announced plans for significant investment in renewable generation, with New Zealand projected to require approximately NZ$30 billion by 2050 to meet electricity demand. This investment includes a capacity upgrade at the Waitaki Hydro Station and aims to bolster supply security as gas production and reserves decline. The company also highlights the importance of operationalizing Pūkaki contingent storage and improving other hydro storage options.

Meridian's FY25 key points reveal a 100MW Ruakākā BESS with 200MWh storage and 112MW of enhanced hydro capacity. Furthermore, the company achieved a 10% increase in customer connections in FY25, bringing the total to 405,000 ICPs, and reported a staff engagement ranking in the top 25%. Financial performance for FY25 shows EBITDAF at NZ$611 million and operating cash flows at NZ$318 million.

Meridian’s dividend policy targets a payout ratio of 80% to 100% of Operating Free Cash Flow, with 21.2 cents per share declared in FY25. The company also reported net debt of NZ$1,505 million, reflecting a net debt to EBITDAF ratio of 2.5 times.