Right.
Now.
Meridian Energy Limited,
Integrated Report 2023.
Wind. Water. Sun.
Doing right cannot wait
The world has talked about doing the right thing
by our environment for a long time. That talk has
now shifted the world dialogue from ‘plan to’, to
‘can do’. Meridian’s action this year shows a
pace and progress that we must maintain.
Let’s do. Right. Now.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
U
N
E
M
Menu
02
10
12
14
15
16
17
18
19
20
22
Far-reaching changes
A 20 year pipeline
Shaping our sustainability
Integrated reporting
Chief Executive & Chair report
Acting on our purpose
34
Right for nature
36 Our commitment
37
37
40
41
42
46
47
50
50
52
A change in the weather
Preserving water quality
Broadening our commitment
to nature and biodiversity
Law and regulations compliance
Fully scoping our emission reductions
Aiming for best disclosure on climate
Thinking full circle
A new standard for sustainable
infrastructure development
Forever forests continues to grow
Sharing our views on policy and
regulatory changes
Right. Now.
Count the days
The right resources
Shared focus
60
Technology for now and beyond
104 Taking responsibility for behaving ethically
62
63
63
Innovating together
A platform for success
Charging ahead
105 Being good humans
106 Connected to communities
108 Expanding our productive partnerships
The power to make a difference
64 Managing key assets for value
110 Addressing energy wellbeing
Demand response agreement reached with NZAS
112 Our impacts anchored in people
66
68
69
71
72
73
74
74
75
Partners finalised for hydrogen developments
Doubling our development ambitions
Zero to 200+ in next to no time
Certified Renewable Energy promotes
decarbonisation
Processing big changes
Electrification supports demand flexibility
Infrastructure upgrades
Informing how we stay secure
76 Our impacts anchored in technology
80 Humanly possible
82
Empowering our people
83 Our working style
83
Attracting our next generation
87 Our future of work
88
89
94
96
Planning to succeed
Focusing on our critical risks
Building our sense of belonging
Addressing gender injustice
118
Better, commercially
120 Strong performance
121
Earnings were strong
121 Wholesale change for the better
122 Dividend for the year
122
126
Retail pricing increases
Fulfilling different needs through our retail brands
127 Maintaining our credit rating
128 Our impacts anchored in commercial activities
132
The right remuneration
146 Preparing this report
164 Directors’ statement
188 Our financial performance
190 Group financial statements
243 Independent auditor's report
247
Independent Assurance Report
249 GRI standards content index
254 Directory
54 Our impacts anchored in the natural world
103 Doing our part to respect human rights
Right.
By our commitment:
100%
Our target for
decarbonisation through
renewable electricity.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
.
W
O
N
.
T
H
G
R
I
2
Now.
Through our pipeline:
We are accelerating
the delivery of new
renewable options.
3
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 Right.
In our partnerships:
1 : 1
Shared success
starts with sharing
responsibility.
3
3
2
2
0
0
2
2
T
T
R
R
O
O
P
P
E
E
R
R
D
D
E
E
T
T
A
A
R
R
G
G
E
E
T
T
N
N
I
I
N
N
A
A
I
I
D
D
I
I
R
R
E
E
M
M
.
.
W
W
O
O
N
N
.
.
T
T
H
H
G
G
R
R
I
I
4
4
Now.
In how we work:
We recognise that
climate change is
not going to be solved
by one company,
one person or
one community.
55
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 Right.
Within our timeframes:
2030–
2050
The window to get
this right for everyone
is closing quickly.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
.
W
O
N
.
T
H
G
R
I
6
Now.
In terms of urgency:
This is the time to
be decisive and to
take ownership of the
solutions available to us.
7
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 Right.
By our limits:
1.5�C
The highest degree
of climate change
we should tolerate.
3
3
2
2
0
0
2
2
T
T
R
R
O
O
P
P
E
E
R
R
D
D
E
E
T
T
A
A
R
R
G
G
E
E
T
T
N
N
I
I
N
N
A
A
I
I
D
D
I
I
R
R
E
E
M
M
.
.
W
W
O
O
N
N
.
.
T
T
H
H
G
G
R
R
I
I
8
8
Now.
Based on our controls:
Our near-term
absolute emissions
reduction targets
are science-aligned.
99
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 Count the days:
2,557
2,557 days. That’s the gap between the end
of our 2023 financial year and the close of
our 2030 financial year. In that time, if all
goes to plan, we’ll see seven of our own
major developments consented, construction
underway and several generating electricity.
Key industries will have shed diesel and coal.
The global demand for Green Hydrogen will
have grown exponentially. Electric vehicles
will be accessible and everywhere.
1 0
Benmore Power Station, Otematata. ►
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 We’re very clear about what we’re working together to deliver:
Clean energy for a fairer and healthier world.
It may feel as if the next decade is ages away,
but when you frame it in terms of what needs
to change to get us all to a net-zero world,
time is flying by.
Pace alone won’t deliver what’s needed. We’ll
do our fair share, but we need a national mindset,
conducive legislation and genuine commitment.
We need the right sites fitted with the right
technology to transform how we power our
economy. We need robust infrastructure.
We need the backing of our investors. We need
people with the best skills applying their expertise
to make decarbonisation happen faster.
We can’t resolve it alone. And so, this year
our drive to build meaningful and effective
partnerships has gathered pace. We’re now
working with our customers to create energy
solutions in different ways. We’re working with
iwi and rūnaka to better understand how we
can relate meaningfully to the natural resources
that our developments need. We’re finalising
arrangements to develop a hydrogen business.
We're continuing to work with New Zealand's
Aluminium Smelter and deciding what our
future relationship with them might look like.
All this will take time to get right. But it can’t
take any more time than it needs. That’s a good
pressure to put on ourselves – and others.
There’s not a day to waste.
11
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 The right resources
NET
ASSETS
FY23
REVENUE
TOTAL MARKET
CAPITALISATION
FY23
EBITDAF*
$5.9bUp $3.2bDown
$14.5b
$783mUp
* EBITDAF is a non-GAAP financial measure
of earnings before interest, tax, depreciation,
amortisation, unrealised changes in fair value
of hedges, impairment and gains or losses
on sales of assets.
100% RENEWABLE ENERGY GENERATOR – FROM WIND, WATER AND SUN
1 2
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 KIWI
MAJORITY OWNED BY
THE NZ GOVERNMENT
LISTED ON
NZX + ASX
10%
LEGISLATED MAXIMUM
NON-CROWN OWNERSHIP
BY ANY PERSON
We’re one
of Aotearoa
New Zealand’s
largest organisations,
employing over
1,000 people.
1 3
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 Shared
focus
To deliver on our purpose of clean
energy for a fairer and healthier
world, we focus on areas where we
can make a meaningful difference
and that align with our values and
goals of climate action.
We do this by putting our
customers first and being a great
place to work, and through our
role as a responsible generator.
We value ‘being gutsy’, working
together by ‘being in the waka’
and doing the right thing by ‘being
a good human’. This will deliver
positive outcomes for New Zealand
and for our shareholders.
Our purpose
Clean energy for a fairer and healthier world
Delivering through a clear strategy
Champion
Competitive markets
Sustainability
Climate action
Optimise
Trading
Asset managment
Re-consenting
Financing
Grow
Retail
Generation
Flux earnings
Creating a great workplace through shared values
Kia tangata pai
Be a good human
Kia maia
Be gutsy
Hoea tahu te waka
Be in the waka
Our commitment to the UN Sustainable Development Goals
14
Our primary SDG focus
Our secondary SDG focus
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 The power to
make a difference
We harness nature to generate electricity through Wind, Water and Sun.
Generation
We generate around 30% of
New Zealand’s electricity through:
• 7 Hydro stations
• 5 Wind farms (2 new underway)
•
1 Grid-scale solar array underway.
Operation
We have 1,047 employees – 92 at
our power stations – throughout
5 offices across New Zealand.
Ruakākā
(BESS construction)
Auckland
Te Uku
Harapaki
(construction)
Mill Creek
West Wind
Customers
We have 363k customer connections,
around 15% New Zealand’s households
and businesses (Meridian Energy
and Powershop).
White Hill
Manapōuri
Christchurch
Waitaki Power Scheme
Meridian Asset Key
Wind Farm
Hydro Station
Battery Storage
Meridian Offices
Powershop Office
Te Āpiti
Mt Munro
(consenting)
Masterton
Wellington
Ōhau A
Twizel
Ōhau B
Ōhau C
Benmore
Aviemore
Waitaki
A presence in 3 countries (remote workforce).
128 Employees.
1 5
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 – v
Far-reaching
changes 2022–2023
Nature
• Extended our carbon neutral targets
to cover our operational and our
construction-related emissions
• Set a Nature-Positive ambition
• Updated our Biodiversity and
•
Deforestation Commitment, and
committed to piloting the Taskforce
on Nature-related Financial
Disclosures framework
Increased our co-funding of
Project River Recovery, Aotearoa’s
longest-running conservation/
business partnership with the
Department of Conservation (DOC)
Technology
• The country’s biggest supplier of
retail energy with over 9,100GWh
• Harapaki and Ruakākā projects
progressing well despite
weather events
• Announced strategy of seven
major development projects in
seven years, through to 2030
• 472GWh of process heat
conversion from coal to electricity
for big businesses underway
• Upgraded unit capacity at
our Lake Manapōuri and Lake
Benmore stations
• 237 charge points have been
• Over 610,000 Flux customer
added to our Zero network in 2023
• We estimate we have avoided
between 15,000 and 20,000
tonnes CO2eq1 of emissions at
Harapaki and diverted 79% of
waste from the site from landfill
• Over 125 companies purchased
more than 640GWh of Renewable
Energy Certificates
•
connections
Finalised partners for our
hydrogen project
• Demonstrated the future of
demand flexibility and virtual
power plants through smart
charging and vehicle-to-grid trials
People
• Building a strong partnership
with Waitaki Rūnaka (Moeraki,
Waihao and Arowhenua) and
DOC on their support for the
Waitaki reconsent process
• Updated our Group Code
•
of Conduct
Launched energy wellbeing project
to support 5,000 households
• Engagement increased to 73%
• Announced new universal benefits
for staff, including health insurance
and wellbeing leave
• Strengthened our management
of the critical safety risks in
our business and introduced
comprehensive new safety software
• Total Decarbonisation
Community Fund contribution
to date of $333,310 to advance
decarbonisation and energy
efficiency projects nationwide
Commercial
•
• Total value of our retail brands
10% increase in EBITDAF
(based on netback) increased by 17%
• Strong balance sheet to support
future investment
• 3% increase in ordinary dividend
•
10% increase in operating cash flows
• BBB+/Stable credit rating maintained
• A $200 million Green Bond to
continue refinancing eligible wind
and hydro projects and assets
closed oversubscribed
1 6
1
A carbon dioxide equivalent or CO2 equivalent, abbreviated as CO2eq is a metric measure used to compare the emissions from various greenhouse gases on the basis
of their global-warming potential (GWP), by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential.
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 A 20+ year pipeline
Design to
be reviewed.
Wind
Total 2.1GW
Solar
Total 2.4GW
Mt Munro
(90MW)
Taranaki
(300MW)
Manawatū
(200MW)
Secured options (140MW)
Advanced options (1,400MW)
Ruakākā
(120MW)
Swannanoa
(130MW)
Taranaki
(150MW)
Auckland
(350MW)
Advanced options (1,650MW)
Battery storage
Total 0.2GW
Ruakākā
(100MW)
Manawatū
(100MW)
2023
2024
2025
2026
2027
2028
2029
2030
2031
2040
17
RIGHT, NOW.MERIDIAN INTEGRATED REPORT 2023 Shaping our
sustainability
Sustainability means doing the right things today so
our planet and people can survive and thrive. Meridian’s
sustainability framework work is focused on climate,
environment and people initiatives, and sees us working
towards a fairer and healthier world by helping to create:
A more sustainable
Aotearoa and planet
Generation
Biodiversity
Water
Circular Economy
Greater sustainability
for our customers
Energy Innovations
Energy Wellbeing
More sustainable
communities
Community Development
Iwi Engagement
And a more sustainable company
Our Commitments & Targets
Reporting & Transparency
Sustainable Finance
Supply Chain
Ethical Business
Our People
Our Te Ao Māori Journey
Sponsorships
1 8
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023 Integrated
reporting
Decarbonisation is complex. It will
continue to require considerable
investment for many years. But it
also represents game-changing
potential in terms of combatting
climate change and improving
New Zealand’s relative competitiveness
on a global stage. In looking to take
action right now, we believe it’s
critical that we keep stakeholders fully
informed about what we are doing
and the implications of those actions.
Our long-standing commitment to
integrated reporting is about providing
as full a picture as possible of our
strategy and operations as well as the
pressures and opportunities of the
environment within which we work.
ally
i
c
r
e
m
m
o
c
r,
e
t
t
e
B
R i g h t for nature
T
e
c
a
n
d
h
n
o
l
b
o
e
g
y
y
o
n
f
o
r n
o
Meridian’s
Integrated Report
focusses on these
four key areas.
Humanly pos s i b l e
d
w
Right for nature
Our Sustainability Framework guides
us to make conscious decisions around
our business impacts. Our long-term
goal is to support biodiversity and be
as circular as possible.
Technology for
now and beyond
Developing and leveraging our
technology solutions is proving an
effective way for us to evolve our
infrastructure responsibly to meet
the country’s energy demands.
Humanly possible
The complexities of decarbonisation
are best solved by humans coming
together. We report on how we are
supporting our people to work safely,
fairly and effectively.
Better, commercially
Shifting our commercial model
to focus on energy solutions will
help meet our customers future
decarbonisation goals.
1 9
RIGHT. NOW.MERIDIAN INTEGRATED REPORT 2023
Chief Executive
& Chair report
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
R
O
P
E
R
O
E
C
D
N
A
R
I
A
H
C
2 0
Our strategy is clear,
our pipeline is robust,
the opportunities
are exciting, and
urgency is a powerful
motivation.
2 1
CHAIR AND CEO REPORTMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
R
O
P
E
R
O
E
C
D
N
A
R
I
A
H
C
2 2
Acting on
our purpose
This year we have been proud to put actions
behind our purpose of Clean Energy for a
fairer and healthier world. We are focused on
decarbonisation and have several significant
development projects underway and an
ambitious programme for renewables-led
growth through to 2050. This year we have
also successfully navigated significant rainfall,
and summer droughts, and finished the
year strongly and ahead of last year’s result.
This Integrated Report is dated 28 August 2023
and is signed on behalf of the Board by:
Mark Verbiest,
Chair
Julia Hoare,
Chair Audit and
Risk Committee
Creating energy solutions
In the past five years we’ve focused on growing
Meridian’s retail presence and the volume of
energy sold to our customers. Our commitment
to a sustainable future is backed by our having
strong market share. In that time, the company’s
retail sales volumes through our Meridian
and Powershop brands have grown by 60%,
from around 5,730GWh in 2017 to more than
9,100GWh today. As a result, we continue to be
the country’s largest retail supplier of electricity.
Our dual-brand strategy continues to be
effective because it enables us to tailor our
products and services to meet our customers’
priorities. Powershop offers customers a
savvy, digitally driven approach that enables
them to buy their power their way and save
money doing it. At the same time, Meridian
is recognised as one of this country’s most
high-profile sustainable brands and offers
appeal to environmentally conscious business
and residential customers. We also have
particularly strong propositions for our
commercial, industrial and agriculture customers.
We signalled last year that we would be
evolving our customer approach to concentrate
on developing energy solutions focused on
transport, distributed generation and storage
(e.g. rooftop solar with batteries), process heat
and demand flexibility. This customer strategy
aligns with our company’s decarbonisation
agenda and will support customers to take
emissions out of their own operations whilst
saving money on their overall energy bills.
Our public EV charging network, Zero, continues
to expand, with 237 charging points across both
North and South Islands.
Sales of our Certified Renewable Energy (CRE)
product have continued to grow strongly, and
large business customers have purchased more
than 640GWh in Renewable Energy Certificates
this year. Net proceeds from the purchases of
CRE have been invested back into decarbonisation
projects through our Decarbonisation Community
Fund we introduced this year. To date, more
than $1.2 million has been raised and more than
$330,000 has been contributed to projects
including KidsCan (two EVs plus charger), South
Island Rowing (solar), Waipuna Community,
Youth and Child Services in Christchurch (solar)
and EcoMatters Bike Hubs in Auckland (EV).
◄ Installation of the first turbine at Harapaki Wind Farm, Hawke's Bay.
2 3
CHAIR AND CEO REPORTMERIDIAN INTEGRATED REPORT 2023 A sharper focus
on energy hardship
Wholesale prices remained high this
year, despite high levels of rainfall.
Gas uncertainty remains an issue
domestically, while lingering supply
chain concerns and geopolitical
issues mean costs have been
increasing. Whilst we have been
able to absorb some of the cost
pressures within our operations,
we had to increase retail prices
during the year. For most homes
this increase was less than the
overall rate of inflation, but that
still added to the pressures on
New Zealanders facing ongoing
cost-of-living increases.
It is worthwhile noting that
average prices in real terms have
broadly fallen since 2015. In 2023,
an average household is paying
less in real terms (on a price per
unit $/kWh basis) than they would
have in any year since 2011.
To counter the increased cost
of living impacts on our most
vulnerable customers, we piloted
an energy wellbeing programme.
The pilot took a holistic approach
to supporting customers who
were in energy hardship, not only
through bill credits and payment
plans, but also by funding access to
in-home assessments via partner
services, which also utilised our
co-funding to give customers
appropriate interventions – from
curtains right through to insulation
and heat pumps.
Our pilot provided support for
130 households, and we found
that by being a conduit to social
support agencies and by applying
our own capabilities we were
able to help these customers to a
point where they could afford to
pay for their power and heat their
homes. We have now committed
to growing our Energy Wellbeing
Programme with a $5.1 million
investment, aimed at supporting
5,000 Meridian and Powershop
households in hardship on their
journeys towards energy wellbeing
by the end of 2024.
Our community Power Up fund
continues to support a wide range
of local projects in communities
close to our assets. Over the last
16 years, we have invested more
than $9.6 million in more than
1,300 community-led projects.
“
We’ve committed to
growing our Energy
Wellbeing Programme
with a $5.1 million
investment, aimed
at supporting 5,000
households in hardship
on their journey towards
energy wellbeing.”
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
R
O
P
E
R
O
E
C
D
N
A
R
I
A
H
C
2 4
A sustainable approach
to reconsenting Waitaki
Power Scheme
In late July, we submitted a
reconsenting application to secure
the generation outputs from the
portion of the Waitaki Power
Scheme that we own and will
operate for the next 35 years.
The existing consent conditions
expire in April 2025.
Meridian and Genesis Energy
are owners and operators of
the power stations making up
the Waitaki and Tekapo Power
Schemes. Meridian operates the
Waitaki, Benmore, Aviemore and
Ōhau A, B and C power stations
which make up around 87% of
the total scheme whilst Genesis
operates the Tekapo A and
Tekapo B power stations.
The Waitaki Power Scheme
accounts for around 18% of
Aotearoa’s electricity and more
importantly around 67% of
average hydro-electricity storage,
so the continued operation of the
scheme is critical for all electricity
users. The flexibility this scheme
provides will play a key role in how
New Zealand can help combat
the impacts of climate change
through continued electrification
and by enabling the further
growth of intermittent wind
and solar electricity.
The scheme, as it was developed
through much of the last century,
made irrevocable changes to the
Mackenzie country and the Waitaki
river system. Some of the changes
have been positive, especially for
recreational users of the hydro lakes
and the catchment fishery, but the
dams and canal systems within the
catchment have created significant
challenges for biodiversity and
cultural outcomes. So we are
taking steps to build a much more
sustainable mitigation programme
that is consistent with our values
and sustainability aspirations. As
part of building this programme,
we have engaged with a range of
people and stakeholders. Most
notably, together with Genesis, we
are building a strong partnership
with Waitaki Rūnaka (Moeraki,
Waihao and Arowhenua), as the
representatives of mana whenua
Ngāi Tahu Whānui, and DOC on
their support for the reconsenting
application and the operation of
the scheme for the next 35 years.
These relationships create a strong
foundation from which we can
work collectively to help improve
the indigenous biodiversity and
cultural outcomes throughout the
catchment for the next couple of
generations, and beyond.
The reconsenting process still needs
to run its course, but by ensuring
that we have strong endorsement
and support from iwi and the key
parties in the region we can be
confident of a positive outcome.
2 5
CHAIR AND CEO REPORTMERIDIAN INTEGRATED REPORT 2023 A multi-decade commitment
to renewable growth
Protecting and enhancing our
existing renewable generation
assets is critical and so is building to
meet future growth in demand for
electricity. Electrification remains
the obvious catalyst for New
Zealand to achieve a net-zero-
carbon economy. Aotearoa’s long-
term target of net zero emissions by
2050 will require around $30 billion
of investment in new renewable
generation. For Meridian to do our
share of the heavy lifting we’ll need
to build the equivalent of 20 large
wind farms (i.e. Harapaki size) in
the next 27 years.
We are investing strongly in
our pipeline of new renewable
generation opportunities and our
capability to deliver them. Our
Renewable Development Team
has more than doubled in size in
the past couple of years and we
have also more than doubled the
size of our renewable development
pipeline of potential projects. We
now have a deep pipeline of 4.7GW
(11.1 TWh) of development options,
with 1.5GW of that capacity
secured and 3.2GW in advanced
prospects (2.4GW solar, 2.1GW
wind and 0.2GW battery storage).
The energy sector as a whole is
embarking on a growth phase
that will be greater than any
other in New Zealand’s history.
There is no shortage of good
renewable options in this country
and no shortage of capable, well
capitalised businesses wishing
to develop them. Competition is
strong, and we are confident the
sector will drive the best outcomes
at the least cost for New Zealanders.
“
Our renewable
development team has
more than doubled in
size over the last couple
of years and we have
more than doubled the
size of our renewable
development pipeline
of potential projects.”
In support of the massive capital
investment needed to realise
these renewable generation
goals, Aotearoa needs an enabling
Resource Management Framework.
Specifically, consenting authorities
must maintain their ability to
balance localised environmental
impacts and community views with
the national and climate action
advantages associated with large-
scale renewable electricity projects.
The Resource Management Act
reform process is working through
the legislative process right now
and the outcome will be critical in
ensuring that electrification keeps
moving forward – and fast.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
R
O
P
E
R
O
E
C
D
N
A
R
I
A
H
C
26
Strong progress
with our projects
Last year, we translated our longer-
term goal of developing our share
of the new renewable generation
necessary to meet our country’s
decarbonisation aspirations into
a near term target of having
seven new large-scale renewable
generation projects underway
in the next seven years. It’s an
ambitious target but one that is
clearly necessary, and we have
made a solid start.
Our Harapaki wind farm, currently
being built in Hawke's Bay, was in
the path of Cyclone Gabrielle and
did suffer some damage. Despite
the significant disruption, the
response from Transpower, Waka
Kotahi, Unison and our site team
in restoring the local and national
grid and roading to the site means
the project is three months behind
schedule. Harapaki will produce
first power later this year and will be
powering up to 70,000 households
by September 2024. We are
immensely proud of the Meridian
team based in the region who were
quick to support rescue services
and became first responders
to some of the victims directly
affected by the cyclone
in those first days and weeks.
Those efforts were recognised
by Red Cross when we were
honoured for our contribution at
the Disaster Response Recognition
Awards event in August.
As part of our work at Ruakākā
Energy Park, near Whangārei, we
are developing a 100MW grid-scale
Battery Energy Storage System
(BESS). The BESS will support
stable grid operations as it enables
us to store energy during low
demand times of the day then inject
that energy back into the grid in
the morning and evening peaks.
Alongside this battery, we are
planning a 120MW solar farm that
will share the BESS infrastructure.
The project is the third of our seven
projects and is close to lodging for
consent. We hope to commence
building early in 2024.
The consent application we
have lodged for a new 300GWh
wind farm is Mount Munro in
Wairarapa, the fourth of our
seven projects and we plan to
start construction early in 2025.
Visual simulation of Mt Munro (Boffa Miskell), Wairarapa. ►
2 7
CHAIR AND CEO REPORTMERIDIAN INTEGRATED REPORT 2023 We are moving forward on the
Southern Green Hydrogen Project
alongside our partners Woodside
Energy (Woodside), Mitsui & Co Ltd
(Mitsui) and Ngāi Tahu and are now
moving towards detailed design.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
R
O
P
E
R
O
E
C
D
N
A
R
I
A
H
C
Advancing our Southern
Green Hydrogen Project
Many of the world’s major
economies are committing huge
amounts of capital to hydrogen
technology as a source of
clean energy. New Zealand has
competitive advantages that
could enable us to be an early
mover and leader in this industry.
Producing green hydrogen
at scale has the potential to
generate significant benefits
for New Zealand, including:
• valuable jobs and
export earnings
• emission reductions for
processes and industries
that currently have limited
clean fuel alternatives e.g.
heavy transport, agriculture,
aviation and steel production
•
support our transition to a 100%
renewable electricity system
by providing a cost-effective
method to mitigate up to 40%
of dry-year risks through
a flexible demand response.
2 8
Near Manapōuri Power Station, West Arm, Lake Manapōuri, Fiordland. ►
Contingencies in place
for the NZAS contract
Meridian’s contract for energy
supply with New Zealand’s
Aluminium Smelter (NZAS) ceases
at the end of 2024. We have been
in discussions with NZAS since 2022
on the possibility of entering into a
new electricity agreement, but no
agreement has been reached yet.
Meridian and NZAS entered into
a conditional demand response
agreement in April 2023.
The demand response
agreement was approved by the
Electricity Authority and became
unconditional in June 2023.
The demand flexibility arrangement
for 2023 and 2024 allows Meridian
to reduce the contract volume
offered to NZAS by up to 50MW
to help mitigate winter demand
spikes and energy needs during
dry hydro periods. Different levels
of demand response are available,
with Meridian compensating NZAS
at a fixed price each time
the demand response agreement
is called. The demand response
agreement will terminate on 31
December 2024 – the same day
as the current NZAS contract.
We are often asked whether
Southern Green Hydrogen would
be able to co-exist with NZAS,
if NZAS does remain operating
in New Zealand beyond 2024.
We absolutely believe that both
industries can coexist, as can many
other large industries e.g. milk
powder manufacturing, which
must convert from using fossil
fuels in their manufacturing
processes to using more
renewable forms of energy.
To that end we continue to work
with customers to help them
convert their industrial heat
processes to electric. We have
contracts and Memoranda of
Understanding amounting to
472GWh for new electrification
projects. And, similarly to the
demand response agreement struck
with NZAS, our Energy Innovation
Team is working with Open Country
Dairy regarding a 27MW demand-
flexibility arrangement. This
arrangement will see energy
returned to the grid during dry
hydro periods or to meet peak
demand for all other customers.
Our assessment is that we are only
just starting to tap the potential
for customers to offer demand
response to the electricity market
and thus play a key part in ensuring
overall system security.
All of this new demand for
electricity will undoubtedly require
a greater supply, but there are
ample new renewable generation
opportunities across the motu that
can support sustainable industries
and economic development.
We also believe that, whilst like
most developed nations Aotearoa
is dealing with inflationary
pressure right now, the cost of new
renewables will continue to trend
down over the long term and new
demand will not drive up the costs
of electricity to other consumers.
In fact, we expect that most likely
the opposite will occur.
We’ve been dealing with the whole
NZAS 'will they stay or will they go?'
question for a few years now.
And it is very pleasing to note that
many of the initiatives we put in
place in 2020 to mitigate the near-
term effects of a potential loss of
demand from NZAS have become
core to our business strategy,
irrespective of whether NZAS closes
at the end of 2024 or continues
operating beyond that date.
2 9
CHAIR AND CEO REPORTMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
R
O
P
E
R
O
E
C
D
N
A
R
I
A
H
C
3 0
Making even better
use of our assets
Our Generation Team has
encountered some challenges
this year, most notably issues with
two of the unit transformers
at the Manapōuri Power Station.
Both units have been taken out
of service for extended periods
for testing and are now operating
under an enhanced monitoring
regime. To date, the cause of the
issue has not been established.
On the plus side, the team has
made good progress in making
additional capacity available from
our existing portfolio of generation
assets. We have lifted maximum
capacity for each of the six Benmore
units from 90MW to 95MW and
from each of the seven Manapōuri
units from 125MW to 128MW. These
enhancements add a capacity to
our generation portfolio that is
similar to that of a a mid-sized
wind farm, at a fraction of the cost.
Sustainability is hardwired
into how we work and plan
As the largest 100% renewable
energy company in Aotearoa,
sustainability has always been core
to who we are and how we operate
our business. We introduced
our overarching Sustainability
Framework this year and continued
to focus on our Climate Action Plan,
which includes ambitious targets
for renewable electricity generation
growth, customer decarbonisation
and managing our own resilience
and emissions. This is a team effort
and one that also requires us to
work with communities, customers
and sector peers. Whether we're
working on material actions or
small details, we continue to
challenge ourselves to take a lead
where it counts to support New
Zealand and New Zealanders’
transition to net zero by 2050.
It was pleasing to see our
sustainability efforts recognised
once again this year, as we were
named in the Kantar Better Futures
Report as one of New Zealand’s
most sustainable companies.
A great example of sustainability
leadership is our approach at our
Harapaki wind farm development.
We estimate we have avoided
construction-related emissions
of between 15,000 and 20,000
tCO2eq through on-site actions
during construction and the
reduction in embodied carbon
from the design stage. We have
created dedicated sustainability
roles and we continue to build
intellectual property that will
benefit this and future projects in
our pipeline.
We continue to make great progress
on Forever Forests, our afforestation
programme, which is sized to
sequester our remaining operational
GHG emissions after our Half by
30 targets have been achieved. We
currently have around 1,214 hectares
of land in the programme and
around 300,000 trees. We remain
on track to have 700,000 trees in
the ground by next financial year.
The Forever Forests programme
is utilising an innovative mixed
planting model that ensures we can
sequester carbon quickly through
initially planting exotics but over
time filling out with natives,
ultimately leaving a native forest
legacy (hence the name).
Alongside our sharp focus on
emission reductions and renewable
electricity growth, we’ve taken steps
to invest in projects that contribute
to biodiversity values, noting that
the scope of sustainability requires
us to think intelligently about what
we can do to manage environmental
and social impacts as a result of our
operations. As mentioned earlier,
we have significantly increased
our support for Aotearoa’s longest-
running conservation programme
(Project River Recovery), and as
part of our reconsenting mitigation
we are working more closely with
local rūnaka to improve cultural and
social impacts for mana whenua
in our largest hydro catchment –
the Waitaki. Through our Nature
Positive commitment announced
this year, we will continue to explore
what a meaningful contribution to
biodiversity looks like into the future.
Continuing to attract
talented people
The rate of change in our industry
is only speeding up and our ability
as a business to anticipate and
lead change whilst delivering
relevant solutions for our customers
is all down to our people and
our culture. We’ve invested a lot
of time and effort into ensuring
that Meridian offers an attractive
employee experience to ensure
we continue to attract and retain
talent. Our Belonging Strategy is
aimed at building on our diversity
and encouraging a true sense of
belonging that defies ethnic,
belief and gender constraints. We
introduced a Te Ao Māori strategy
during the year to help lift the
overall cultural capability of our
people and support us to better
recognise Māori values in how we
operate, attract and retain Māori
in our workforce.
Remuneration and benefits
obviously have a part to play, and
with this in mind during the year
we refreshed our benefits package,
adding some important new
features such as health insurance for
all staff and wellbeing leave.
We also believe we have effectively
normalised hybrid ways of working
and, in doing so, enhanced
productivity across the company.
Teams and cultures evolve, and
Meridian has plenty to work on
before we can say we’ve got the
ideal team mix from a diversity
perspective, but we are making
progress. We were pleased to
see a 30% increase in those who
identify as being of Māori origin
in our workforce, and our overall
gender balance remains healthy.
However, we acknowledge that
we still have work to do in terms
of encouraging more women into
parts of our business that have
historically been male dominated
and providing support and
encouragement for more women
to take on more leadership roles
within the Group.
◄ Raewyn Goessi, Health, Safety and Security Manager, Harapaki Wind Farm, Hawke's Bay.
31
CHAIR AND CEO REPORTMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
R
O
P
E
R
O
E
C
D
N
A
R
I
A
H
C
Keeping our people
safe from harm
Changes at
Executive Team level
In the years ahead, as we accelerate
our construction programme, we
are committed to managing the
safety risks for our people, and in
doing so we remain committed to
working alongside other sector
safety groups. This year we have
reviewed and rebuilt our under-
standing and controls to manage
critical risks. We have continued to
evolve our response to harm with
new training protocols and more
holistic software to complement
our Learning Teams and safety
systems. Beyond physical safety,
we’re committed to protecting
our people’s mental health
through our Care Teams.
We ended the year with a
calculated total recordable injury
frequency rate for employees and
contractors per 200,000 hours
worked of 1.76 (compared with
1.58 in FY22), which compares
well with industry averages.
The Executive Team has proved to
be a stable and productive team
in the past year.
Nic Kennedy, CEO of Flux, now
reports to an independent board
as we want to accelerate growth
in that business. Nic remains a
key member of the executive
talent at Meridian.
Changes at Board level
We continue to advocate balanced
and diverse views at Board level
to oversee Meridian’s strategy and
guide the business through the
years ahead. Graham Cockroft and
David Carter are both experienced
business leaders who joined the
Board as Non-Executive Directors.
We also welcomed Benjamin
Bateman (Ngāi Tahu) as our next
Future Director.
We said goodbye to longstanding
Director Jan Dawson at our last
Annual Shareholders’ Meeting
(ASM), and we will farewell Mark
Cairns at our upcoming ASM. Our
thanks to Jan and Mark for their
guidance and leadership while
they were with the Board.
The Board is confident that the
business can meet the current
decarbonisation programme and
continue to deliver dividends
for investors for the foreseeable
future. This year’s final ordinary
dividend of 11.90 cents per share,
up 3% from the previous year,
brings the total ordinary dividends
declared in FY23 to 17.90 cents
per share, also up 3% from the
previous year. The Dividend
Reinvestment Plan remains
available for those investors
wishing to take advantage of it.
S&P Global Ratings has recently
reaffirmed Meridian Energy’s
corporate credit rating as ‘BBB+’/
Stable/A-2.
A strong financial result
Despite a range of weather
challenges, healthy generation
numbers and further overall
growth in retail sales and volumes,
ensured a very strong financial
result. We reported a net profit
after tax of $95 million for the
year ended 30 June 2023, the
result was heavily influenced by
-$375 million net change in fair
value of energy hedges. EBITDAF
of $783 million was up $74 million
or 10% on the prior year. Under-
lying net profit after tax (which
is a non-GAAP measure)2 for
the Group was also up 35%
at $315 million.
The sale of our Australian
operations in January 2022
significantly strengthened our
balance sheet. We now have
investment capacity to support
our renewable generation and
Southern Green Hydrogen
Project growth strategies.
3 2
2 Net profit after tax adjusted for the effects of changes in fair value of unrealised hedges, electricity option premiums and other non-cash items and their tax effects. Underlying net profit after tax is a non-GAAP financial measure.
The time is now
Decarbonising the New Zealand
economy will take collective effort
and will create a competitive
advantage for our country. Our
commitment to growing renewable
electricity generation and delivering
innovative energy solutions for our
customers will help many Kiwis
to contribute meaningfully to the
permanent changes required. Long-
term partnerships with iwi, industry,
customers and communities will
enable us to build a clear pathway
and a shared future. None of us
should downplay the challenges,
but our strategy is clear, our pipeline
is robust, the opportunities are
exciting, and urgency is a powerful
motivation. We are better placed
to support Aotearoa’s transition
to a low-carbon society than we
have ever been.
On behalf of the Board and the
Executive Team, thanks to our
customers, our partners and our
investors and to everyone in our
team for your hard work. Together,
you are helping us advance our
purpose to deliver clean energy
for a fairer and healthier world.
Proposed layout for our BESS project ►
at Ruakākā, near Whāngarei.
▼ BESS Platform
◄ Electrical Switching Station
◄ O&M Building and Warehouse
◄ Firewater Storage Tank
3 3
CHAIR AND CEO REPORTMERIDIAN INTEGRATED REPORT 2023 Right
for
nature
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
3 4
We’ve increased
our focus on nature
and biodiversity
with a new nature-
positive ambition.
◄ The Godley River delta, running into Lake Tekapo.
3 5
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
3 6
Our
commitment
Decarbonisation is a shared responsibility. Bottom-line, doing
right by our environment and resources is the best way for
us to do business. To that end, we make conscious decisions
on what we use and what we support. Ultimately of course,
we’re challenging ourselves to be as circular as possible.
In this section:
• A change in the weather
• Preserving water quality
• Hydrology this year
• Broadening our commitment to nature and biodiversity
• Law and regulations compliance
• Fully scoping our emission reductions
• Aiming for best disclosure on emissions
• Thinking full circle
• A new standard for sustainable infrastructure development
• Forever Forests continues to grow
• Sharing our views on policy and regulatory changes
• Our impacts anchored in the natural world
• Cleaner than ever
A change in the weather
Intense weather events throughout the country
have been strong reminders that the conditions
in which we operate are continuing to change.
Increases in the volumes of rain events, for
example, are making our inflows more volatile,
while dry conditions elsewhere are a reminder
that these shifts in weather conditions are going
to affect different parts of our operation in
contrasting ways.
In the case of our hydro assets, the size of our
lakes doesn’t change, but what feeds them –
rain and snow melt – are changing over time.
That affects how we operate, and of course
how prices are formed in the electricity market.
This year, as happens in most years, it also
required us to spill water.
Meanwhile, at developments like the Harapaki
wind farm our crews have been dealing with
severe weather that has delayed their work and
caused massive damage across whole regions.
Our team have done a remarkable job in
keeping the project delays limited to the
◄ Lake Manapōuri, Fiordland.
effects of Cyclone Gabrielle alone, given
the number of weather challenges prior.
systems mean they’re affected by sediment and
the proliferation of algae and invasive weeds.
None of these emerging challenges should
be surprising. New Zealanders have known for
some time that climate change will significantly
affect their lives. Meridian will continue taking
actions to reduce gross emissions that we
create, and we must adapt to what’s
happening and continue to introduce greater
flexibility and diversity to our energy capacity.
Preserving water quality
New Zealanders have strong feelings about
water and how it’s used. They’re concerned about
water quality and availability, who owns and has
access to water, and whether the infrastructure
is being managed properly. Maintaining water
quality and ensuring that standards in our
catchments are clearly defined and complied
with is something we take very seriously.
To keep waterways as clean as possible, we
look to release flushing flows into these rivers
regularly to break off weed growth. Our ability
to deliver these flushing flows currently requires
works on the river channels. For example,
there is a specific problem area upstream of
the Manapōuri lake control structure, where
sediment has accumulated to the point where
it compromises our ability to release flushing
flows effectively. Our Dam Safety Intelligence
team were commissioned to advise us on the
best approach to remedy this. Using lidar survey
equipment, their assessment of the channel
depth and water volumes necessary to deliver
flushing flows is that up to 300,000 cubic
metres of material needs to be removed to make
flushing flows more effective while keeping the
lakeshores and water quality as they should be.
Hydro generation doesn’t change the
composition of water. However, certain land uses
in the catchments of the Waiau and Waitaki river
Our day-to-day use of water at Lake Manapōuri
is controlled by resource consent conditions
that include ongoing monitoring and reporting
37
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 requirements. If our current or
planned activities have, or could
have, any impacts on freshwater
quality, our resource consent
conditions and stakeholder
agreements provide guidance
on how those impacts are to
be managed.
We discharge fresh water from
the Manapōuri Power Station into
Deep Cove, in accordance with
the resource consent conditions
mentioned above, and undertake
regular marine environment
monitoring and reporting. In the
50 years in which the station has
been running, the area closest to
the tailrace has become largely
fresh water. Otherwise, there have
been only slight changes to an
environment that naturally has
high freshwater inflows. Overall,
the Doubtful Sound marine
environment remains very healthy.
We continue to work closely with
regional councils to monitor the
potential for erosion in the lower
Waiau and Lower Waitaki Rivers,
to review our operations in the
event of unexpected impacts
and to minimise the risks of
any contaminants entering
waterways from our stations.
It’s up to the Regional Council to
develop a catchment plan that sets
standards for water quality and
freshwater management for the
Waiau catchment. The proposed
plan (Plan Change Tuatahi) will need
to be lodged with the Office of
the Chief Freshwater Commissioner
by the end of 2024. Any decisions
will set the framework for the
subsequent reconsenting of
the Manapōuri power scheme.
Reconsenting of the Manapōuri
scheme needs to be completed
prior to consents expiring in 2031.
Z
N
o
r
d
y
H
Z
N
d
n
W
i
U
A
d
n
W
i
Z
N
d
n
W
i
Z
N
o
r
d
y
H
U
A
o
r
d
y
H
1,202
12,701
Hydrology this year
Generation (GWh)
1,465
12,758
1,285
12,271
1,395
11,297
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
FY20*
FY21*
FY22
FY23
* Waitaki Power Station total generation capacity updated following restoration.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
3 8
Capacity (MW)
416
2,353
416
2,353
416
2,353
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Z
N
o
r
d
y
H
Z
N
d
n
W
i
416
2,353
Water consumption*
Mm3
FY19
FY20 FY21***
FY22
FY23
Fresh surface water (lakes, rivers)
74,183 85,339 66,659
76,523
81,431
Water returned to the source of
extraction at similar quality
61,832
72,994 54,994 65,535
70,772
Total net freshwater consumption**
12,351
12,345
11,665
10,988
10,659
* Municipal water consumption not reported as minimal and not metered. Flows though hydroelectric
turbines are calculated based on the machine ratings using headwater level, tailwater level and machine
power (MW). Unit of measurement in MM3 is used to ensure precision of data is accurately represented.
** Fresh water taken from Lake Manapōuri is released into Doubtful Sound, a marine environment,
and is not altered in terms of water quality
*** Restated to correct for subsequent NIWA quality assurance of data for Lower Waiau flow.
Additional 225 to both fresh surface water and water returned to the source of extraction.
Total net fresh water consumption not affected.
Plant availability
%
Hydro
Wind
FY19
FY20
FY21
FY22
FY23*
91.6
88.9
91.1
88.9
91.0
83.3
89.8
89.0
86.3
86.6
FY20*
FY21*
FY22
FY23
* Waitaki Power Station total generation capacity updated following restoration.
Outages for FY23 – Hydro: maintenance 6,370.87 hours, planned 7,317.59 hours, forced
15,809.8 hours; Wind: planned (including maintenance) 11,896 hours, forced 926 hours.
*
Availability is now time-based not production-based.
3 9
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
4 0
Broadening our commitment
to nature and biodiversity
Action on climate change is critical
as is the action needed to reverse
nature loss and restore biodiversity.
We’ve increased our focus on
nature and biodiversity with a new
nature-positive ambition. Building
on the environmental commitments
we’ve made and the actions we
take today, we have plans to pilot
new nature-based frameworks and
advance identified new biodiversity
initiatives in the coming year.
We note the global work being
undertaken by the Taskforce on
Nature-related Financial Disclosures
and the progress in science-
based targets for nature. Locally,
Te Mana o te Taiao, the Aotearoa
New Zealand Biodiversity Strategy,
sets out a strategic framework for
the protection, restoration and
sustainable use of biodiversity.
In the past year, cross-business
teams within Meridian have been
identifying how we can incorporate
a biodiversity strategy into how we
work to complement our position
as a sustainability leader. We also
recognise the opportunity to learn
from and reflect the aspirations
of iwi and mana whenua in this
work, with mātauranga Māori and
their own connections with nature.
We’re very excited about taking
our next steps to advance our
practical choices and realise our
nature-positive ambition.
Biodiversity is an issue that’s close
to home – literally. The catchments
and other environments in which
we operate and develop renewable
generation contain or are in ‘close
proximity’ to ‘critical biodiversity’ or
‘critical habitats’. So, not surprisingly,
we already do a lot to ensure that
nature, including biodiversity, is top
of mind for our people:
• We’re committed to contributing
to the United Nations Sustainable
Development Goals with a focus
on Climate Action, Responsible
Consumption and Production,
Life on Land, and Clean Water
and Sanitation.
•
In order to minimise any negative
impacts of our operations on
biodiversity, we comply with
all environmental legislation,
including all resource consents
that we have.
• We undertake Fatal Flaw
Analyses of all new land
prospects to identify and avoid
intolerable impacts on critical
biodiversity or critical habitats
where practicable.
• We monitor native bat and
falcon populations near our
sites at specific times.
• We undertake predator reduction
work to protect the habitat of
New Zealand’s native falcon.
• We register covenants over
land to protect ecological
plantings and wetlands. For
example, we've added 110
hectares to the 40 hectares of
red tussock already protected
at our White Hill wind farm.
•
We report to specialist statutory
guardians who are appointed
to oversee our operations and
environmental outcomes at
Lakes Manapōuri, Monowai
and Te Anau.
As a next step in our bid to include
biodiversity considerations in
everything we do, this year we
publicly declared our new No
Net Deforestation Commitment
for our operations (excluding
wilding conifers), and updated
our Biodiversity and Deforestation
Commitment as a result.
Our co-funded Project River
Recovery is Aotearoa’s longest-
running conservation business
partnership. For more than 30
years, Project River Recovery has
been preserving and restoring
braided river habitats in the
upper Waitaki catchment through
predator and weed eradication.
This year, as part of discussions on
the renewal of our partnership with
DOC, we’ve agreed to increase our
support significantly. Historically,
this work has helped to protect
the endangered black-fronted
tern/tarapirohe and black stilt/
kakī colonies and increase their
populations, as well as increase
wetland areas. The new funding
arrangements will allow this work
to expand dramatically.
In the Waiau catchment we
continue to work closely with the
Waiau Fisheries and Wildlife Habitat
Enhancement Trust to enhance
stream and wetland habitats for
fisheries and wildlife.
We support and fund the migration
of elvers and migrant eels across
our dam structures in both of
our hydro catchments every year
through our elver trap and transfer
programme, under the guidance
of Ngāi Tahu.
We note with great sadness the
passing of Bubba Thompson, a
rangitira of Awarua. Bubba and
his wife Gail worked with us
for many years and we wish to
acknowledge the relationship
with each of them and the deep
respect that we have for their
knowledge and understanding of
the Waiau catchment. Among his
many achievements, Bubba was
involved with the elver transfer
programme for a decade.
We honour his memory.
As part of our partnership with
Te Waiau Mahika Kai Trust, we’ve
been developing a carbon forest to
deliver carbon sequestration. This
year, through Forever Forests, we’ve
undertaken new planting at the
Trust’s Te Kōawa Tūroa o Takitimu
property as the trust restores the
site to provide mahika kai resources.
Our successful partnership with
DOC and Ngāi Tahu to support
the Kākāpō Recovery Programme
has also continued. We renewed
the arrangement this year. Our
involvement helps to fund research
and initiatives relating to genetics,
nutrition, disease management and
finding new sites. During the 2023
breeding season 55 chicks fledged.
There are now 248 known birds,
double the number that existed
when we first signed as a partner
in 2016.
Law and regulations
compliance
There have been no significant
instances of non-compliance
with laws and regulations and
we’ve paid no fines during the
reporting period.
Meridian staff help release 42 endangered kakī/black stilt ►
at the Tasman river near Aoraki/Mount Cook, as part of PRR.
41
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
4 2
Fully scoping our
emission reductions
Decarbonisation is a day-to-day
priority for us. As a major Aotearoa
New Zealand company, publicly
listed and with more than 1,000
people in our workforce, we’re
determined to lead by example.
The doubling of our development
pipeline options and constructing
projects in parallel in the past year
is the most visible sign that we
mean business.
Our Climate Action Plan is a
delivery-focused plan with three
priority areas: renewable generation;
customer decarbonisation; and
managing our emissions and
ensuring resilience. This year’s
plan refresh has a greater focus
on climate change adaptation
actions, outlines actions to minimise
one-off construction emissions,
and highlights our increased
commitment to offset 100% of our
business emissions. We’ve been
carbon neutral in our operational
emissions for a number of years,
and our commitment to offsetting
emissions now includes emissions
from new construction activities.
This year we’re also reporting on
how we’ve performed against our
FY23 targets and milestones, and
what we’re doing to build on our
climate action momentum in FY24.
This includes reporting on our Half
by 30 initiative, through which we
aim to halve our gross operational
scope 1, 2 and 3 emissions by
FY30 on an FY21 baseline.
We’re encouraged by the
progress we see around us. The
Government’s actions in the area
of transport and the bolstering
of the Government Investment
in Decarbonising Industry (GIDI)
Fund are helping to build good
momentum for change. The
signing of a major demand-
flexibility agreement with
New Zealand's Aluminium
Smelter (NZAS), the take-up of
our Certified Renewable Energy
product and strong interest
among our customers and
other businesses in process
heat conversion to electricity
and commercial solar show that
businesses are keen to engage.
The expansion of our Zero EV
charging network and our charging
solutions for homes and businesses
will also enable households to
play their part.
An important development last
year was the establishment of the
Energy Innovation Team within
our retail business. The team is
now actively working on solutions
to help our customers decarbonise,
from helping to deploy charging
infrastructure, to helping create
value from demand flexibility, to
electrifying process heat. We look
forward to continuing to report on
its progress.
Within our own business, and
alongside our development
programme, we’re working hard
to embed decarbonisation into
what we prioritise and measure for
success throughout our business,
and how we rethink our business-
as-usual activities to make them
less carbon intensive, more circular
(and therefore less wasteful) and
more accountable in terms of our
climate-related goals.
Over 95% of our GHG emissions
are scope 3 emissions that occur
in our supply chain. Essentially,
these emissions are beyond our
direct control, coming mainly from
goods and services we purchase
and emissions associated with
subleased farms in close proximity
to our assets.
Our supply chains vary, depending
on the parts of the business. Local
and global suppliers provide our
generation business with parts and
components to build and maintain
our generation assets. We also
work with general engineering
consumable and specialist parts’
suppliers, and providers of
services such as ICT (information
and communications technology)
and facilities’ management. In
contrast, we have a very short
supply chain in our retail business
because the physical assets used
to distribute electricity and meter
its use are managed by national
and local lines and metering
companies. Our retail operation
and corporate requirements
“
Within our own
business, and along-
side our development
programme, we’re
working hard to embed
decarbonisation into
what we prioritise
and measure for
success throughout
our business...”
include physical facilities and ICT,
sales and marketing, billing and
governance functions.
In FY23 our operational emissions
were measured at 33,463 tCO2eq.
In 2022 the Science Based Targets
initiative validated our near-term
and underlying Half by 30 targets:
to reduce absolute scope 1 and 2
GHG emissions by 50% by FY2030
from a FY2021 base year, and to
reduce absolute scope 3 GHG
emissions by 50% within the
same timeframe.
Our direct scope 1 emissions are
primarily driven by combustion
boat emissions from road transport
at Manapōuri and travel from
within our own fleet and from
rented vehicles. We now have a
100% light-vehicle fleet and are
making good progress towards our
2025 goal of completely replacing
the internal-combustion-engine
utility vehicles used by our hydro
and wind asset maintenance teams
when manufacturers make them
available in New Zealand.
Adopting the market-based
approach for electricity
consumption and scope 2
emissions, our reported emissions
continue to be near zero. That’s
because we’ve matched our
consumption to renewable energy
production from Meridian’s
assets using Renewable Energy
Certificates issued by the New
Zealand Energy Certificate System.
A significant addition last year
was an Internal Decarbonisation
Fund. Backdated to FY20, when
Meridian first used Renewable
Energy Certificates for our market-
based scope 2 emissions reporting,
the fund enables us to ‘charge
ourselves’ the equivalent net
revenue that our customers pay
per Renewable Energy Certificate.
The ring-fenced proceeds are
then used to fund additional
decarbonisation projects within
Meridian’s operational emissions
boundary – contributing to our
Half by 30 goal. This internal fund
aligns with the design and purpose
of our Certified Renewable Energy
product, where we reinvest the net
proceeds of customer-purchased
Renewable Energy Certificates
into business or community-based
decarbonisation projects. The total
Decarbonisation Community Fund
contribution to date is $333,000
to advance decarbonisation and
energy efficiency projects that
might not yet have occurred.
The key achievements in our scope
3 emission-reduction work last
year included the completion
of decarbonisation initiatives at
salmon farms in our canals, and the
launch of a new emission-reduction
package for commuting staff.
To encourage Meridian staff to
play their part in reducing both
their personal emissions and ours,
we’re looking at introducing staff
incentives to reduce emissions
through gamification, a points
system and rewards for low-carbon
commutes and using e-bikes.
In delivering these initiatives we’ve
adopted a human-centred design
4 3
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 Fully scoping our
emission reductions continued
approach to ensure the measures
are fair and accessible for everyone.
At the same time, we’re encouraging
people to think about whether they
need to travel, and have given them
access to an air travel calculator so
they can see the carbon they could
save. These changes extend all the
way to our Board.
So far in our emission-reduction
journey, there have been a number
of key learnings. We know that
Half by 2030 won’t be a linear
progression. There’ll be periods
when progress is slow as we make
changes within our wider supply
chain, and there’ll be times when
that groundwork pays off and we
see noticeable gains. This year, for
example, we’ve made significant
gains internally to advance our Half
by 30 agenda, with the emission-
reduction results of these initiatives
to come in future years – such as the
achievement in having a business
case approved to electrify the ferry
used to get our staff and contractors
to and from Manapōuri Power
Station. Finally, while we have
some major initiatives in play to
reduce our emissions, including
good progress with our resource
consents at Mt Munro and Ruakākā,
the real key to effective emission
reductions lies in doing lots of
smaller things, and doing them
well. Effectiveness, in other words,
is cumulative rather than dramatic,
and involves a number of parties.
Our Supplier Code of Conduct
encourages our suppliers to take
climate actions that would work
for their businesses and enable
us to help New Zealand become
a net-zero-carbon country in
2050. This year we commenced
a supplier carbon engagement
programme to understand how
we can help suppliers to measure
and reduce greenhouse gases.
Doing this will be a win-win for
Meridian and our suppliers.
We now record 100% of GHG
emission data from all suppliers and
contractors at our developments.
Monthly reports let us see where
current emissions are trending and
we also track these annually and for
the duration of projects. We’ve been
doing this at the Harapaki wind
farm for two full years, and for three
months at Ruakākā Energy Park.
All contractors are required to let
us know what they’re doing on site
to reduce their emissions through
scope-specific Sustainability
Management Plans, and the details
are recorded in the project registers.
All contractors must also provide
a dedicated sustainability staff
member on site.
The Meridian Group Half by 30
roadmap in our Climate Action Plan
includes six areas of focus, covering
all three scopes of activity and three
horizons, with targets that together
form our plan to deliver on our
Half by 30 commitment. See our
Climate Action Plan for detail of our
progress in these six areas.
Our analysis of the emissions
associated with major maintenance
projects and the one-time
construction of renewable
generation assets shows that
those activities have the potential
to generate as many emissions as
our current operational activities.
Recognising this, we’ve now built
active emission reductions into our
project plans for the Harapaki wind
farm and Ruakākā development.
These emissions are managed and
minimised through project-specific
metrics for each development based
on the specific challenges and
opportunities at a site. For example,
our Sustainability Management Plan
at the Harapaki wind farm requires
all parties to report on emissions
and to meet key performance
indicators (KPIs) for continuous
improvement initiatives. So far,
through thinking about sustainability
issues at the design stage and
implementing more sustainable
practices on site, we estimate that
the Harapaki team has reduced the
overall emissions by between
15,000 and 20,000 tCO2eq.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
4 4
Climate Action Plan
Our
purpose
Meridian’s purpose of Clean energy for a fairer and healthier world is at
the centre of everything we do on our journey to a resilient, net zero future.
Our
priorities
Renewable
generation
Customer
decarbonisation
Managing our emissions
and ensuring resilience
Our key
initiatives
Renewable energy
development pipeline
Creating a pipeline of grid-scale projects
ready for construction. First horizon ̒7x7’
focused on 7 projects in the 7 years to 2030.
Construction of new generation assets
Beginning with Harapaki wind farm, we’re
building new assets to increase supply from our
existing 100% renewable energy asset base.
New opportunities – hydrogen
Advancing a new partnership opportunity to
develop a green hydrogen centre to support
decarbonisation in Aotearoa and abroad.
Process heat
Helping businesses replace fossil fuel boilers
with electrode boilers and heat pumps.
Electric vehicles
and charging network
Making it easier for NZers to drive electric.
Demand flexibility
Playing our part in creating a more flexible
energy system that enables smarter use of
electricity and widespread electrification.
Construction emissions
Reducing emissions as we build new generation
assets, and our new offsetting commitment.
Half by 30*
Our science-aligned gross emission-reduction
target for Scope 1, 2 and 3 operational emissions.
Halving total emissions by FY30 on a FY21 baseline.
Forever Forests
Our nature-based response to grow a permanent,
and over time 100% native, emissions sink.
Climate risk and adaptation
Our continued commitment to assess and manage
our climate-related risks, including adaptation.
These key initiatives align with our commitment to contribute meaningfully to the United Nations (UN) Sustainable Development Goals (SDGs) where we can have most impact – such as SDG13 Climate Action.
See our Sustainability Policy for further detail. Where we can’t reduce our operational emissions right now, we offset using Gold Standard Verified Emission Reductions and have done since FY19.
* Meridian’s operational emission boundary includes all Scope 1, 2 and 3 categories, excluding all one-time construction emissions from major projects and all activities that are capitalised as part of renewable
energy projects. From our FY21 baseline (excluding Meridian Australia).
4 5
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023
\
Emissions progress
Meridian Group GHG emissions
tCO2eq
Scope 1
Scope 2
FY21
1,020
14
FY22
643
2
FY23
1,191
2
Scope 3 operational
29,557
32,224
32,270
Total Group operational emissions*
30,591
32,869
33,463
Scope 3 one-time construction and upgrades
284
Total Group value chain emissions**
30,876
8,242
41,111
14,295
47,758
* Meridian’s operational emission boundary includes all scope 1, 2 and 3 categories, excluding all
one-time construction emissions from major projects and all activities that are capitalised as part
of renewable energy projects. Our FY21 baseline and FY22 emissions were restated in FY23 due
to a change in emission factor source for purchased goods and services
** Group emissions are offset, using Gold Standard Voluntary Emissions Reductions (GS VERS) after
taking into account credits cancelled by suppliers against their own emissions.
Meridian’s generation emissions intensity is 0 (tCO2eq/GWh of total generation). As a generator
of 100% renewable energy, the fuel source for the electricity generated has no emissions.
FY23 Total operational GHG by scope (tCO2eq)
Scope 1: 1,191 (4%)
Scope 2: (market based): 2 (0%)
Scope 3: 32,270 (96%)
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
4 6
Aiming for best
disclosure on climate
The Government requirement
for all listed companies to publicly
disclose their climate-related issues
is one we welcome. We’ve been
voluntarily preparing Climate-
related Disclosures since 2019
because, as a company publicly
committed to decarbonisation,
we consider it a vital part of
holding ourselves responsible
to stakeholders.
The Task Force on Climate-related
Financial Disclosures framework
has served as a robust way to
show our progress in governance,
risk management, strategy and
our climate-related metrics and
targets. Still, we believe we can go
further. We aimed to substantially
voluntarily align our FY23 Climate-
related Disclosure with the
Aotearoa New Zealand Climate
Standards, released last year,
ahead of our first full compliance
year in FY24.
We continue to measure and
publicly report on our full value chain
emissions. Our FY23 GHG emissions
inventory, including data sources
and quantification methodology,
has been independently assured
to a reasonable level against the
requirements of ISO 14064-1:2018,
the Greenhouse Gas Protocol and
the Corporate Value Chain Standard.
Building on our Climate-related
Disclosures and publicly available
Biodiversity and Deforestation
Commitments, this year we plan to
pilot the adoption of the Taskforce
on Nature-related Financial
Disclosures’ framework, which has
the potential to enable us to have
more holistic impacts on nature.
The changes linked to these new
disclosures don’t stop there. As part
of a change programme to further
build our climate-related disclosure
expertise, we’ve made important
changes to our risk-assessment
methodologies, and refreshed
our climate scenarios in our latest
Climate-related Disclosure.
For more details on what we’re
disclosing, refer to Climate-related
Disclosures and Greenhouse Gas
Inventories on our website.
\
Progress against our Half by 2030 goal (tCO2eq*)
60,000
50,000
40,000
30,000
20,000
10,000
0
e
t
s
a
W
l
e
v
a
r
T
r
i
A
e
g
r
a
B
&
y
r
r
e
F
s
m
r
a
F
t
r
o
p
s
n
a
r
T
d
n
a
L
s
n
o
i
s
s
i
m
e
p
u
o
r
G
s
n
o
i
s
s
i
m
E
e
v
i
t
i
g
u
F
s
n
o
i
s
s
i
m
E
e
c
n
a
l
a
B
t
e
g
r
a
t
n
o
i
t
c
u
d
e
R
7
4
4
2
4
,
7
5
7
0
4
,
9
6
8
2
3
,
3
6
4
3
3
,
1
9
5
0
3
,
9
1
Y
F
0
2
Y
F
1
2
Y
F
2
2
Y
F
3
2
Y
F
4
2
Y
F
5
2
Y
F
6
2
Y
F
7
2
Y
F
8
2
Y
F
9
2
Y
F
0
3
Y
F
* Meridian’s operational emission boundary includes all scope 1, 2 and 3 categories,
excluding all one-time construction emissions from major projects and all activities
that are capitalised as part of renewable energy projects. Our FY21 baseline and
FY22 emissions were restated in FY23 due to a change in emission factor source
for purchased goods and services.
Thinking full circle
A circular economy approach
focuses on minimising the amount
of finite resources consumed for
economic activity by ensuring
that materials have their integrity
maintained and circulated within
the economy for as long as possible.
As part of our zero waste ambition,
we’re looking to embed a framework
in the business that will enable us
to shift from the traditional ‘linear’
way of working to a ‘circular’ way of
thinking that seeks to optimise the
circulation of resources and avoid
unnecessary consumption and
the creation of waste.
As a large generator, developer
and retailer of energy, Meridian
produces waste at our assets, at
our construction sites and at our
corporate offices. We’ve identified
our material waste impacts to be:
reducing waste from the operation,
maintenance and repowering of our
assets; leading and demonstrating
best practice when it comes to
constructing new renewable
assets; and ensuring that our
corporate offices promote a
culture that supports the
shift to a circular economy.
Overall, Meridian is committed to
being a sector leader in advancing
and/or implementing circular
solutions for the materials and key
items we use in and at our assets.
Our ambition is for zero waste
when operational assets (such as
solar panels, batteries, turbines,
concrete and metals) reach the end
of their useful lives.
We are also committed to
demonstrating best-practice waste
management on our construction
sites and corporate offices by
targeting zero waste to landfill.
Waste at our assets
The operation and maintenance
of our generation assets makes up
19% of our total waste emissions
(including landfill and recycling).
The majority of this waste currently
comes from hydro. Towards the
end of the decade we’ll begin
a repowering programme that
involves upgrading our wind assets
as they come to the end of their
design lives. This will start with our
Te Āpiti wind farm where we know a
range of decommissioned materials
(such as wind turbines) will need
end-of-life solutions.
47
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023
Waste at our assets continued
Although further analysis is required
to properly map and understand
generation waste inputs, outputs
and impacts, we know that asset
components are difficult to reuse or
recycle as a result of their complex
electrical, mechanical or structural
properties. What’s more, receiving
accurate reporting from contractors
on the kilograms of waste sent to
landfill or being recycled remains
an ongoing challenge (especially
in our more rural areas).
We are proud to have found
creative end-of-life solutions for
our filters and our hydraulic hoses
and we are excited about a future
pilot that will explore the potential
of pressing oil out of oily rags. It
should be noted that although
this pilot will potentially help us to
optimise the recycling of oil, the
flammable properties of the rags
themselves mean these will still
need to be disposed to landfill
as hazardous waste.
Waste at our
construction sites
Waste at our
corporate offices
Meridian has an ambitious
pipeline of renewable energy
asset construction for the next
decade and beyond. That’s why
it’s important that we decouple the
growth in our construction from
growth in our waste production
and its associated emissions.
Construction waste makes up
73% of our total waste emissions
(including landfill and recycling).
This year we released our first
Sustainable Infrastructure
Framework to support sustainability
practices on major construction
projects. Where waste is identified
as a material impact, it requires
those responsible for major
projects to estimate, identify and
implement initiatives to ensure that,
where possible, waste is designed
out and that the sustainable use
of resources is optimised –
following the avoid, reduce,
re-use, recycle hierarchy.
Our corporate offices are where
our people gather in the largest
numbers daily. Although our waste
creation at these offices is low in
comparison to that at our assets and
construction sites (8% of our total
waste emissions including landfill
and recycling), we want to ensure
that our offices fully demonstrate
the best-practice commitments
and decision-making processes
we adhere to on waste. In FY24 we
will be launching a pilot of Method
InSight bins – this will allow us to
receive improved real-time waste
data and to analyse waste trends
in our participating office.
Hazardous waste
Being 100% renewable, Meridian
produces only incidental amounts
of hazardous waste across our
generation assets, construction
sites and corporate offices. Of
the incidental amounts we do
create, the key outputs include
asbestos (from demolishing old
infrastructure), contaminated
soil and oily rags (from spills at
generation and construction sites),
and other hazardous flammable
waste (including household items
like paints, thinners etc).
In FY23 Meridian went deeper into
completing a waste stocktake. In
all situations, hazardous material
management and disposal is
handled by an accredited third
party. However, the exact reporting
of the kilograms of hazardous
material landfilled and recycled
remains as an area for improvement.
All sites have hazardous waste
guidelines, dictated by our Safety
and Health Guidelines. Hazardous
substances and materials must be
clearly identified, and Safety Data
Sheets (SDSs) must be supplied.
Materials must be handled,
stored and disposed of in the
approved manner as specified
in the SDSs, and Hazardous
Inventory Tracking Sheets need
to be updated as required. All of
these steps mitigate the risk of
any hazardous waste leaking
into the environment.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
4 8
\
Waste*
Disposed
Metric tonnes
Non Hazardous
Total disposed – non-hazardous
Hazardous – non-flammable**
Hazardous – flammable**
Total disposed – hazardous
FY20
FY21
FY22
FY23
703
703
–
–
–
1,295
1,295
–
–
–
710
710
2
–
2
576
576
6
50
57
Total disposed
703
1,295
712
633
Recycled or reused
Cable
Cleanfill
Commingled
Organic
Paper and card
Scrap metal
Timber
–
–
18
11
104
–
–
Total reused/recycled – non-hazardous
133
Hazardous
Total reused/recycled – hazardous
Total reused/recyled
Total waste generated
–
–
133
836
–
–
38
9
79
96
–
222
10
10
232
1,527
–
654
53
11
11
2
–
731
28
28
759
1,471
9
6,610
1,678
6
16
6
1
8,326
14
14
8,340
8,973
* Data sourced from waste contractor reporting and invoices and is reported in metric tonnes.
Where applicable evidence-based estimates are used. We expect to see reporting improvements
that will limit the requirement for estimates in future. All figures reflect onsite recovery operations.
** We began reporting hazardous waste disposed separately from general waste disposed in FY22.
Disposal by incineration data currently unknown.
Energy
Meridian is committed to generating only 100% renewable energy and to
the purchase of Renewable Energy Certificates in respect of the electricity
we consume. We calculate that our current electricity consumption is greater
than 99% matched with the purchase of Renewable Energy Certificates,
with the remaining consumption from charger individual connection
points (ICPs) and buildings that we rent that are out of our control.
Areas that Meridian intends to advance in future years include the visibility
of non-renewable and renewable energy in our value chain, especially
among our suppliers.
Energy consumed*
GJ
FY20
FY21
FY22
FY23
Total energy consumption
within the organsiation
67,880
70,628
67,906
67,842
Non-renewable fuel consumed
10,042
9,128
8,373
9,265
Renewable fuel consumed
–
–
–
–
Electricity purchased
for consumption
57,838
61,500
59,533
58,577
Self generated electricity
51,146,884
45,629,699
48,743,908
49,992,222
Electricity sold
51,146,884
45,629,699
48,743,908
49,992,222
*
All figures reported in GJ Conversion factors sourced from US Energy Information Administration as
of 30.6.2023. (eia.gov/energyexplained/units-and-calculators/energy-conversion-calculators.php).
Renewable Energy Certificates are applied to electricity consumption where Meridian is the retailer.
There is no consumption or sales of heating, cooling or steam.
49
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
A new standard for sustainable
infrastructure development
Figures from the Ministry
of Business, Innovation and
Employment (MBIE) show that the
building and construction sector
currently accounts for around
20% of New Zealand’s carbon
emissions3. Reducing embodied
carbon in large-scale projects is
crucial to Aotearoa New Zealand
achieving its goal of being carbon
neutral by 2050.
As an active and scaled developer
of energy projects, we recognise
that we have a responsibility to
minimise our emissions and waste in
our own construction programme.
Our assessments show that our
forecast construction emissions this
decade are likely to be the same as
our total operational emissions.
As part of lowering our impacts and
promoting responsible resource
use, we’ve introduced guidance
for sustainable construction
throughout our business, and
applied it to our Harapaki wind
farm and Ruakākā battery projects.
At Harapaki we’re building in
carbon wins at every stage of the
project. Reviews of the civil design
significantly reduced the quantities
of concrete and steel, lowering
the project’s carbon footprint
before ground was even broken.
Since then, we estimate on-site
actions (encouraged by an ‘always
on’ carbon mindset) have avoided
emissions by a further 15,000
and 20,000 tCO2eq.
We believe that, through
identifying our best practice and
sharing our learnings with the wider
industry, the Harapaki wind farm
project will set a new standard
for the low-carbon construction
of wind farms, and enable the
development of a new standard
for the design, construction and
operation of new wind farms
throughout Aotearoa New Zealand
that will accelerate the transition to
a low-carbon future.
We also measure the wider social
and economic benefits generated
by Harapaki for the local community.
For example:
• 55% of our workforce is
currently employed locally
• we’ve spent more than $92
million in the local community
• we’ve diverted 79% of the
waste from the site from
landfill to re-use.
Forever Forests
continues to grow
Since 2019 Meridian has invested
in permanent forests in Aotearoa
through the Forever Forests
programme, with the aim of
creating our own carbon sink
and delivering broader biodiversity
and social benefits.
Initially we planted a mixed model
of exotics and natives on our own
land, with a view to transitioning
to fully native forests over time.
However, we soon recognised that
our own property holdings were
not going to be enough, so since
then we’ve acquired more of our
own land and formed partnerships
to pursue the remainder of the
land required. We now have all the
land we need (1,214 hectares in
the programme) with an estimated
300,000 trees planted to date on
350 hectares and the remainder
to follow in 2023–2025.
5 0
3 Whole-of-Life Embodied Carbon Emissions Reduction Framework, Ministry of Business, Innovation and Employment, August 2020.
Of the trees planted so far, around
20% are natives and another 15% is
passive native regeneration under
management by the end of FY24.
Our goal is to have 700,000 trees
in the ground by FY2024. We
expect our plantings to transition
to fully or predominantly native
in 60–70 years.
So far we have 14 planting sites in
total, with nine already planted and
the remaining five to be planted.
Five of our sites are now registered
with the Ministry for Primary
Industries (MPI) and are producing
credits (2,500 and counting). The
remaining four planted projects are
awaiting MPI approval. Between
now and 2030 we expect to create a
cumulative stock of >50,000 credits.
One of the most satisfying aspects
of Forever Forests is the opportunity
to work with communities and to
involve Meridian people in the
programme. We’ve undertaken
more than 12 native-only plantings
involving Meridian staff since 2019,
including the Tūī Corridor project
in Christchurch.
We have four partnerships in
place: one with The Christchurch
Foundation for our Christchurch
plantings; and the others with
private landowners near our
wind farms and iwi-based trusts.
More recently we’ve turned our
attention to the wider biodiversity
opportunities for Forever Forests.
For example, in the Tūī Corridor
project in Christchurch, we used
to use pest control to protect
the trees but not necessarily the
wildlife. We’ve now upgraded our
pest-control measures to protect
both. We’ll continue to do more
to establish a safe home for all the
inhabitants of our Forever Forests
in the years ahead.
Planting native trees at West Wind Farm, Te Whanganui-a-Tara Wellington, as part of our Forever Forests programme. ►
51
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
5 2
Sharing our views on policy
and regulatory changes
We feel an ongoing responsibility to
interact with regulators and public
sector organisations to ensure that
decisions being made on the future
of the New Zealand electricity
sector and the contribution it makes
to the wider economy are informed
and best benefit our customers
and all New Zealanders. We do this
through providing feedback on
proposed policies, legislation and
regulation and through dialogues
with a wide range of organisations
including the Electricity Authority
and MBIE.
In our conversations we’re always
looking to balance the needs of our
stakeholders with the perspectives
of our partners and the now-urgent
national need to decarbonise.
Of course these conversations
are just part of what must happen
if Aotearoa New Zealand is to
instigate effective change. A
well-functioning electricity market
that incentivises the construction
of new renewable electricity-
generation systems is also vital, as
is the commitment of current and
future governments to delivering
policy stability, transparency and
continuity on climate change.
The successful reform of the
transmission pricing methodology
last year saw Transpower publish
final pricing for the 2023-2024
pricing year incorporating these
changes. Among its significant
benefits, the new pricing
arrangement is expected to
encourage a more efficient
use of the national power grid
and a more efficient investment
in transmission and generation
assets. It’s anticipated that it will
also reduce the cost of electricity
at peak times, and over time lead
to lower prices for all consumers.
Our total annual charge for the
year is $66 million, which is
$12 million lower than in the
previous year.
We were pleased to see the
Government continuing to
encourage large-scale process
heat decarbonisation through the
GIDI Fund. Such initiatives should
further incentivise New Zealand’s
most energy-intensive industries
to move away from fossil fuels, and
the endorsement of this transition
at Government level is a powerful
signal. In our view, this positive step
needs to be matched with other
decarbonisation measures, such as a
stronger encouragement of the use
of the Emissions Trading Scheme
(ETS), to make the transition to a
low-emission future successfully.
The ETS was developed to provide
a sinking cap on total net emissions
and to send price signals that
incentivised businesses to act. In
our opinion, the current pricing isn’t
sending strong enough signals in
that direction. As we observed last
year, complementary policies may
well be needed, and for us priority
actions would include increasing
the number of EVs on our roads
and increasing total renewable
energy use. In our submission to
the Climate Change Commission
on its emission-reduction plan for
the 2025–2030 period, we noted
that while the GIDI Fund and the
Government’s transport policy
had been beneficial, the recent
effective collapse of ETS prices
needed to be actively addressed.
Uncertainty remains on the
proposed Government investment
in the New Zealand Battery Project,
with cost estimates having been
revised upward. Two other options
are now on the table, including
a portfolio bundle of hydrogen,
geothermal energy and biomass.
A final investment decision is now
not expected until around 2026.
We’ll continue to monitor decisions
and options in this space.
More broadly, resource
management reform is underway,
with the Government committed
to replacing the Resource
Management Act 1991 (RMA) with
three new pieces of legislation.
The first two pieces of legislation,
the Natural and Built Environment
Act and Spatial Planning Act, were
recently passed into law.
These three new Acts, together
with a new National Planning
Framework, will set a new regulatory
environment for reconsenting
existing generation assets and
consenting new development
options. Our focus will be on
ensuring that the finalised regulatory
environment does indeed enable
the renewable generation needed
for a low-carbon future.
To that end, we’ve presented
comprehensive submissions on
the potential need for trade-offs to
achieve the overriding targets for
climate change and decarbonisation.
The problem as we see it is that in
order to develop the infrastructure
needed to decarbonise, and
ultimately avert a worse climate
change outcome, there will need to
be changes to existing environmental
parameters. We’re also concerned
about the long and overlapping
transition periods that could see
some areas operating with the
current RMA in place, and some not.
The Electricity Authority had
another busy year monitoring the
current state of the energy market
and preparing the sector for what
will be needed in the years ahead.
The Authority’s review of competition
in the wholesale market concluded
that the market is largely working
for consumers as intended, and
resulted in a decision paper that
included measures for facilitating
new entrants to the generation
market. The review considered
a range of developments in the
sector, including the changes to
the RMA, the country’s energy
strategy, the New Zealand Battery
Project and opportunities for
overseas investment.
The Authority also released urgent
amendments to the Electricity
Participation Code 2010, together
with a consultation paper, to
address the risk of inefficient price
discrimination in large electricity
contracts. The amendments
introduced new rules for industrial
electricity contracts of 150MW or
more, effectively meaning that any
large contracts may need Authority
approval to proceed.
This amendment was taken into
account in our negotiations with
NZAS on a new, more flexible
demand response contract for
2023 and 2024. Under the current
arrangements, we already had
the ability to ask NZAS to turn
down the power it used once the
hydro lakes dropped to or below a
certain level. The new arrangement
is more flexible because it can be
called upon in smaller increments
and because it can be called at
Meridian’s option rather than when
hydro lakes reach a certain level.
While the new flexible demand
response arrangement itself did
not constitute a materially large
contract under the Electricity Code,
it was captured by the Authority’s
new rules because it was linked to
our existing contract with NZAS. We
applied to the Authority for approval
in April 2023 and our application
was processed and approved by the
Authority in June 2023, well within
the statutory timeframe it had set
and in time for winter 2023. Any
new contract with NZAS after 2024
will likely be subject to the same
amendments and would potentially
also go to the Authority for approval.
The Authority’s Market Development
Advisory Group has been looking
into how the wholesale market can
discover prices in a 100% renewable
market. No final conclusions have
yet been published. The Authority
has also been looking at security of
supply in terms of winter capacity
and the implications for thermal load
commitment. This is an important
issue and one that we and other
members of the electricity sector’s
Chief Executive Forum have been
investigating. For example, we’ve
already proposed a ripple control
initiative as a short-term product
to alleviate load stress.
We look forward to learning more
about the intended New Zealand
Energy Strategy, with consultation
on that expected in the second half
of the 2023 calendar year.
This year our submissions to policy
agencies, regulatory agencies and
select committees covered topics
such as price discovery, the natural
and built environment, competition,
climate-related disclosures, modern
slavery4 and worker exploitation,
hedge market enhancements and
emission reductions. You’ll find
copies of these submissions on
our website at meridianenergy.
co.nz/about-us/investors/reports/
submissions.
4 Modern slavery is used to describe situations where coercion, threats or deception is used to exploit victims and undermine or deprive them of their freedom. Modern slavery is an umbrella term that takes many forms,
including forced labour (including the worst forms of child labour), human trafficking and slavery and slavery-like practices.
5 3
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 w
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
5 4
Our impacts anchored in the natural world
A summary of our nature-based impacts is provided below, including the actions we are taking to manage, avoid or mitigate the impacts.
Impact
Description
Actions to manage, avoid or mitigate this impact
Diversion and
reduced river
flows and water
quality issues
Meridian’s structures and water
management can directly affect
the health of river systems that are
obstructed and we have reduced
river flows due to hydro dams and
generation activities.
Harm to
biodiversity
in water
Meridian has a direct effect on
the health of aquatic biodiversity
(particularly native fish species)
affected by hydro dams and
restricted river flows.
To minimise any negative impacts that our operations have on river flows and water quality, we comply with
all environmental legislation, including resource consent conditions across our assets. It includes ongoing
monitoring and reporting requirements. In addition we:
•
collaborate with and report to the Guardians of Lakes Manapōuri, Monowai and Te Anau, who are the
specialist statutory guardians appointed to oversee our operations and environmental outcomes
• provide ongoing funding and support for Project River Recovery, which works to preserve
and restore braided river and wetland habitats in the Waitaki catchment.
Our Biodiversity and Deforestation Commitment outlines our wider commitments and initiatives.
To minimise any negative impacts that our operations have on biodiversity in water we comply with all
environmental legislation, including resource consent conditions, across our assets. In addition we:
continued to operate our elver trap and transfer programme under the guidance of Ngāi Tahu
•
• provided ongoing funding and support to Project River Recovery, which works to preserve and restore
•
braided river and wetland habitats in the Waitaki catchment for the benefit of its native plants and animals
continued to work closely with the Waiau Fisheries and Wildlife Habitat Enhancement Trust to enhance
stream and wetland habitats for fisheries and wildlife
continued to release water from our hydro schemes in line with existing consents
•
• worked closely with community and interest groups to identify ways to improve and add to existing
Adverse effects
of generation
assets and
activities on
cultural values
Meridian directly affects the
cultural values of iwi relating
to land, waterways and biodiversity
because they are affected by the
operational presence and use of
Meridian’s generation assets.
This impacts iwi and their
relationship with the land,
water and other taonga.
mitigation initiatives.
Our Biodiversity and Deforestation Commitment outlines our wider commitments and initiatives.
Our Group Code of Conduct requires genuine engagement with key stakeholders and a consideration of
impacts, including on iwi, as a result of business decision-making. This year we have also:
• updated our Group Code of Conduct with a commitment to human rights that includes a commitment
•
to the United Nations Declaration on the Rights of Indigenous Peoples and Te Tiriti o Waitangi
continued to establish and build relationships with iwi, hapu and rūnaka in relation to our Harapaki
and Ruakākā development projects
• negotiated a relationship agreement with Waitaki rūnaka to reflect the cultural and environmental
impact of the Waitaki Power Scheme
• allocated a proportion of our Cyclone Gabrielle response to Māori communities around the Harapaki
and Ruakākā projects
• advanced a joint venture to develop a carbon forest with Te Waiau Mahika Kai Trust.
w
Impact
Description
Actions to manage, avoid or mitigate this impact
Improving
biodiversity
on land
Meridian contributes to enhancing
natural ecosystems on Meridian
owned/managed land as well
as non-Meridian owned land by
supporting planting and biodiversity
protection programmes.
Disposal of
waste and
other emissions
Meridian causes waste-to-landfill
and harmful gaseous emissions
from its corporate and generation
activities.
We seek to contribute to improving biodiversity on land via a range of initiatives. These include:
•
the continuation of Forever Forests, our afforestation emission removal project designed to transition to
100% native over time
the advancing of a joint venture to develop a carbon forest with Te Waiau Mahika Kai Trust
• a new no-net deforestation commitment (excluding wilding pines)
•
• being the National Partner of DOC's Kākāpō Recovery Programme since 2016
•
the introduction of a new nature-positive ambition to increase our focus on nature and biodiversity
• plans to pilot new nature-based frameworks and advance identified new biodiversity initiatives in
the coming years.
Our Biodiversity and Deforestation Commitment outlines our wider commitments and initiatives. For more
details on metrics and targets relating to Forever Forests, see our FY23 Climate-related Disclosure.
We have worked to mitigate this impact through:
• delivering various initiatives related to Half by 30 and our validated near-term science-based target. Refer
to our FY23 Climate Action Plan for more details
• offsetting 100% of our emissions, including our expanded commitment to offset our one-time
construction emissions
• our Forever Forests programme sized to remove our FY30 operational emissions
•
launching a Circular Economy Framework to guide our organisation on how to embed and deliver
circular outcomes
• outlining requirements for suppliers to measure and disclose emissions as part of our Supplier Code
of Conduct.
Outside the Half by 30 boundary:
•
launching our Sustainable Infrastructure Framework has helped our development team to identify
and mitigate the projects with the most material impacts (including construction emissions, waste
and end-of-life options for assets being installed)
• major projects and developments at Meridian, including targeted sustainability KPIs. For example,
100% of contractors must provide carbon data and contribute to reduction initiatives, and
all contractors must achieve an increasing percentage of waste diversion from landfill for site.
For more details, refer to the metrics and targets section of our FY23 Climate-related Disclosure and to
our FY23 Climate Action Plan.
5 5
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
Our impacts anchored in the natural world continued
Impact
Description
Actions to manage, avoid or mitigate this impact
Leading and
influencing
change and
progress on
sustainability
issues
Through its leadership and
influence, Meridian can contribute
to ambitious commitments and
actions in collaboration with other
companies and organisations on
social and environmental issues
that are most relevant to the
business.
The pace, scale, level of ambition and partnership approach we adopt to drive progress on sustainability
issues is what defines success in this impact area. Recent success have included:
the electrification of boilers with customers such as ANZCO Foods
the Southern Green Hydrogen Project
•
•
• a commencement to move early on establishing due diligence processes on issues for modern slavery
•
in FY23, the completion of our first human rights risk assessment of our value chain and an update of our
Group Code of Conduct with our new human rights commitment
the adoption of evolving best practice climate-risk assessment methodologies, with a change programme
underway for early voluntary alignment with Aotearoa New Zealand Climate Standards
•
• playing a leadership role in informing the development of the refreshed New Zealand Climate Leaders
Coalition pledge announced in June 2022, with the contribution of case studies to support technical
guidance developed.
5 6
Our native tūna trap and transfer programme, Ahuriri River, Canterbury. ►
57
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
R
U
T
A
N
R
O
F
T
H
G
R
I
5 8
MERIDIAN DOING IT RIGHT. NOW.
Cleaner than ever
Mt Cook Alpine Salmon and High Country
Salmon are commercial salmon-farming
operations located on a canal owned by Meridian
Energy at the mouth of Lake Ruataniwha, near
Twizel. This year they joined forces to switch
their operations fuel from diesel to electricity –
slashing their combined carbon emissions
by 96% and opening the door to sustainable
future growth.
Despite their proximity to the Ōhau B power
station, the canals and surrounding land in the
Mackenzie Basin were not originally intended
to support commercial activity. So even though
salmon farms had operated in the canal since
the 1990s, they’d never been connected to the
national grid. Instead, large diesel generators
had provided the power needed for hygienic
production, cold chain management and
operations. Together, the businesses were
burning through 70,000 litres of diesel a year.
A spike in diesel prices provided the final
incentive for both companies to change.
Both had been wanting to stop using diesel
generators for some time, but the cost and
complexity of building a connection from a
substation 1.5 kilometres from Lake Ruataniwha
meant it hadn’t been feasible.
The answer came from Network Waitaki,
which worked closely with the salmon
businesses and local landowners to develop
a technical and commercial solution that
would work for all parties. We provided
encouragement, assistance and resources
for the project, including engineering support
and land for the new infrastructure.
Now both salmon farms owners can operate
environmentally cleaner businesses in a pristine
setting. We estimate that the switch from
diesel to electricity will reduce the businesses’
combined emissions by 224 tCO2eq every year
– the same impact as removing 77 cars from
the region’s roads.5
5
Estimated annual kilowatt hours’ usage by the two businesses modelled on current diesel consumption.
◄ Mt Cook Alpine Salmon farm, Twizel.
59
RIGHT FOR NATUREMERIDIAN INTEGRATED REPORT 2023 Technology
for now
and beyond
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
6 0
We’re now operating
at a greater scale
than ever before,
and with greater
personalisation.
◄ An international example of wind turbines and a solar array working in harmony.
61
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
62
Innovating
together
Development is intrinsic to our future. Progressing our
portfolio and the systems that support it will underpin
the way we evolve our infrastructure responsibly to
meet the country’s future energy demands. This year
our development, retail and technology teams
worked together to encourage a consistent drive
for decarbonisation in supply and demand.
In this section:
• A platform for success
• Charging ahead
• Managing key assets for value
• Demand response agreement reached with NZAS
• Partners finalised for hydrogen developments
• Doubling our development ambitions
• Zero to 200 in next to no time
• Certified Renewable Energy promotes decarbonisation
• Processing big changes
• Electrification supports demand flexibility
•
•
• Our impacts anchored in technology
• A new standard for low-carbon construction
Infrastructure upgrades
Informing how we stay secure
A platform for success
The successful implementation of the Flux
platform throughout the Meridian Group will
support our retail business to continue to drive
operational improvements, deliver digital
innovations and obtain data insights.
Flux itself is a stand-alone organisation within
our Group, with its own governance structure,
and is looking to expand its scalable and modern
platform into the New Zealand, Australia and UK
markets. Its goal is to provide energy retailers
with quality, flexible billing solutions.
The platform also addresses a range of legacy
sector issues that have hampered retail
performance in many markets, including a lack
of quality software and difficult and complex
underlying systems. These systemic issues have
been further complicated by rapid shifts in
the wholesale markets and the requirements
generated by increasing regulation.
One of the many benefits of the Flux platform is
its sophisticated billing engine, which provides
retailers with opportunities to offer their
customers a wide range of pricing options and to
integrate with chosen partners. The Flux platform
also has strong security credentials in the form of
ISO 27001 certification and PCI compliance.
We’re excited by the sophistication of the
solutions that Flux is developing and look forward
to introducing more innovative products as part of
a wider ecosystem offer.
Charging ahead
It’s taken longer and cost more than we
expected, but the migration of our previously
diverse customer bases to the Flux platform is
now complete. While it’s tempting to see this as
purely a technology change, a unified platform
is key to offering better customer service and to
implementing key decarbonisation initiatives.
Powershop has focused on optimising its
inbound channel mix by transitioning from
a high-cost voice/email service model to an
efficient self-service/live chat customer model.
During FY23 Powershop reduced inbound voice
volumes by 37%, representing a reduction of
over 41,000 calls. Over the same period, chat,
a faster digital service channel, grew by more
than 190%, taking the smallest customer service
channel to what is now the largest channel by
volume. In addition to improving customer
care agent efficiency, chat as a channel has
an exciting future, with automation and other
technologies aiding service teams, creating more
self-service opportunities and further improving
customer experiences. The advances made with
Powershop in FY23 will be replicated in Meridian,
leveraging the dual-brand retail structure.
Having our full customer base – from households
to the agriculture sector and commercial and
industrial businesses – on one platform saves
time and money, improves billing efficiency and
ensures that we can engage with one person in
different capacities.
◄ Flux platform on mobile app.
6 3
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 Charging ahead continued
As we alluded to last year, the
migration to the Flux platform has
also helped our teams to think of
our customers in more holistic terms,
and enabled us to leverage our
multi-brand strategy. That’s become
increasingly important as Meridian
has continued to grow – we’re
now operating at a greater scale
than ever before, but with greater
personalisation. And of course,
having one platform for both our
brands accelerates onboarding, lifts
service levels and cuts cost
per serve.
An emerging opportunity is Flux’s
contribution to decarbonisation.
The platform will enable us
to deliver new and innovative
customer offers across our EV
charging solutions.
Managing key
assets for value
Asset-management excellence
is critical to managing risks in our
Generation business. As our hydro
assets continue to age and new
risk factors emerge, we’re evolving
our approach to address new
considerations.
As a vertically integrated company
(our Group’s activities range from
generation to retail), it makes
commercial sense for us to generate
as much of the power our customers
need as we can. Inevitably that
puts pressure on our more mature
plant, so with this in mind, last year
we began to shift our emphasis
to an energy portfolio approach,
placing wind and solar first, backed
by flexible and highly reliable hydro
generation – rather than the other
way around – in order to encourage
first use of non-stored, renewable
energy sources. Wherever possible
we’ll use sun and wind, knowing
we can ramp up hydro when the
weather is cloudy or still.
This approach helps resolve two
potential impacts. It means we
have an on-demand response in
the event of extreme weather
events affecting output at our
wind farms. And it means we can
continue to optimise the power our
customers need, with less reliance
on cover from other generators or
buying power on the spot market.
The shift is seeing us steadily run
hydro, but more flexibly than
we used to. As we explained last
year, it’s meant reorganising our
maintenance and refurbishment/
replacement programmes. We’ve
done this as it enables us to better
manage our assets by anticipating
when we may be more constrained
in taking hydro assets out of service,
and to make room to introduce
more assets to our generation
portfolio. We’re also investing more
in technology and data to inform
our future decision-making.
Another change has been in how
our asset teams are structured.
Previously our wind and hydro
teams worked separately. This year
we’ve brought all our Generation
people together and reconfigured
the Generation team so that it
focuses on looking after existing
assets. As a result our Generation
(wind and hydro) teams are now
combined in specialist disciplines
such as engineering, maintenance
and generation strategy, and are
working in the entire portfolio of
generation technologies.
In December we announced that
we were taking the Manapōuri
Unit 6 out of service for six
months due to issues with the
transformer core. Since then we’ve
undertaken physical inspections
and determined that Unit 6 can
return to service but with additional
monitoring. We’re using the outage
created by the transformer issue to
make some mechanical
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
6 4
“
At Benmore we’ve
increased the 90MW
output limit for each of
its six units to 95MW,
enabling us to access
another 25MW of
capacity when we’re
limited to five units.”
We’re also looking to upgrade the
seismic resilience of Benmore’s
unique concrete penstocks.
Improving earthquake science
alerted us to a potential vulnerability
with the penstocks, indicating that
they would survive an earthquake
but would suffer damage affecting
electricity generation from this key
asset. We’ve run two successful
proof-of-concept projects and
are now poised to greenlight a
multi-million-dollar investment to
improve significantly the penstocks’
resiliency to earthquakes.
repairs and get underway with an
automation upgrade. This multi-
million-dollar project will involve
upgrading and repairing units at the
site over the next three years.
unit down our maximum output
is 750MW (125MW X 6 units). The
dispensation would allow us to
increase that by 18MW to 768MW
(128MW X 6 units).
We have reassessed the maximum
capacity of our generating units
at Manapōuri Power Station, and
we believe each unit’s maximum
capacity can be increased by
6.5MW to 131.5MW. Working with
Transpower, we have agreed an
initial lift in capacity to 128MW for
each unit. We have further work to
do to unleash the full 131.5MW each
unit is capable of producing.
To be clear, any additional unit
capacity won’t affect our overall
station output, which must continue
at 800MW to meet discharge
consent limits. But it would be
valuable when we have an outage
in one or more of the station’s
seven units. Currently, if we’re one
Having this capacity available
could help with any tight supply
and demand conditions that arise in
the electricity system – for example,
during winter peak periods – and
therefore enable the country to
continue accessing energy through
renewable sources.
At Benmore we’ve increased the
90MW output limit for each of its
six units to 95MW, enabling us to
access another 25MW of capacity
when we’re limited to five units.
Previously we could take the
units up to 95MW under special
circumstances, but now we can
run them at this higher level
more regularly in response to
electricity demand.
6 5
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
6 6
Demand response agreement
reached with NZAS
NZAS remains a significant customer,
drawing the equivalent of around
36% of our total generation output
and 12% of the national demand.
In recent years we’ve introduced
a number of measures to give us
more flexibility in distributing some
of that energy elsewhere if it’s
needed urgently.
During June this year we received
approval from the Electricity
Authority to amend the NZAS
electricity supply agreement to
introduce a demand response
arrangement.
The enhanced agreement enables
us to require NZAS to reduce
consumption by up to 50MW at
the Tīwai Point smelter if there
is a hydro shortage or when the
electricity system is under stress.
Separate tranches of demand
response flexibility (ranging from
15MW to 50MW) are available for
us to call on, with each tranche
having unique ramp-down and
ramp-up requirements. We’ll
compensate NZAS via a fixed price
for each MW reduced under the
demand response agreement.
This agreement means Aotearoa
will likely need to burn less coal
than it previously would when a dry
spell causes the hydro lakes to drop
to low levels. When NZAS reduces
its consumption of electricity, that
power can effectively be made
available to other users.
The net result is likely to be a
reduction both in carbon emissions
from burning less coal and in the
overall cost of the electricity system,
which ultimately reduces costs
to customers.
As New Zealand works towards a
more renewable electricity system,
we need to think creatively about
how we can manage winter demand
and dry-period energy needs.
The demand response agreement
will terminate on 31 December 2024,
the same date as the current
electricity agreement. Discussions
about a possible new agreement
post-2024 are ongoing, and at this
point no decisions have been made.
However, as we have said previously,
we’d only be interested in signing
a new contract with NZAS if it:
• addressed with key stakeholders
the need for environmental
remediation of the Tīwai site
• made a long-term commitment
to Aotearoa New Zealand
• committed to paying a
sustainable price for the
electricity it consumes
• were prepared to reduce its
consumption in dry years for
the benefit of the wider
electricity system and other
consumers of electricity.
We remain committed to working
with NZAS and its owners to
secure the operation of the smelter
beyond 2024. We are very mindful
of the value of the smelter to
the Southland region and the
livelihood of many Southlanders
and we hope a contract extension
can be agreed. But certainly the
implications of a smelter exit to
Meridian are far less than was the
case during previous negotiations.
Transmission lines at Tīwai Point, Southland. ►
67
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 Partners finalised for
hydrogen developments
Our plans for hydrogen development
have moved forward. Woodside
and Mitsui are our chosen partners
for the development of the
Southern Green Hydrogen Project
in Southland, alongside Ngāi Tahu.
This world-class collaboration will
cover the full green hydrogen and
ammonia supply chain. Our goal
is to produce 500,000 tonnes per
year of green ammonia utilising
electrolysis from renewable power.
The large-scale green hydrogen
facility will focus initially on the
export market (with Japan likely as
the primary market). This will in turn
help accelerate the development of
a new hydrogen economy at home
and strengthen New Zealand’s
ability to decarbonise our transport
and industrial sectors.
In addition to creating new
opportunities in an emerging
industry for the local community,
we expect the facility to contribute
up to 40% of New Zealand’s
dry-year flexibility needs to the
electricity sector at a fraction of the
cost of building new power stations.
Hydrogen provides us with another
scaled energy development that
has the flexibility to be turned down
or off to manage the security of the
country’s energy supply. As such,
it’s an important addition to our
demand-flexibility portfolio and
the country’s decarbonisation drive.
was closely involved. Our other
partner, Mitsui, has 50 years
of experience in the ammonia
business and the largest
share of ammonia imports into
Japan. It will participate in the
development of potential markets.
Looking ahead, Meridian, Woodside
and Mitsui will all work actively with
Ngāi Tahu and the local rūnanga
to ensure the project aligns with
their energy vision for the region
and supports their principles
under mana whenua.
Woodside brings the technical
skills and operations experience
needed to develop this project at
pace to meet customer demand
for hydrogen. Its selection
followed a competitive process
in which Murihiku Regeneration,
representing both Ngāi Tahu and
the local rūnanga of Murihiku,
Interest in the development of
green hydrogen continues to
increase as the search for energy
security accelerates in Europe
and elsewhere. Green hydrogen
in particular is recognised as
having significant potential in
decarbonising global industries
like steel manufacturing and
fertiliser manufacturing and
heavy transportation (trucks,
trains and shipping).
In the next stage of the project,
the three parties will commence
front-end engineering design,
finalise commercial arrangements
and assess options for domestic
hydrogen and green ammonia
supply and export to Asia
and Europe.
While some may see a contract
with NZAS and the development
of hydrogen as separate paths, we
don’t perceive them as mutually
exclusive. If the commercial
arrangements make sense, our goal
will be to pursue both. That will
require more renewable energy
in Southland, but in our view the
potential for such development is
real. That potential now needs to
be harnessed.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
6 8
Doubling our
development ambitions
We have a bold vision for our
renewable pipeline and intend to
continue pushing hard and rapidly
grow our renewable generation
assets. During this reporting period
we more than doubled the size
of our renewable development
pipeline options to 11,100GWh.
Our range of development options
includes wind, solar and grid-scale
batteries, and we’re continuing to
increase our investment in building
our portfolio of future options. This
level of expansion within such a
condensed timeframe clearly shows
the depth, breadth and quality of
our development programme.
Harapaki is the first of seven
projects we intend to have
underway by 2030. Our largest
single wind farm yet, it will become
operational next year and will
power up to 70,000 households
once complete. The wind farm
construction is progressing well,
despite experiencing damage to
access roads and SH5 from
Cyclone Gabrielle which impacted
the civil construction programme.
the completed Services Building in
late May. A revised roading design
on site proved mostly resilient to
the huge volumes of rain that fell
during January and February 2023.
Once completed, New Zealand’s
second-largest wind farm will
have 41 turbines generating up
to 176MW of renewable energy
and will increase our wind
capaclty by 40%. We continue
to enjoy working with local iwi
Maungaharuru Tangitū hapū and
Ngāti Hineuru, who, among other
things, have been helping us with
cultural monitoring on site.
At financial year end, over 90%
of the earthworks and cabling
have been completed; we’ve
just tipped over 50% of the
foundations finished; and the
substation and switchyard have
been commissioned. A highlight
was the blessing and celebration of
New Zealand’s long-term
challenge is the sheer rate of
decarbonisation required.
Aotearoa currently produces
40TWh of electricity per year,
but forecasts suggest this will
need to increase to 70TWh with
the electrification of transport,
industrial process heat and other
sectors. For the market as a whole,
the consensus seems to be that we
will need to build the equivalent
of three to four medium-sized
wind farms every year for the
next 27 years.
The need to get new renewable
projects up and running will only
become more urgent.
Regulation will need to keep pace
with these emerging challenges.
Completing the reform of the
country’s resource management
framework clearly will be critical to
accelerating the massive amount of
new renewable energy generation
needed by 2050. We’re working
closely with the Government to
ensure the new framework allows
consenting authorities to balance
local environmental impacts and
the positive climate benefits of
renewable energy projects.
In March 2023 we began the
construction of our Ruakākā Energy
Park, near Whangārei, starting
with a $186 million Battery Energy
Storage System (BESS).
The battery storage, which can
deliver 100MW peak and 200MWh
(two hours) of energy storage, will
help meet peak demand and even
out the distribution of supply and
69
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 “
We have a bold vision
for our renewable
pipeline and intend
to continue pushing
hard and rapidly
grow our renewable
generation assets.”
Doubling our development
ambitions continued
demand, and make a significant
contribution to the reliability of the
overall electricity grid by allowing
more wind and solar renewable
electricity generation to be
accommodated efficiently within
the system. This could potentially
lead to the earlier retirement of
fossil-fuel-fired power plants in
the North Island.
The project is also notable for
the speed with which it’s been
consented and approved, and its
use of cutting-edge technology.
Meridian underwrote early
procurement for long lead
items to shorten timeframes to
commissioning. Ruakākā will be
the largest battery energy system
in the country and the first large-
scale battery to be connected to
the national grid. We’ve engaged
with local hapū Patuharakeke
and they are working as cultural
monitors for the project. We’ll also
introduce a Community Fund as
part of our ongoing commitment
to be a good long-term neighbour.
Also planned for the site is a
grid-scale 120MW solar farm to
further speed up the transition to
a productive low-carbon economy.
The shared infrastructure provided
by the BESS will significantly
improve the economics of the
future solar farm. We are engaging
with a number of local hapū and
iwi and the local community in our
preparation for this project.
We expect to complete the
construction of the grid-scale
battery and start construction of
the solar farm in 2024. We have
also secured a second battery
option site at Bunnythorpe near
Palmerston North.
We’ve lodged resource consent
applications for a new wind farm
at Mt Munro, approximately five
kilometres south of Eketāhuna,
comprising 20 turbines and
generating up to 300GWh of
energy annually, enough to power
about 42,000 average homes.
The site would span three
privately owned properties that
would continue to operate as
working sheep and beef farms.
The turbines would have rotor
diameters of 136 metres, a
maximum height above ground
level of 160 metres and an
approximate capacity of 4.5MW
each. Up to 14 turbines would be
evenly spaced along the site’s main
ridgeline, with two further groups
– each comprising up to three
turbines – on lower hills to the
northwest of the main ridge.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
70
Zero to 200+ in
next to no time
EV charging makes a critical
contribution to transport
electrification. Our Zero EV charging
network is now one of the largest in
the country, with 237 Zero charge
points available and at and over
200 committed for installation,
offering New Zealanders improving
access to public chargers. We’re
also working on home and business
EV charging solutions.
Sixteen charge points will be added
to our South Island Zero network by
early 2024 with co-funding support
from EECA. The additions will help
eliminate ‘charging deserts’ and
accelerate the attractiveness of EV
ownership. In Springs Junction,
a BESS will make use of recycled
batteries from EVs, charging them
overnight so that we can supply
energy to the chargers during the
day. Looking ahead, we’re planning
to add solar panels to further
increase capacity.
Chargers are also being installed
at Kohatu, Haast and Hari Hari
largely completing the task of
providing public fast-charging
every 75 kilometres along
Aotearoa’s State Highways.
We’re also partnering with the
Wellington and Hutt City Councils
to increase the number of EV
charging stations in the region.
Currently, around one-third of
Wellington city’s emissions come
from road transport. Alongside the
shift to active and public transport,
switching to EVs will help the city to
achieve its goal of a 57% reduction
in emissions by 2030.
As part of this partnership, at least
60 charge points are expected to be
installed in Wellington city as part of
the Charged Up Capital programme,
which will be completed in the next
few years. We’ve delivered 20 DC
charge points and 18 AC charge
points in the Lower Hutt Region.
Currently there are fewer than 100
public chargers in Wellington and
Lower Hutt, despite the region
having the highest uptake of fully
EVs in the country. Once the Zero
rollout is complete, Wellington will
have one of the biggest destination
charging networks in Aotearoa.
One of our Zero EV charging stations in Rolleston, Canterbury. ►
7 1
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 Youth and Child Services/St John
of God Hauora Trust (Christchurch
region) for a solar installation;
EcoMatters Bike Hubs to procure
an EV van; and Ngā Manu Nature
Reserve to convert an internal
combustion engine car to an EV.
Round two of the Decarbonisation
Community Fund is targeted to
open in September. More than
100 groups have already registered
their interest in seeking funding.
Certified Renewable Energy
promotes decarbonisation
Our Certified Renewable Energy
product continues to be sought
after by corporate customers looking
to match the energy they use on
an annual basis with an equivalent
amount of electricity produced by
us and certified as 100% renewable
energy. Certifying energy use this
way also means that some customers
no longer have to pay to offset their
scope 2 electricity.
So far, more than 125 companies
have signed up to purchase more
than 640GWh of Renewable Energy
Certificates to align their electricity
consumption with renewable
energy generation attributes.
Also included in the Certified
Renewable Energy product is
electricity produced through our
commercial solar business. Once
again, we’ve seen good progress,
having signed contracts that will
increase our installed capacity
via a Power Purchase Agreement
to 1.852MWp. We now expect to
generate 2.4MWh per annum.
The net proceeds from the
purchase of these products have
been invested back into our two
decarbonisation funds – the
Decarbonisation Community
Fund and the Decarbonisation
Business Fund, which supports
our large commercial and
industrial customers with their
decarbonisation initiatives.
Our initial Decarbonisation
Community Fund commitments
were a charging station, two
EVs for KidsCan and a $50,000
contribution to a solar installation
for South Island Rowing. Then, in
our first round of contributions,
we awarded $163,000 to three
recipients: Waipuna Community,
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
7 2
Processing big changes
Our market-leading Process Heat
Electrification Programme is
going from strength to strength,
with 472GWh of process heat
conversion from fossil fuels to
electricity for big businesses
either under signed agreements
or MOUs. This level of conversion
will prevent 130Kt of CO2e being
pumped into the atmosphere, the
equivalent of removing around
60,000 cars from Aotearoa’s roads.
The programme has also paved
the way for demand flexibility –
our innovative flexibility product
provides financial advantages for
customers, alleviates strain on
the grid during peak periods, and
optimises our wholesale portfolio.
Among our success stories:
•
In partnership with
Meadow Mushrooms we have
decommissioned an existing
diesel-fired boiler and replaced
it with an electric boiler. This
project will reduce its carbon
emissions by 1,300 tCO2eq
per year.
• We’ve partnered with Woolworks
in Timaru to replace its coal-fired
boiler with an electric boiler.
• Progress continues with
ANZCO Foods Canterbury
on reducing its coal use by
reinstating electric boilers at
its Ashburton facility (that had
previously been retired).
• Progress continues with Alliance
Group on supporting the
installation of electric boilers
at its Lorneville plant, near
Invercargill.
• We’re also supporting Mataura
Valley Milk to install an electric
boiler. The project will be
completed later this year.
Electric boiler at Meadow Mushrooms replacing their diesel-fired boiler. ►
73
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 Electrification supports
demand flexibility
We have established a close
partnership with Open Country
Dairy (OCD), the second-largest
dairy manufacturer in New Zealand,
to decarbonise its facility at Awarua
near Invercargill. As a crucial part
of this project, OCD will replace
its existing coal boiler with a
high-pressure electric boiler,
resulting in a remarkable reduction
of 41,110 tCO2eq annually. To
put this into perspective, this
reduction is equivalent to
removing around 20,000 cars
from the road each year.
Additionally, we’ve worked
together to refine a demand
flexibility solution, enabling us
to request OCD to decrease
electricity consumption during
periods of high market stress. This
collaboration not only assists us in
effectively managing our portfolio,
but also supports the economic
viability of OCD's project.
Demand flexibility allows us to
intelligently manage when and
how we use electricity, ensuring
a cost-effective path towards
decarbonisation while still meeting
our nation’s electricity needs.
In addition to our work with
big process heat users, we are
developing flexibility products
for other markets. We have an
EV charging pilot underway that
uses software to analyse data and
customer preferences and charge
EVs at the times that work best
for everyone. As more assets are
added to the platform we will
create a ‘virtual power plant’ that
provides financial advantages for
customers, alleviates strain on
the grid during peak periods, and
reduces our market exposure.
Infrastructure upgrades
The upgrade of our SCADA
(System Control and Data
Acquisition) system is making
steady progress, with an agreement
signed, a partner chosen and
the finalisation of the design and
implementation plan underway.
This critical system runs and
controls our generation network,
and the upgraded version, with its
modern architecture and boosted
capabilities, will not only be flexible
enough to work with our emerging
energy sources and distributed
energy arrangements but also
align with our commitment to
extract new value from our assets
through upgrades.
A much smaller, but important,
project this year has been the
digital upgrade of hand-held radios
for our wind and hydro generation
teams. This is both a communication
and a safety issue. Often our
people are out and about in areas
that don’t have good cellular
cover. This upgrade ensures that
we can remain in touch with all
our people in the field.
Upgrades of our systems and
the inclusion of more data in our
decision-making throughout
the business point to the rising
importance of technology in
enabling efficiencies, and ultimately
decarbonisation, throughout our
business. Our shift to more powerful
technology to realise new potential
is really just getting started.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
74
Informing how we stay secure
As it is for all customer-focused
businesses, increasing and seamless
digitisation is both an expectation
for those we serve and vital for the
effective and profitable running
of the many moving parts of our
business. The finalisation of a
single underlying platform in Flux
will enable new levels of customer
insight and relationship building in
the years ahead – but with those
will come an ever-on responsibility
to protect our technology systems,
information and people from
cyber threats.
Our measures to manage our
cyber risks range from a security
training and awareness programme
to policies and procedures,
cybersecurity capabilities,
continuous threat monitoring
and event-detection capabilities.
This year 96% of our people who
engage with our systems have
completed our ‘being cyber safe’
online security training.
The active 24/7 monitoring of
our network by PwC is going well.
This world-class monitoring system
checks behaviours, traffic and
security alerts, adding further
levels of vigilance to our cyber-
security measures. We also conduct
regular internal exercises to test
our cyber resilience and business
continuity processes.
There have been no serious cyber-
security or privacy breaches this year.
Our network segregation project
is on the verge of completion. This
project enables us to segregate any
sites that become compromised,
reducing the opportunities for
wider contagion or damage. We’ve
also progressed a programme to
bolster security in our generation
control environment.
The key to successful cyber
defence is ensuring that defence
is in-depth. Instead of relying on
one control, we’ve developed
a series of integrated controls,
including network segregation,
active monitoring and a
comprehensive security awareness
programme, that work together to
minimise the chances of incidents
and, should an issue develop,
enable us to contain the threat.
The Flux platform, with its strong
underlying defence characteristics
and ISO 27001 and PCI DSS
certification in both our brands, has
further fortified our interactions.
For some time now we’ve been
using historical data to improve our
business decisions and enhance
predictive asset maintenance. At
Manapōuri, for example, we’ve
been able to diagnose an issue
with a transformer and work with
the engineering team to address
it proactively. Working together
this way improves decision-making
for our experts and enables us to
address issues before they escalate.
Elsewhere in our generation
business, we’ve exponentially
improved our inflow forecasting
model. Working in partnership with
NIWA (the National Institute of
Water and Atmospheric Research),
our teams can now, through
applying multiple new variables
to better data, manage our water
with much more confidence. Being
able to see the quantities of water
flowing through our system on each
of the next seven days has positive
effects for multiple parts of the
business – from our maintenance
teams to those managing our
activities in the wholesale markets.
Until recently, analysing the state
of our wind turbines has been a
time-consuming process requiring
examinations of thousands of
high-quality pictures. This year
we’ve developed a model, based on
machine learning, that automatically
scans the images and highlights any
issues. As a result, our engineers
can focus their expertise on specific
matters based on a set of images.
Our new automation strategy
will give our people simpler
and faster access to meaningful
data to support decisions. We’ve
identified three areas of focus: test
automation in our IT functions;
robotic process automation for
our office workforce; and further
automation of our data to enable
more informed decision-making.
75
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 Our impacts anchored in technology
A summary of the technology-related impacts outlined in this section is provided below, including the actions we are taking to manage,
avoid or mitigate the impacts.
Impact
Description
Actions to manage, avoid or mitigate this impact
100%
renewable
energy
generation
Increasing
the supply
of renewable
energy
Reducing
the emissions
of others
Meridian generates 100% renewable
energy from its generation assets,
generating approximately 30% of
New Zealand’s total electricity.
Meridian can increase the amount
of renewable energy available
in New Zealand by having a
clear development pathway for
investment in new sources of
renewable generation that aligns
with future demand projections, and
includes securing land, consents,
financing and appropriate
connections to the grid.
Meridian can contribute to
decarbonising commercial
and residential energy use
by creating products that support
the increased use of electricity to
replace fossil fuels and through
better energy efficiency.
We remain committed to operating and maintaining 100% renewable energy generation and have a
development pipeline designed to meet the anticipated needs of New Zealand’s electricity system while
retaining our approximate share of 30%.
We have made good progress against our target of seven grid-scale development projects underway
by 2030, and 20 new renewable projects underway by 2050. These projects include:
the ongoing construction of the Harapaki Wind Farm
lodging our application for consent of the Mt Munro Wind Farm
•
• obtained consent for the Ruakākā BESS, and initial project construction
•
• advancing the Southern Green Hydrogen Project
• advancing the Ruakākā Solar Farm
•
strengthening our overall development pipeline to a point where we now have development options
totalling 4.7GW
For more details, refer to the metrics and targets section of our FY23 Climate-related Disclosure.
We have a range of commitments and active work programmes to achieve decarbonisation for our customers
beyond renewable energy generation. This includes:
the electrification of customers’ industrial plant through a process heat electrification offer
•
• promoting and supporting the shift to EVs through an EV pricing offer, our home and business charging
products, our commitment to installing EV chargers across the country via our Zero Charging Network
and the launch of our Zero app (network map and payment)
supporting the Mevo car-sharing scheme via a business charging trial
•
• offering a Certified Renewable Energy product, with net proceeds reinvested in community-based and
business decarbonisation projects through our Decarbonisation Community Fund and Decarbonisation
Business Fund
commercial-scale solar, including Power Purchase Arrangements
•
For more details, refer to the metrics and targets section of our FY23 Climate-related Disclosure
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
76
Impact
Description
Actions to manage, avoid or mitigate this impact
Maximising
the benefits of
demand flexibility
and virtual
power plants to
support increased
electrification
Meridian can contribute to
the creation of a more reliable,
decarbonised and cost effective
electricity system by maximising
the potential of demand flexibility
and virtual power plants.
Business
disruption,
cyber security
and breach
of privacy
Meridian is directly linked to
the protection from cyber attack of
customer and other data and access
to critical systems and operating
assets.
We have made a positive contribution to this impact in the following ways:
•
signed an agreement with NZAS that provides access to up to 50MW of demand response from
the Tiwai Point smelter
• our new Energy Innovation team advanced options for distributed generation and for demand response
with a number of corporate and industrial customers e.g. Open Country Dairy
• we progressed plans for a trial of a virtual power plant, which will commence in early FY24
•
launched an electric vehicle smart charging pilot that utilises software to analyse data and customer
preferences, testing the technical capability and customer value of intelligently controlled and
scheduled smart charging
To mitigate the risk of critical systems and data being compromised by a cyber attack we have:
• equipped our people with the knowledge and skills to combat cyber threats, via our security training
and awareness programme
• progressed our network segmentation project, which enables us to segregate sites if they are
•
compromised, and contain intrusions
introduced active 24/7 monitoring of our network by PwC to check behaviours, traffic and security alerts.
This world-class monitoring system provides us with the intelligence to know what to act on
7 7
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
D
N
O
Y
E
B
D
N
A
W
O
N
R
O
F
Y
G
O
L
O
N
H
C
E
T
7 8
MERIDIAN DOING IT RIGHT. NOW.
A new standard for
low-carbon construction
Our Harapaki wind farm construction project is
setting a new standard for reducing embodied
greenhouse gases, from the initial design phase
to construction and operation. We’ve already
saved more than half the expected emissions of
business-as-usual construction methods. Now
we’ll apply the same approach to all our future
renewable-energy construction projects.
The Harapaki Sustainability Management Plan
outlines our goals for sustainable practices in the
project. It includes three key metrics:
• Monthly and annual reporting of the
project’s overall carbon impact.
• Carbon reduction initiatives implemented
by contractors each month.
• A target of less than 25 kilogrammes of CO2
emissions per 100 kilometres travelled on site.
Performance against these KPIs is reported at
quarterly sustainability catch-ups, as well as six
monthly sustainability audits, to ensure we stay
on track.
Key changes in the way we work have included:
• embedding low carbon from the first stages
of the project, which decreased the project’s
carbon footprint by more than 30%
◄ Construction at Harapaki Wind Farm, Hawke's Bay.
• ensuring comprehensive carbon
reporting from each project contractor
throughout the project
• ensuring resource efficiency to
•
minimise carbon impact
installing EV chargers at the project site
throughout the construction period.
The plan also encourages new and out-of-the-box
thinking to lower our carbon footprint. We capture
and share all ideas and initiatives, including
information on how those ideas and initiatives
have affected sustainability, any lessons learned or
follow-up actions required, and overall results.
Working this way has enabled us to reduce
emissions in five significant technical areas: on-
site aggregate production, which has: reduced
emissions by 1,000 tCO2eq; removing cement-
stabilised roading, which has reduced emissions
by 2,306 tCO2eq; reducing earthworks to
remove 843 tCO2eq; using piled foundations for
turbines to save 6,985 tCO2eq; and using on-site
water sourcing and concrete batching to reduce
emissions by 5,000 tCO2eq.
Celebrating ideas and initiatives also has a positive
effect on day-to-day activities as people are
recognised for their carbon wins and innovation.
7 9
TECHNOLOGY FOR NOW AND BEYONDMERIDIAN INTEGRATED REPORT 2023 Humanly
possible
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
8 0
The complexities of
decarbonisation are
best solved by humans
coming together in
a range of ways
to make powerful,
cumulative change.
◄ Meridian employees at Benmore Power Station, Otematata.
81
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
8 2
Empowering
our people
Addressing improvements for the planet can’t be separated
from doing right by people. Ultimately, the complexities of
decarbonisation are best solved by humans coming together
in a range of ways to make powerful, cumulative change.
We continue to look for ways to enable our people to work
safely, fairly and effectively.
In this section:
• Our working style
• Attracting our next generation
• Our future of work
• Planning to succeed
• Focusing on our critical risks
• Building our sense of belonging
• Addressing gender injustice
• A closer look at our culture
• Doing our part to protect human rights
• Taking responsibility for behaving ethically
• Being good humans
• Connected to communities
• Expanding our productive partnerships
• Addressing energy wellbeing
• Our impacts anchored in people
• Helping KidsCan to decarbonise
Our working style
Attracting our next generation
Increasingly we’re looking for our teams to work
in more agile ways. We want them to innovate
quickly so that we can continue to help our
customers to decarbonise and save money.
The members of our Energy Innovation team
have been pioneers in this regard, showing
distinct skills for trialling ideas and choosing
whether to greenlight a concept or allow it to
fail fast. To encourage this way of working,
we’ve given teams throughout the business
a mandate to create new products that can
sit adjacent to our core business, without
compromising customer service or slowing
current workstreams.
The next step in creating this more agile business
model will be to lift the levels of collaboration
throughout the business. There are already
promising examples of this happening. Our
Generation and ICT teams, for example, have
been working together to use data to better
assess the performance of assets such as our
transformers at Manapōuri Power Station.
Developing our best overall workplace starts with
recruiting and retaining the best people for the
business we are and the Meridian we’re becoming.
This year we’ve invested significant time and effort
into positioning our workforce to be as attractive as
possible for the people we’ll need going forward.
Our internal research involved a significant
review of current market employment dynamics
and benefits. Overall, our packages held up very
well. We were already offering a competitive set
of benefits6:
• Life, Critical Illness and Income
Protection insurance.
• Paid parental leave for primary
and non-primary carers.
• An employee share scheme (MyShare).
• Workplace stress management.
• Sports, well-being and health initiatives.
• A hybrid and flexible working programme.
• Working-from-home arrangements.
• Part-time working options.
• Other paid family leave.
However, the research revealed that many
of our people were not aware of what was
available to them and had therefore not
applied to take full advantage of the benefits
available. To help resolve that, we repackaged
our employee benefits so that they were clearer
and easier to access and added some new
ones like health insurance7 and wellbeing leave
(see page 138). A key insight was that in the
post-COVID-19 workplace, employees needed
more information about their employment,
particularly: their actual remuneration; the
benefits they received; the opportunities that
were made available to them; and how easily
they could access meaningful career pathways
and leadership development (if that were
something that interested them).
◄ Customer care staff in Ōtautahi Christchurch office.
6
7
These benefits are available to Meridian and Flux employees.
For Meridian employees only.
8 3
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
Attracting our next
generation continued
For Meridian, a lot of effort went
into developing our Employee Value
Proposition this year to ensure
we continued to attract the right
people for our business. A key
goal was to provide prospective
employees with information on
what they would experience when
being ‘in the waka’ with us.
We identified five core themes
in our culture:
• We’re flexible – there’s a lot
of ‘give and take’, providing
individuals also give their 50%.
• Connection and community
are important.
• We’re caring and open.
• We’re committed to maintaining
a great work environment.
• We’re committed to safety
and sustainability.
As part of our commitment to
providing a workplace that’s
stimulating, inclusive, balanced,
and fair we made a number of
important changes for existing
team members this year. We
acknowledged that the cost of
living was a real challenge for our
people, especially those in roles
with the lowest pay. To help address
this, in August 2022 Meridian
awarded pay increases averaging
7% for our people. For the year
ahead we have set aside funds for
a further average increase of 6%
noting that greater percentage
increases will be targeted toward
our lowest-paid people – who are
those most affected by inflation
and increases in living costs.
Furthermore, in August 2022
each eligible employee received
a special one-off $1,000 payment,
which was given at the discretion
of management and the Meridian
Board.
Adding to this:
• Meridian has introduced
funding for Southern Cross
hospital and surgical health
insurance for all permanent
employees. Employees’
immediate family members can
also be covered at a discounted
rate from FY24.
• We are recognising the key
service milestones that our
employees achieve.
• We have repackaged our
already-generous sick leave
provision as wellbeing leave,
allowing people to take leave
for a wide range of wellbeing
reasons, with any reasonable
request considered.
These new initiatives have enabled
us to address potential social
inequalities across people with
different financial circumstances.
We offer a wide range of benefits
and now ensure that, regardless
of pay levels, all permanent
employees have access to benefits
that are of value and useful to them.
We have also increased our support
for the longer-term financial
wellbeing of our people on lower
income bands. From FY24 we will
increase the minimum company
contribution to KiwiSaver to 4% of
earnings, which directly boosts the
savings of those people who may
only be able to afford to contribute
3% of their earnings to KiwiSaver.
We also wanted to support
those members of our workforce
choosing to become parents by
extending the pay top-up to match
the Government’s 26 weeks’ paid
leave from FY24.
You can read the details of the
benefits we’ve already introduced
and those due to begin on 1 July
2023 in the 'Our remuneration'
section of this report8.
8 4
8
Part-time employees are entitled to the same benefits as full-time employees but pro-rated based on FTE when relevant. Temporary employees have access
to some benefits but not MyShare. Only some temporary employees have access to insurance. New benefits from 1 July 2024 apply only to Meridian.
People of Meridian
Meridian Group workforce by gender
Technical business unit workforce turning 65 by role
Female
Male
Total
5 years
10 years
Casual and contractor
Fixed-term full time
Fixed-term part time
Permanent full time
Permanent part time
Total*
5
21
3
390
89
508
10
18
1
488
18
535
15
39
4
878
107
Admin/support
Analyst/planning
Engineer
Generation controllers/traders
Health & safety/environment
1,043
Maintenance/operator
The region is defined as New Zealand and also includes three employees based in the UK (all male).
Manager
*
125 of these employees work for Flux Federation New Zealand. In FY23 the employee
headcount increased, largely due to growth in Development. NZ Retail and the People
team areas saw decreases in headcount; all other business units saw small increases.
Meridian Group workforce turning age 65
Project management
Total
The region is defined as New Zealand.
FY19
FY20
FY21
FY22
FY23
Parental leave
8.0%
–
15.1%
11.1%
21.1%
13.1%
5.9%
5.0%
10.3%
20.0%
8.6%
28.3%
22.2%
31.6%
24.2%
23.5%
25.0%
23.1%
Corporate centre
In 10 years
In five years
Retail
In 10 years
In five years
Technical business units
In 10 years
In five years
4.0%
4.6%
5.8%
6.6% 10.6%
1.7%
2.3%
2.9%
3.1%
4.7%
7.0%
8.0%
6.7%
7.2%
8.2%
3.6%
4.3%
2.6%
2.0%
2.6%
20.5% 20.4% 20.7% 25.5%
23.1%
8.5%
9.3%
9.8%
11.7% 10.3%
Employees entitled to parental leave
Employees who took parental leave
Employees who returned to work in FY23
after parental leave ended
Employees who returned to work after parental leave
ended still employed 12 months after their return
Return-to-work rates of employees
who took parental leave
Female
Male
Total
534
561
1,095
38
27
17
2
1
–
40
28
17
71.0% 100.0%
Retention rates of employees who took parental leave
61.0%
0.0%
The common retirement age in New Zealand is 65. In both tables, the region is defined as New Zealand.
8 5
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 New hires, leavers and turnover by age
Training by gender
Under 30
30–50
Over 50
Total
Training hours per headcount
Headcount
Headcount
Headcount
Headcount
New hires
Leavers
Turnover
61
67
29.7%
31.9%
36.2%
115
118
56.4%
56.2%
19.3%
28
25
13.7%
11.9%
11.1%
New hires, leavers and turnover by gender
Female
Male
Total
204
210
20.3%
Table does not include Flux UK.
Training by career level
13.1
16.2
14.7
508
535
1,043
New hires
Leavers
Turnover
Female
Male
Total
Headcount
Headcount
108
104
52.7%
96
47.3%
49.5%
106
50.5%
204
210
20.5%
20.0%
20.3%
New hires, leavers and turnover rates includes everyone who started and left in FY23.
If no age was available in the data an average age of 40 was used.
Executive
Senior manager
Mid manager
Mid non-manager
Junior manager
Non-manager
Unidentifiable*
Total
Training hours per headcount
Headcount
12.0
7.6
12.6
8.9
11.0
17.0
0.8
14.7
11
86
104
328
48
578
9
1,043
*
Includes Casuals and Contractors. Table does not include Flux UK.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
8 6
“
Retaining people
who have accumulated
experience in areas of
our business relies on
our providing the right
mix of stability and
growth opportunities.”
Our future of work
As the specific demands of working
through a pandemic subside, we’ve
turned our attention to how we can
best help the different generations
of our workforce to do their best
work. The goal is to encourage
a workplace where people feel
fulfilled in themselves and have
the time and engagement within
their teams to tackle issues that
require a collective focus.
The new normal for many is a hybrid
way of working that combines
time working from home and time
together. These arrangements
work in different ways for different
teams, and that’s as it should be.
But now that a large percentage
of our people have amended their
employment agreements to work in
this way, we’ve turned our attention
to structuring our business, systems
and processes to also allow people
to move into areas of future growth
for them, actively supported by
learning and development.
This isn’t a ‘set and forget’. We’re
committed to reviewing our
structures and arrangements to
best align them with the future of
work as we see it – for our people,
our teams and the business.
When our people are together,
it’s critical that we cultivate an
environment where they feel
safe. This year we piloted a new,
internally developed programme
called ‘Guiding the Waka’. The
programme weaves through
elements of Brene Brown’s Dare
to Lead research and is focused on
building trust and psychologically
safe environments for our people.
It’s also focused on ensuring our
leaders see vulnerability as a core
leadership strength.
Supportive leadership is crucial.
We want our leaders to support
their people throughout their time
with us and to provide them with
tailored support when needed.
At the same time, we want people
to take ownership of their work
and their careers within our
organisation. Retaining people
who have accumulated experience
in areas of our business relies on our
providing the right mix of stability
and growth opportunities.
Our most popular personal
development programme is
Dr Stephen Covey’s 7 Habits of
Highly Effective People, Signature
Edition 4.0, which we’re accredited
to run in-house. We’ve been running
it for four years and have had
more than 200 people complete
it. The programme supports
personal effectiveness in planning,
communication and teamwork,
both at work and at home.
Last year we established People
Hub, our learning management
system, to enable us to concentrate
in one place everything to do with
learning and development. We’ve
continued to evolve the digital
experience for our people by
adding performance management
to People Hub. We have work
underway to streamline our on-
and off-boarding and to improve
access to people data and insights.
All Meridian employees take part in
the performance appraisal process,
which contributes to incentive and
pay outcomes.
8 7
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 Planning to succeed
Succession planning is vital to
administered by the Institute
in our hydro teams in particular
preparing our organisation for
of Directors and is designed to
the percentage of people over
ongoing changes within the
help identify and grow the next
55 is relatively high. Their skills
energy sector. While there have
generation of directors in Aotearoa.
and knowledge are invaluable.
been no changes within our
This includes recognising talented
We continue to attract young
Executive Team this year, our focus
executives who are interested in
professionals to join our graduate
on growing the Flux customer
developing governance skills.
programme, and offer opportunities
base means that Nic Kennedy (Flux
CEO) now reports to a separate
Board with specialist industry
experience. There have been a
number of changes at the Meridian
Board level: David Carter and
Graham Cockroft have joined the
Board as Non-Executive Directors,
while long-standing Director Jan
We have developed an ‘Accelerate
Leaders Pool’ aimed at our tier 3
leaders (we’ve identified as having
executive potential). It offers them
access to advanced leadership
training including executive
mentorship. The programme offers
an opportunity for us to specifically
encourage more women to take up
Dawson retired at the last Annual
leadership roles within the business
Shareholders’ Meeting and Mark
and to prepare such leaders.
Cairns will retire at the next one.
for people to complete their trade
apprenticeships with us, so that
those who choose to retire can
transition smoothly out of their
current work arrangements. In
FY24 we will also be starting
retirement planning modules.
The wind generation side of our
business requires technicians with
particular expertise. Not surprisingly,
this pool of talent needs to grow
▲ Future Director Benjamin Bateman (Ngāi Tahu).
A restructuring of our Generation
substantially as our generation
We have also welcomed
business during the year opened up
growth opportunities are delivered.
Benjamin Bateman (Ngāi Tahu)
new roles and enabled us to develop
Attracting talent to this industry
as our next Future Director. The
opportunities to welcome new
will be key for our industry as the
Future Directors programme is
people into the team. Nevertheless,
transition to zero carbon takes place.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
8 8
Focusing on our critical risks
Our commitment to safety stems
from our responsibility to protect
the welfare and wellbeing of our
people and our supplier community
at all times. Our people work in
environments that can be isolated
and technically challenging, and
they can work on large and tall
structures and be close to large
volumes of water. Other risks
include the physical risks of slips
and trips and confronting weather
conditions and physical situations,
as well as the risks associated with
the challenges of poor mental
wellbeing.9
As our development programme
progresses, the onus is on us to
identify and address these risks
head-on. Doing so requires us to
constantly analyse and mitigate
potential hazards, which can
range dramatically in frequency,
consequence and probability.
Our comprehensive Safety and
Wellbeing Management System
includes role-specific health
and safety training plans and
site-specific Health and Safety
Committees as part of a layered
response to changing safety needs.
We continue to improve the system
to ensure that hazard-identification
processes are thorough and that
we think about and manage critical
risks to the best of our abilities.10
This year we focused on reviewing
and rebuilding our critical risks by
applying the ‘Bow Tie’ method –
an industry-standard approach
for risk identification, analysis and
management. We use it in working
through the stages of a potential
event, from cause to consequences.
Working with our front line
people, we actually increased
our identified risks from eight to
16. We then engaged with them
to simplify our controls, so that
everyone dealing with hazards
would be aware of the four or five
things they needed to get right.
Having identified these critical
controls, our next programme of
work will focus on bringing them
alive within the business.
A priority risk control is targeted
training. One of the difficulties
with traditional health and
safety training is that much of
it takes place in a classroom. As
a result, it can be difficult for
people to recall what they must
do as first responders in actual
work environments. We’ve been
working with Vertical Horizonz
New Zealand (VHNZ), the
country’s largest workplace health
and safety training provider, to
deliver life-saving emergency
response training to reduce
serious workplace injuries. A recent
training scenario, for example,
required Meridian staff, contractors
and other agencies at our Te Āpiti
wind farm to perform a difficult
rescue of a seriously injured worker
followed by a traumatic traffic
incident with multiple casualties.
We’d already adopted the best-
practice Global Wind Organisation
(GWO) training requirements as a
foundation. This meant that anyone
working in a wind turbine had
had to meet minimum standards
of practice in Working at Height,
First Aid, Manual Handling and Fire
Awareness/Extinguisher, or a higher
or equivalent standard. In working
with VHNZ, we built on the GWO
training course by adding our own
targeted approach to the modules.
Specifically, we honed in on the
unique set of problems posed by
wind farms and wind turbines,
from extreme weather conditions
to long response times, limited
communications, unviable pain
medication and much more. This is
now a five-day targeted refresher
course that takes place every year.
We’re still looking for a safety
leadership model that specifically
delivers the right balance between
good leadership behaviours and
the ability to get great engagement
and involvement in our safety
processes at the front line.
At this stage we’re very much of the
view that safety leadership is inherent
in strong business leadership.
9
External contractors participate in all our safety management processes but any issues, events or injuries are reported back through the Meridian work owner. IT-based systems are restricted to employees
and internal contractors for IT security reasons.
10 Workers can report hazards and incidents directly into our software tool (Mesh) via their computers or mobile phones. They can also raise any issues at the daily prestart or toolbox meetings or directly with their
leaders. There is no formal process for protecting people from reprisals as we have a positive culture around reporting and it is encouraged. The Health and Safety team who administer the system are independent of the
operational part of the business. Everyone is actively encouraged to exercise their right to stop work at any time if it is considered unsafe. If a worker stopped work for reasons of safety they would be commended.
8 9
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
9 0
Focusing on our critical risks continued
During the year we changed
our overall health and safety
management system to Mesh,
which we configured to enable us to
better capture information, report
events, make observations and
identify hazards. The new software
means we’re now able to align
events, critical risks and the lessons
from events, and better share those
lessons with our workforce. In the
next year we’ll look at building on
the capacity within the software
to instigate shared learning
libraries and to enable workplace
observations via mobile.
Our Learning Team process, with its
focus on learning and improving,
is now well embedded and helps
us understand how to improve our
systems and processes when things
don’t go well. By involving those
doing the work, including of course
our contractors, in understanding
how issues arise and in developing
safety improvements, our goal is to
normalise reporting as a safe and
natural process within our culture.
The introduction of Mesh will make
it easier in future to to capture
and share the information we’ve
gathered through Learning Teams.
Our site committees continue
to meet every month to identify
hazards and review incidents.
This year we brought together
committee representatives from
a range of sites to workshop how we
could improve our risk identification
and controls. They told us they
needed better information available,
which led us to revamp the relevant
pages on our intranet.
We remain an active member of
StayLive, an electricity industry
forum focused on working together
throughout the sector to improve
safety. In addition, because our
development programme will
see us increase our construction
projects in coming years, we’ve
started working more closely with
other sector safety groups.
Outlined previously has been
our early, voluntarily adoption
of climate-relate disclosures,
which include a focus on risk
management. We are committed
to continuous improvement
in this area, and over the year
implemented a change programme
focused on this, including
aiming for substantial voluntarily
alignment with the new Aotearoa
New Zealand Climate Standards.
During the year we modified our
risk-assessment methodology
to align it with evolving best
practice – for example, we are
now considering the exposure
to and vulnerability of elements
subjected to physical climate
risks. We also built on our existing
Revolution and Evolution models
to develop three climate scenarios
that are used in our risk-assessment
process: Net Zero Revolution,
Adaptive Evolution, and Hot House.
Please see our publicly available
FY23 Climate-related Disclosure
for full details on this work.
Towards the end of last year, MBIE
announced a nationally consistent
approach to dam safety, which will
come into force in May 2024. Prior
to the announcement, Aotearoa
New Zealand had been one of the
few countries in the OECD that
didn’t have an operative dam safety
framework. The lack of a consistent
framework posed risks to people,
property and the environment.
The new dam safety regulations
will require the owners of dams
that meet the height and volume
requirements to confirm the
potential risks those dams pose,
put in place safety plans and
undertake regular dam inspections.
Dams that fall within the scope
of the regulations could be given
impact classifications based on
their potential to cause harm in
the event of failure. The owners
of medium- and high-potential-
impact dams will be required
to have dam safety assurance
programmes that include regular
monitoring and surveillance
practices. The new dam safety
regulations will also require dam
owners to review their dams
against flood performance
criteria every five years as part of
comprehensive safety reviews.
Injuries
Total recordable injury frequency rate (TRIFR*)
Lost time injury frequency rate (LTIFR*)
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
4
9
.
2
3
2
.
1
3
0
.
1
6
4
.
5
6
6
2
.
1
4
2
.
1
7
.
4
8
6
.
4
8
5
.
1
1
0
.
1
6
7
.
1
8
9
0
.
16
14
12
10
8
6
4
2
0
1
.
9
0
8
.
4
7
.
4
3
.
8
.
1
1
.
3
4
8
.
7
9
7
.
2
FY20
FY21
FY22**
FY23**
FY20
FY21
FY22**
FY23**
*
The TRIFR is calculated per 200,000 hours and includes all lost-time, medical
treatment and restricted work injuries for Meridian New Zealand employees and
contractors only. While we have incident numbers for Powershop New Zealand
and offsite contractors, the TRIFR cannot be calculated, as the number of hours
worked for those periods has not been recorded.
** FY22 and FY23 data excludes Flux and offsite contractors.
*
The LTIFR is calculated per 1,000,000 hours and includes all lost-time work injuries
for Meridian New Zealand employees and contractors only. While we have incident
numbers for Powershop New Zealand and offsite contractors, the LTIFR cannot be
calculated, as the number of hours worked for those periods has not been recorded.
** FY22 and FY23 data excludes Flux and offsite contractors.
l
s
e
e
y
o
p
m
e
n
a
d
i
r
e
M
i
s
r
o
t
c
a
r
t
n
o
c
e
t
i
s
n
o
n
a
d
i
r
e
M
i
l
s
e
e
y
o
p
m
e
(
e
t
i
s
n
o
n
a
d
i
r
e
M
i
i
)
d
e
n
b
m
o
c
s
r
o
t
c
a
r
t
n
o
c
d
n
a
9 1
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
Focusing on our critical risks continued
Our Dam Safety Assurance
Programme is enabled by our
in-house Dam Safety and Civil
team (supported by Dam Safety
Intelligence for dam condition-
monitoring services) and is
recognised as best practice
in dam safety management in
New Zealand.
We continue to improve our
Healthy Minds programme. It’s
good to see more people taking
up the resources available through
the programme as we strive to
normalise the conversation that it’s
OK not to be OK all the time. In the
past two years we’ve helped 180
people to shift from struggling to
thriving. Our Care Teams work with
people who might need support
and/or rehabilitation to get back to
work. We also have our Employee
Assistance Programme available
for those who need access to
psychological services.
A comprehensive programme of
occupational health checks and
wellbeing support is provided
through an external occupational
health practice. The services include
annual hazard-related health checks
as required, the provision of general
health information and occupational
hygiene services as required, and
bookable consultations for those
with specific concerns.
Our reportable injuries held steady
this year. Our calculated total
recordable injury frequency rate
for employees and contractors per
200,000 hours worked was 1.76
(compared with 1.58 in FY22), with
17 people hurt (nine contractors and
eight employees). The main types
of injury were once again sprains,
strains and superficial injuries.11 There
were no significant instances of non-
compliance with health and safety
laws and regulations and we paid no
fines during the reporting period.
We determined significant instances
of non-compliance with reference to
the severity of impacts and sectoral
benchmarks. There were also no
significant instances of injury that
required reporting.
We have had no cases of fatalities
or recordable events with respect
to work-related ill health or what
is classified in New Zealand
legislation as occupational
disease. We have included harmful
contaminants in our list of critical
risks and developed a Bow Tie
risk assessment accordingly. The
most significant risk identified was
exposure to asbestos, as there is
still some Asbestos Containing
Material within our structures. As
required by regulation, five yearly
asbestos surveys were completed
in FY23. Any asbestos-related work
is undertaken by specialist removal
companies. Occupational Health
monitoring is conducted annually
and includes checks for the effects
of exposure to work-related health
risks such as poor lung function
or disease, hearing damage and
muscular pain and discomfort.
Occupational Health Nurses are
also on site at regular intervals to
provide education on both work-
related and general health risks.
Flux also has a strong health and
safety and wellbeing programme,
driven by a core set of principles
and legal responsibilities.12
Flux is a remote-first organisation
where staff predominantly work
from home, reducing our overall
health and safety risk profile.
We have mitigations in place for
ergonomic hazards. While Flux
also has a team of trained mental
health first-aiders, access to EAP
(Employee Assistance Programme)
services is available to all
permanent employees. Information
on how to access these services is
provided in on-boarding activities
and available in the Flux wiki.
You’ll find more detail on how we
organise ourselves to stay safe at
meridianenergy.co.nz/about-us/
investors/governance/policies.
11 While our critical risk programme identifies the significant hazards that could cause serious harm, hazard management generally is built in to our safety management system. All locations have developed hazard registers
that undergo reviews, and all work being undertaken must have a worksite safety plan or procedure in place that has identified any hazards and risks and their mitigations. We have prestart meetings and work-in-progress
boards that alert workers to other activities that might affect them.
12 Flux's permanent employees and contractors are fully covered by Flux’s health and safety management system The information and policies are available for all staff to access at any time. All aspects of health and safety are
9 2
managed by the Flux people team, with a clearly defined escalation process if required.
Equipment safety checks at West Wind Te Whanganui-a-Tara Wellington. ►
9 3
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
94
Building our
sense of belonging
We want our company’s culture
to be one that’s inclusive,
respectful and supportive as well
as representative of the society
and communities in which we live
and operate. It’s all about creating
a workplace where all our people
can go to work being their true,
whole, authentic selves and feeling
safe to be so.
A highly integrated business like
ours requires diverse skills and a
workforce that’s highly collaborative.
Our Belonging programme
recognises that diversity is a key
requirement in solving current and
emerging issues for our business,
and that, in order for diversified
teams to perform well, everyone
must feel recognised, welcomed
and valued for their experiences and
perspectives.
This year we’ve refreshed our
Belonging Strategy and reviewed
our Belonging Policy to reflect this.
◄ Customer care staff in Ōtautahi Christchurch office.
Specifically, we’ve identified seven
focus areas for Belonging in the
years ahead:
• Te Ao Māori – to encourage
increased cultural competence.
• Accessibility – to welcome
people with disabilities and
neurodiversity.
• Gender – to achieve general
Our technical areas – Generation,
Development, Dam Safety
Intelligence and Wholesale –
have the highest proportion of
those aged 60+.
However, all parts of the business
have employees at different
age-stages of their lives, and we
welcome this generational diversity.
balance.
• Rainbow – to encourage
LGBTQIA+ diversity.
• Ethnicity – to encourage
ethnic diversity.
•
Inclusion – in our culture,
people, systems, processes
and procedures.
• Wellbeing – to nurture our
people and enable them to
blossom.
We continue to be aware of the
different employee age profiles
in different parts of our business.
Our retail business and our service
centres have the highest number
and proportion of those in the
under-20 to 29 age bracket.
We continue to make steady
progress on better understanding
te ao Māori and actively factoring
Te Tiriti o Waitangi into our actions
and decisions. Last year we
introduced a new role – Kaihautū
Māori, or Head of Māori Culture
– to support us in growing our
understanding and to boost our
ability to build effective, authentic
and enduring relationships with
mana whenua so that we can
achieve greater success together.
We continue to train our people
in tikanga and the proper
pronunciation of te reo to reflect
our commitment to respecting te
ao Māori and connecting with our
stakeholders. We were pleased to
see a 30% increase this year in those
who identify as being of Māori
origin in our workforce.
More broadly, under the guidance
of our Kaihautū Māori, we’re actively
monitoring our employment of
Māori in our business and continue
to look for ways to celebrate and
educate our people on issues of
importance to Māori. We’re also
developing a Māori strategy –
starting with raising the cultural
awareness of our Executive Team.
This commitment is also reflected at
the Board level, with our People and
Remuneration Committee being
renamed the People, Remuneration
and Culture Committee. This new
name acknowledges culture as
an important input area at
governance level.
Our overall employee engagement
increased slightly this year, with
engagement scores in Meridian
and Powershop at 73%. This
score means we remain firmly
in the top quartile of the Large
Industrial category; however,
some divergence in scores among
different teams mirrors the different
levels of change taking place
throughout the business and a
need for us to continue to focus
on teamwork and collaboration. In
particular, we were pleased to see
strong growth in people’s sense
of our having a safety culture, that
people felt leadership teams were
generally highly engaged and
that development planning and
the perception of development
opportunities continued to trend
upwards. Stay commitment also
climbed this year, increasing by
3% between April 2022 and
April 2023.
9 5
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
96
Addressing gender injustice
We recognise that there is a
significant underlying bias against
women achieving their potential
in the workplace. As part of our
commitment to diversity and
inclusion, we want to encourage
more women into leadership roles,
close the ethnicity gap that exists
for Māori and Pasifika women and
speed up pay equity at all levels of
our organisation.
We have reached our aim of a
gender representation balance
overall of 40% men, 40% women
and the remaining 20% of any
gender. We know from the number
of females moving through our
recruitment process that, while we
have fewer female applicants than
male, we tend to appoint more
females. We also track non-binary
and transgender applicants, but at
this stage numbers are too low for
us to pinpoint progress patterns.
We note that, within those overall
ratios, some parts of our business
remain over-balanced in men or
women. Specifically, we have a
greater proportion of females at
lower levels of the business and
a higher proportion of males at
senior levels. This demographic
spread means that the overall
salary for men in all roles in the
organisation is higher than for
women, resulting in a gender pay
gap of 35.4% (on median salaries),
or 26.1% (on average salaries).
Our gender representation
balance varies according to
parts of the business. Employees
in our contact centre roles are
predominantly female, whereas
a higher proportion of men than
women tend to fill our engineering
and electrical roles. As part of our
Belonging strategy, our goal is
to bring more females into STEM
(science, technology, engineering
and mathematics) roles, continue
the upward trend of women in
leadership roles and ensure we’re
not biased towards females in
corporate and retail roles.
Gender pay gaps for those in
similar-sized roles have improved,
with the gap in most of our pay
bands for the median male salary
and the median female salary
now less than 4%. Increasing the
number of women in higher pay
bands, enabling women to move
through the bands to leadership
more quickly, and improving the
seniority of women within our
organisation overall will help close
the gaps and address gender
injustice. We disclose our gender
and ethnicity pay gaps on the
external MindTheGap website,
and on our website.
As an accredited member of the
GenderTick programme, we’re
committed to achieving gender
balance in leadership and senior
roles. At our most senior levels,
women are well represented,
with 57.1% of Board Directors and
36.4% of our Executive Team being
women. We have a three-part
strategy in place to lift the number
of women in leadership: increase
the number of women recruited;
increase upward mobility for
women; and increase our
retention of female talent.
Staff in our Te Whanganui-a-Tara Wellington office. ►
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
9 7
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
%
5
2
p
o
t
Z
N
i
Z
N
n
a
d
i
r
e
M
%
5
2
p
o
t
l
a
b
o
G
l
– ii
A closer look at our culture
Employee engagement*
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
%
0
5
8
.
%
0
8
7
.
%
5
9
7
.
%
0
4
7
.
%
0
2
7
.
%
0
3
7
.
%
0
3
7
.
FY19
FY20
FY21
Nov
FY22**
May
FY22
Nov
FY23
May
FY23
* Measured by ‘level of agreement’ – the percentage of staff who ‘agree’
or ‘strongly agree’ with the five questions that collectively determine our
Engagement Index (previously calculated as a weighted mean).
9 8
◄ Employees checking machinery at Benmore Power Station, Otematata.
– ii
Diversity by ethnicity by functional area
Diversity by ethnicity by career level
Middle
Eastern/
Latin
American/
Asian
African European Other
No
information
stored
Pacific
Peoples
Māori
14.3%
2.4%
2.4%
2.4%
78.1%
4.9%
9.8%
Senior manager
2.4%
14.3%
71.4%
–
–
Executive
–
–
Middle
Eastern/
Latin
American/
Asian
African European Other
No
information
stored
9.1%
–
72.7%
–
9.1%
3.7%
2.4%
67.1%
4.9%
19.5%
Pacific
Peoples
–
–
Māori
9.1%
9.0%
2.9%
5.7%
1.8%
67.0%
1.8%
11.8%
Mid non-manager
2.4%
1.4%
8.3%
2.8%
63.1%
3.8%
18.3%
Mid manager
3.9%
1.3%
5.3%
5.3%
75.0%
1.3%
7.9%
Board
Corporate
(HR, Legal, H&S,
Corporate affairs)
Customer
support
Energy trading
–
–
–
3.4%
86.2%
–
10.3%
Engineering
& Electrical
4.6%
1.5%
5.6%
4.1%
69.2%
6.7%
8.2%
Junior manager
2.8%
5.6%
2.8%
2.8%
66.7%
5.6%
13.9%
Non-managers
6.8%
3.3%
8.3%
2.0%
64.5%
3.5%
11.5%
Unidentifiable*
–
–
–
–
–
–
100.0%
Finance
2.5%
3.7%
11.1%
–
71.6%
3.7%
7.4%
Total
5.0%
2.4%
7.5%
2.5%
64.9% 3.5%
14.3%
Information
technology
2.0%
0.7%
12.8%
3.4%
31.8%
1.4%
48.0%
*
Includes Casuals, contractors and Flux UK.
Marketing
2.7%
–
2.7%
8.1%
81.1%
2.7%
2.7%
Sales
4.8%
11.1% 22.2%
–
55.6%
–
3.8%
–
5.1%
2.5%
76.0%
1.3%
6.3%
11.4%
4.4%
2.2%
3.3%
2.2%
73.6% 11.0%
3.3%
Senior
leadership
Strategy, project
management
& delivery
Total
5.0%
2.4%
7.5%
2.5%
64.9% 3.5%
14.3%
9 9
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
A closer look at our culture continued
Diversity by gender by functional area
Female representation
Female
Male
FY19
FY20
FY21
FY22
FY23
Female share of total workforce (%)
46.6% 47.9% 49.2% 47.6% 48.8%
Females on the Board
28.6% 50.0% 50.0%
71.4%
57.1%
Females in management positions
(as % of total management workforce)
Females in junior management positions,
i.e. first level of management (as % of
total junior management positions)
Females in top management positions,
i.e. maximum two levels away from the
CEO or comparable positions (as a % of
total top management positions)
Females in management positions in
revenue-generating functions (e.g. sales)
as a % of all such managers (i.e. excluding
support functions such as HR, IT and Legal.)
35.9% 34.5% 40.0% 39.3% 40.0%
41.4% 40.6% 46.7% 45.2%
49.1%
23.9% 24.2%
27.7% 30.2% 29.0%
33.0% 30.1% 38.2% 37.5%
39.1%
Board
Corporate (HR, Legal, H&S, Corporate Affairs)
Customer support
Energy trading
Engineering & Electrical
Finance
Information technology
Marketing
Sales
Senior leadership
Strategy, project management & delivery
Total
Diversity by gender by career level
Executive
Senior manager
Mid manager
Mid non-manager
Junior manager
Non-managers
Unidentifiable*
Total
57.1%
85.4%
76.3%
13.8%
26.2%
54.3%
32.4%
70.3%
46.0%
38.0%
30.8%
48.8%
42.9%
14.6%
23.7%
86.2%
73.8%
45.7%
67.6%
29.7%
54.0%
62.0%
69.2%
51.2%
Female
Male
36.4%
28.0%
38.2%
31.0%
72.2%
62.1%
63.6%
72.0%
61.8%
69.0%
27.8%
37.9%
–
100.0%
48.8%
51.2%
*
Includes Casuals, Contractors and Flux employees.
1 0 0
Ratio of basic salary and remuneration of women to men
Career level – base and total remuneration*
Functional area – base and total remuneration*
Female
Male
FY23 ratio
Base salary
FY23 ratio
Total rem
Female
Male
FY23 ratio
Base salary
FY23 ratio
Total rem
Executive
Senior manager
Mid manager
Mid non-manager
Junior manager
Non-managers
Unidentifiable
Total
0.96:1
0.96:1
0.98:1
0.98:1
0.97:1
0.86:1
4
23
29
89
26
332
–
503
6
59
47
199
10
200
3
524
0.96:1
0.92:1
0.98:1
0.98:1
0.96:1
Corporate (HR, Legal, Corporate Affairs)
Customer Support
Energy Trading
Engineering & Electrical
Finance
0.86:1
Information Technology
Marketing
Sales
*
Excludes, CEO, Board members and Casuals/ Contractors, but includes Flux employees
Senior Leadership
Strategy, Project Management & Delivery
35
212
4
48
44
48
25
29
30
28
6
66
23
138
37
100
11
34
47
62
1.13:1
0.91:1
1.03:1
0.81:1
0.83:1
0.89:1
0.91:1
1.01:1
0.83:1
0.80:1
1.10:1
0.92:1
1.03:1
0.80:1
0.81:1
0.90:1
0.89:1
1.01:1
0.81:1
0.78:1
Total
503
524
*
Excludes CEO, Board members and Casuals/Contractors.
Group definitions
Corporate (HR, Legal, Corporate Affairs): HR functions, Legal team,
Corporate Affairs and Sustainability team
Customer Support: Call centres/customer service teams
Energy Trading: The Wholesale team, which is made up mainly of analysts and traders
Engineering & Electrical: Teams involved in generating electricity and maintaining assets
Finance: Accounting/financial, procurement, and contract management teams
Information Technology: The ICT team, product development and tech support in Flux Federation
Marketing: Marketing team
Sales: Meridian Sales team, Sales functions in Flux Federation
Strategy, Project Management & Delivery: Teams working on business strategy, large scale projects,
or business improvement
Senior Leadership: Leadership team or Executive team.
1 01
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023
A closer look at our culture continued
Diversity by age by functional area*
Diversity by age by career level
Under 30
30–50
Over 50
Under 30
30–50
Over 50
Board
Corporate (HR, Legal, H&S, Corporate affairs)
Customer support
Energy trading
Engineering & electrical
Finance
Information technology
Marketing
Sales
Senior leadership
Strategy, project management & delivery
Total
–
19.5%
35.8%
6.9%
14.9%
9.9%
10.8%
13.5%
15.9%
–
5.5%
17.4%
14.3%
51.2%
48.4%
51.7%
48.2%
63.0%
69.6%
81.1%
65.1%
60.8%
60.4%
56.6%
85.7%
29.3%
15.8%
41.4%
36.9%
27.2%
19.6%
5.4%
19.1%
39.2%
34.1%
26.0%
*
If no age was available in the data, we used an average age of 40.
Executive
Senior manager
Mid manager
Mid non-manager
Junior manager
Non-managers
Unidentifiable*
Total
*
Includes Casuals, Contractors and Flux employees.
–
–
3.9%
4.5%
19.4%
29.6%
–
17.4%
18.2%
64.6%
67.1%
64.1%
66.7%
50.5%
57.1%
56.6%
81.8%
35.4%
28.9%
31.4%
13.9%
20.0%
42.9%
26.0%
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
1 0 2
Doing our part to
respect human rights
It’s essential that the global
transition to a decarbonised
economy powered by renewable
energy, is a just transition that’s
underpinned by respect for
human rights. The speed and
urgency of this transition means
that Meridian is engaging with
complex and distant supply chains
in an unprecedented way. All
of this makes it more important
than ever that we take steps to
protect the rights of people at
every stage of our supply chain.
In our own Group, we work
within the framework of New
Zealand’s human rights legislation,
prohibitions of discrimination, and
New Zealand’s labour laws, which
include protections for the right
to collective bargaining, equal
opportunities and preventing
unfair treatment on the basis of
irrelevant personal characteristics.
In addition, Meridian is committed
to respecting internationally
recognised human rights, in line
with the United Nations Guiding
Principles on Business and
Human Rights. These include all
rights under the United Nations
International Bill of Human Rights
and the principles concerning
fundamental rights in the
International Labour Organization’s
Declaration on Fundamental
Principles and Rights at Work.
Given our unique place in the
world, we also recognise the
indigenous rights of iwi, which is
consistent with the United Nations
Declaration on the Rights of
Indigenous Peoples and Te Tiriti
o Waitangi. Our board-approved
Group Code of Conduct, updated
in FY23, reflects this focus.
Our participation in the United
Nations Global Compact means
we’re committed to continually
aligning our strategies and
operations with 10 universally
accepted principles in the areas of
human rights, labour, environment
and anti-corruption. In FY23 our
Sustainability team participated
in the United Nations Global
Compact Business & Human Rights
Accelerator programme, putting
us in touch with the latest thinking
and initiatives in the area of human
rights. This year we focused on
commencing and developing our
assessment and due diligence
process. This involved working with
an internal group of stakeholders
from throughout the business to
identify and prioritise actual and
potential human rights risks to
four key cohorts of stakeholders
(Meridian’s workers, workers in the
value chain, local communities and
end-users/customers). The impacts
were then assessed against
severity and likelihood criteria
using a victim-centred approach.
This assessment took into account
the scale, scope and irremediability
of the impacts as well as
considering the operating context
(e.g. geography), the presence of
known vulnerable groups (women,
children, indigenous peoples,
LGBTQIA+, ethnic minorities
and migrants), relevant business
relationships and the mitigation
controls we have in place.
In FY24 our initial focus will be
on improving the certainty of
our risk assessments to ensure
that the adopted process is fit
for purpose for our organisation
and integrates with our Group
Risk Enterprise approach. From
there we’ll identify our salient
risks and establish a human rights
framework that covers governance,
risk assessments, due diligence,
grievance and remediation,
training and monitoring.
Our focus on human rights
builds on the actions we’re
already taking to assess and
mitigate the risks of modern
slavery to our business and
supply chain. This reflects the
behaviours and expectations
outlined in our Group Code of
Conduct and Supplier Code of
Conduct. In December 2022 we
released our third Modern Slavery
Statement. This annual disclosure
summarises the steps we’ve taken
to assess, manage and continue
to improve our approach to
modern slavery risks13.
13 The term modern slavery is used to describe situations where coercion, threats or deception are used to exploit victims and undermine or deprive them of their freedom.
It is an umbrella term and takes many forms including human trafficking, forced labour, slavery and slavery-like practices, debt bondage, and the worst forms of child labour.
1 0 3
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
Doing our part to
respect human rights continued
Meridian’s employment conditions
meet and in many cases exceed
the requirements of New Zealand
labour law, which are of a standard
far beyond that which would allow
a risk of modern slavery to exist.
Therefore, the focus of our Modern
Slavery Framework is on Meridian’s
supply chain where we have less
direct control over employment
conditions and increased risk.
In accordance with Meridian’s
Modern Slavery Framework, we
review our procurement categories
every two years to identify those
that have the highest risks of
modern slavery and warrant further
due diligence and other actions
to help reduce those risks. The
assessed risk categories include
high-risk geographies (including
countries subject to United Nations
sanctions), vulnerable populations
(including work that involves base-
skilled workers) and high-risk raw
materials, services and/or business
models (such as where there is
outsourcing of significant labour
needs). We have actions in place
to mitigate those risks, including
requiring all Tier 1 suppliers14 from
these categories to complete our
Modern Slavery Questionnaire on
a two-yearly basis and as part of
initial supplier-selection processes.
Due diligence on modern slavery
is required as part of supplier
engagement and all our agreements
now spell out what we expect in
terms of preventing modern slavery.
More detail is available in our
Modern Slavery Statement 2022.
Taking responsibility
for behaving ethically
This year we’ve taken action to
further enhance and embed ethical
practices in our business, following
our FY21 ethical practices audit
and resulting improvement plan
created in FY22. Our Group Code
of Conduct has been updated
with a new focus area outlining
our ethical standards, what they
mean for our people, and where
our people can go for further
guidance if they face ethical
dilemmas. We’ve refreshed our
Group Code of Conduct training
for our people and look forward
to rolling this out throughout the
business during FY24. Our ethical
standards include ensuring that
we have genuine consideration for
anybody materially affected by our
business decisions, ensuring we
use and manage natural resources
responsibly, avoiding engagement
with high-risk industries (or seeking
Executive Team approval first) and
evaluating those with whom we
enter business relationships to
ensure they act consistently with
our purpose and values, including
taking action on climate change
and upholding human rights.
We apply our ethical standards
and commitment to respect human
rights in our procurement process,
for example through checking
companies against anti-modern
slavery measures when sourcing
materials for solar panels, and
making sure that we use reputable
companies as we look for new ways
to reduce our emissions.
In the past year, 95% of our annual
spend on goods and services
has been from local suppliers
within Aotearoa.15
1 0 4
14 Tier 1 suppliers are those who directly provide services/products to Meridian.
‘Local’ is defined as any Tier 1 supplier located in Aotearoa New Zealand.
15
Being good humans
We have multiple measures in
place to ensure we live our value
of being good humans.
Every person joining Meridian
must confirm that they understand
our Group Code of Conduct and
agree to work according to its
principles. The members of our
Executive Team are responsible for
ensuring that those working in their
teams meet the requirements of
our internal policies, including the
Group Code of Conduct. As part of
our Compliance Policy, Executive
Team leaders must provide monthly
compliance statements to the CEO.
Individuals can seek advice and/
or raise any concerns about our
responsible business conduct
policies and practices. A range
of channels, outlined in our
Group Code of Conduct and
Whistleblowing Policy, is available
to do this, including contacting a
line manager, the People team or
the Legal team or speaking directly
with a member of the Executive
Team. This year there were no
reports of people raising concerns
about our responsible business
conduct policies and practices.
All our team members undertake
legal training through our online
People Hub to ensure they
understand their legal obligations
and that they remain familiar with
key policies. 100% of our people
completed this training this year.
Last year we extended this legal
oversight to include our suppliers
with the launch of our Procurement
Hub and online sustainable
procurement e-learning module.
These tools are designed to
assist our people in advocating
confidently for sustainable practices
throughout our supply chain and
to ensure we source ethically and
uphold human rights. Due diligence
on modern slavery is required as
part of supplier engagement
and all our agreements now spell
out what we expect in terms of
preventing modern slavery. We
also use a range of other actions to
embed our Group commitments
and policies throughout the
company. These include: measures
on Meridian’s Executive Team
scorecard related to the company’s
impacts on the economy, the
environment and people; the
development of our Sustainable
Infrastructure Framework to
support sustainability practices
on major infrastructure projects;
regular sustainability audits at our
development sites (e.g. Harapaki);
and the integration of impacts on
people and the environment with
our Risk Management Policy.
1 0 5
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
Connected to communities
Our community fund Power Up
continues to support local projects
in Te Āpiti, Mill Creek, Manapōuri,
West Wind, White Hill, Te Uku
and Waitaki. Each year we have
$557,333 available for allocation to
Meridian’s Power Up community
fund. In the 16 years to 30 June
2023 in which Power Up has
been running, we’ve contributed
$9,698,281 towards 1,323
community-led projects. We’ve
been putting our support where
it’s needed the most, working
with and empowering community
groups and projects to promote
environmental, cultural, volunteer,
education and health initiatives. To
encourage communities to make
the most of Power
initiated Power Up Drop In sessions
in Tuatapere and Te Anau to enable
people to meet face to face and
find out more about how the fund
might help them.
Since 2020 we’ve sponsored
school leavers through Meridian
Energy Scholarships – two school-
leaver scholarships at Wairau
Area School and one at Fiordland
College, and a scholarship for
the Dux at Fiordland College.
Congratulations go to Zesen Liu
(Dux – Meridian Energy Excellence
Award, Fiordland College), Maggie
Knowles (Values Scholarship,
Fiordland College) and Malakai
Mangion (Values Scholarship and
Power Up Scholarship, Waiau
Area School). We’re now looking
to widen this programme to
include schools associated with
all our generation communities
and trades associated with our
generation business.
As part of the 50-year anniversary
celebrations at Manapōuri Power
Station, we hosted current
and former Guardians of Lake
Manapōuri, Monowai and
1 0 6
◄ Sir Alan Mark KNZM CBE, inaugural Chair of Guardians of Lake Manapōuri,
Monowai and Te Anau, and Madeleine Peacock, a former Chair of Guardians.
Te Anau and family representatives
at Manapōuri Station in May. The
Guardians of Lake Manapōuri,
Monowai and Te Anau is a
statutory body appointed to make
recommendations to the New
Zealand Minister of Conservation
on any matters arising from the
environmental, ecological and
social effects of the operation of the
power station on local townships
and their shorelines and the rivers
flowing in and out of those lakes. It
was established in 1972 by the Prime
Minister of the day, Norman Kirk.
Our team of Community
Relationship Managers has
expanded to eight – meaning we
now have a greater presence in our
asset communities. We continue to
engage with people, groups and
communities near to where we work.
An increasing number of our
community-related activities are
linked to the environment. For
example, community groups are
involved with planting around the
country for Forever Forests, and we
support the Capital Kiwi Project,
an initiative to make the whole of
the west of Wellington predator
free. As part of that programme,
60 kiwi were set free in Mākara
and are now running around the
hills of the capital. Through the
Power Up programme, we’ve also
supported a full range of grassroots
initiatives such as predator trapping,
riparian planting and improving
water quality.
A significant area of growth
in the years ahead will be the
Decarbonisation Fund. The fund is
a key proof point in demonstrating
the value of Certified Renewable
Energy by showing how we’re
taking action to decarbonise the
country. So far, at the end of our
initial contributions and our first
round of funding, we’ve contributed
over $333,000 to advance
decarbonisation and energy-
efficiency projects.
Increasingly, we’re seeing
the support we provide to
communities – from Power Up
to the Decarbonisation Fund
and the Energy Hardship Fund –
as a family of funds that we can
apply to advance people and
communities in more holistic ways.
Our thinking about community
funding is mirrored in a broader
approach to ethical practice,
where we’re looking at how we
can most effectively bring together
our Māori, people, Belonging
and ethnicity strategies to be
better humans, inside and
beyond Meridian.
Looking ahead, we’re planning
to research our social impacts
with the community. By gathering
data from a range of sources, we
hope to understand better how
we’re perceived and the impacts
our activities are having. That
feedback will shape our future
engagement programme.
1 07
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
1 0 8
Expanding our
productive partnerships
Our journey to building the best
relationships we can with our
partners continues. In particular,
in our relationships with iwi, we want
to be a respectful and constructive
partner, recognising their concerns
and priorities and doing our best to
resolve them together.
Our relationships with Ngāti Hineuru
and the Maungaharuru-Tangitū
Hapū at the Harapaki wind farm
continue to strengthen. Their
involvement in the project, which
has included employing a number
of locals, has grown over time –
and with it has grown our under-
standing of the benefits of adopting
a strong Te ao Māori approach.
We look forward to deepening our
partnership and to learning more
from local rūnaka.
Four Murihiku rūnaka, who
collectively are the Murihiku
Hapū, hold mana whenua and
mana moana over the Murihiku/
Southland region. Each of the
Murihiku rūnaka hold mana
whenua in their own right and
have kaitiaki responsibilities for
their respective lands and seas.
Murihiku Regeneration, the Awarua
rūnaka and the Hokonui rūnanga
are part of our Southern Green
Hydrogen partnership investigating
new industries and opportunities
for renewable energy alongside
the Tīwai Point smelter. This year
we signed a Memorandum of
Understanding to work together on
a number of green energy projects
in the Murihiku/Southland region.
The key principles of the
Memorandum of Understanding
are that we:
• apply Ngāi Tahu mana whenua
as the basis for our approach
•
recognise that Te Rūnanga o
Ngāi Tahu will act to ensure
Ngāi Tahu aspirations of tino
rangatiratanga are realised
• use kotahitanga to build unity
and togetherness
• use matāuranga Ngāi Tahu
to help build a regenerative
economy that will support
future generations through
innovation, a focus on
protecting the environment
and effective decision-making
• actively work together to
support and nourish the te
ao tūroa ki Murihiku
• develop a long-term reinstatement
and regeneration plan
• actively support the development
of a green energy ecosystem
that enables Murihiku Hapū
aspirations and works in the
national interests of Aotearoa.
The Southern Green Hydrogen
Project itself is progressing well,
with partners chosen and project
workstreams currently being stood
up and commercial arrangements
in negotiation. We’ll establish
a local office for the project in
Invercargill later this year.
We recognise the mana whenua of
Ngāi Tahu, particularly in relation to
our hydro schemes in the Ngāi Tahu
takiwā. We also benefit from having
a Ngāi Tahu presence on our Board.
We also recognise and respond to
the kaupapa of ki uta ki tai (from
the mountains to the sea) and
work closely with local Murihiku
rūnunga (Awarua, Hokonui, Ōraka
Aparima and Waihōpai) through
Te Ao Marama and Manapōuri. We
work closely with Waitaki rūnanga
(Arowhenua, Moeraki and Waihao)
through the Waitaki Governance
Group, as well as trusts, to protect
mahinga kai and native fish in the
Waitaki and Waiau catchments.
Consents for the Waitaki
catchment expire in April 2025.
Our negotiations with local rūnaka
Arowhenua, Moeraki and Waihao,
who exercise mana whenua in the
area, on the Waitaki reconsenting
process are progressing very well.
A relationship agreement is close
to being finalised that will span
more than three decades and will
enable us to operate the Waitaki
hydro plan and work jointly with
rūnaka to address environmental
and cultural impacts.
It’s anticipated that this will support
the delivery of cultural and economic
opportunities for Ngāi Tahu whānui
in Waitaki.
Through this process we developed
a better understanding of the
impacts of the development for
Ngāi Tahu and how we could
achieve a rebalance. The commercial
details remain confidential, but the
important news for investors is that
we have support for consenting
based on current conditions from
all the key stakeholders. The signing
of these agreements has ensured
the long-term continuation and
development of New Zealand’s
largest renewable scheme. As the
country’s largest storage reservoir,
this catchment has a key role in
the country’s renewable energy
capability, sustaining vital storage,
hydro flexibility and the important
levels of generation output.
We lodged our resource consent
application in late July 2023.
We’ve also signed a new
agreement for the Waitaki
catchment biodiversity mitigation
programme with DOC. Alongside
co-funder Genesis Energy, a
significant increase in funding will
see the scope of our programme
expand dramatically.
At Lake Manapōuri, there’s still
some time to run on existing
resource consents, but a planning
process regarding water allocation,
water quality and reconsenting
standards is under development
by Environment Southland (the
Southland Regional Council) as Plan
Change Tuatahi. The current plan
was notified in 2015 with interim
rules put in place. After appeals,
these were finalised this year. Plan
Change Tuatahi will be a more
detailed plan that sets out flow
limits, allocations and water quality
for all catchments in the Waiau and
all Southland catchments. This is
due to be notified in 2024.
We have science work underway
to better understand the impacts
of flows and flushing flows,
allocations and water quality,
changes in land use over 20 years
and the introduction of didymo.
Once we have this understanding,
we’ll work with our partners to find
the best approach given differing
aspirations and values.
Aoraki Mt Cook, Tasman Lake and the Tasman river. ►
1 0 9
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 New Zealand disconnections*
0.4%
0.3%
0.2%
0.1%
0.0%
%
2
2
.
0
%
8
0
.
0
%
5
0
0
.
%
7
1
.
0
%
8
0
.
0
%
0
0
.
0
i
n
a
d
i
r
e
M
Z
N
p
o
h
s
r
e
w
o
P
e
g
a
r
e
v
a
d
n
a
l
a
e
Z
w
e
N
a
o
r
a
e
t
o
A
%
8
0
.
0
%
2
0
0
.
%
1
0
.
0
%
5
0
% 0
2
0
.
.
0
e
l
b
a
l
i
a
v
a
n
u
a
t
a
D
FY20
FY21
FY22
FY23
* Data on Aotearoa New Zealand average disconnection rates from the
Electricity Authority (emi.ea.govt.nz/Datasets/Retail/Disconnections).
Addressing energy wellbeing
New Zealand’s electricity retail
prices remain among the lowest
in the Organization for Economic
Cooperation and Development
(OECD). Data from MBIE shows
New Zealanders are benefiting
from the range of retail choices
available to them. However, the
rising costs of living mean more
New Zealanders are finding it hard
to pay for essentials like power.
As an essential services provider,
we want all people to have access
to the energy they need for
wellbeing in their lives. 87% of our
meters are now smart, enabling us
to understand better how energy
is being used. We’ve committed
to taking a leadership position on
energy wellbeing – advocating
for customers who are facing
difficulties affording energy and
providing funding to help people
out of hardship.
We’re committed to complying
fully with the voluntary Consumer
Care Guidelines issued by the
Electricity Authority. These are
the strongest guidelines yet for
helping those who are vulnerable
and we’re very much of the view
that they should be mandatory.
Our goal has always been, no
disconnections for payment
reasons. In the past five years our
disconnection rates have fallen by
at least 80%. We continue to offer
customers products like LevelPay,
and our trained Credit team offers
customers alternative payment
options and access to assistance
through a range of agencies.
Stepping back, achieving a long-
term, sustainable use of energy
in this country requires us to
solve a trilemma between energy
sustainability, energy supply
and energy equity. The last of
these is about not leaving people
behind, and assistance isn’t just
about money. Addressing energy
hardship often means helping
people to get themselves back on
track and enabling them to access
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
11 0
support to 430 households. That
should ramp up to 1,500 by the
end of this calendar year and
double in the following six months.
As a company, we’ve started
bringing teams together to
think about how we can resolve
decarbonisation and hardship
together. For example, giving
people ‘energy sovereignty’ could
involve providing customers in
hardship with access to batteries
or solar and virtual power plants
or demand-response-flexibility
products. We have multiple teams
thinking about this right now.
the energy they need. To do this,
we look at four things: energy
supply; housing quality; energy
efficiency; and financial situation.
In the last calendar year we
introduced our pilot Energy
Wellbeing Programme, aimed at
helping customers obtain and afford
adequate energy services to support
their wellbeing in their homes.
The pilot focused on supporting
customers in around 130 house-
holds experiencing hardship. We
were very pleased with the tangible
difference the programme made for
Kiwi families who were struggling.
We saw reductions in debt and
usage where we wanted to see
them, and increases in use where
we were looking for them. On the
basis of that success, in December
2022, the Board agreed to expand
the Energy Wellbeing Programme
to help 5,000 Meridian and
Powershop households by setting
aside $5 million over two years.
The new programme incorporates
key findings from the pilot. The
first of these was that energy
wellbeing needed to include
include wraparound, holistic
support considering all aspects
of energy hardship. The second
learning was that we could use the
data we already had to identify
those who might need assistance.
For example, households that use
unusually low amounts of energy
in winter could be struggling to
pay their bills. By partnering with
others, we can encourage them
to become part of the Energy
Wellbeing Programme.
The enlarged programme involves
building partnerships with
communities that enable us to
offer different levels of energy-
efficiency interventions. We’ve
started slowly, so that we can build
the robust foundations needed to
scale the programme effectively.
At year end we’ll have provided
111
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 • vwt
Our impacts anchored in people
A summary of our people-related impacts is provided below, including the actions we are taking to manage, avoid or mitigate the impactss.
Impact
Description
Actions to manage, avoid or mitigate this impact
Some
New Zealanders
experience
energy hardship
As a retailer of electricity,
Meridian is directly linked to the
affordability and accessibility of
electricity which affects residential
and business customers.
Address inequality
of access to
new energy
technologies
Meridian can contribute to a just
transition and greater energy
equity by supporting people’s
access to, and education on, the
opportunities and risks of distributed
generation (rooftop and small scale
solar), storage (batteries) and EVs,
especially where these options can
reduce costs for electricity users
over the longer term.
The actions we are taking to mitigate the impacts of energy hardship being experienced by some
New Zealanders include:
•
•
•
•
the commitment of a $5 million to support our Energy Wellbeing Programme, targeting 5,000 households
over two years
continued connection for customers in debt who are actively engaging with us in line with our
Consumer Care Policy
full alignment with the Electricity Authority’s Consumer Care Guidelines
funded membership to ERANZ (Electricity Retailers Association) and associated activities:
– Energy Mate programme
– Connect Me pilot
– Low Fixed User Removal Credit
– Energy Hardship working group
•
specific funding and support to customers in financial need in the wake of cyclones and flooding, including
dedicated support available through our Energy Wellbeing team in collaboration with other retailers
In late FY23 we commenced a social impact analysis of our Energy Wellbeing programme. We expect to report
findings in FY24.
We are managing how we can contribute to greater energy equity by:
• expanding the mandate of our Energy Innovation team to include an additional focus on equitable
transition, affordability and access to new technology
• ensuring our Energy Wellbeing Programme sees Meridian working in collaboration with external
groups to progress co-funding opportunities with universities, electricity distribution businesses and
non-profit organisations
• making it easier for customers to purchase EV chargers by making it possible for them to pay back the
costs through their energy bills.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
11 2
• vwt
Impact
Description
Actions to manage, avoid or mitigate this impact
Impacts of
supply chain/
ethical sourcing
Meridian may contribute to
procurement practices that
have the potential to have
negative impacts on the
environment, people and
human rights, and affect the
reputation of Aotearoa.
Supporting
opportunities
for local
communities
Meridian is directly linked to
supporting various initiatives and
groups that foster the wellbeing
of communities living close to
generation assets and more
widely across Aotearoa.
Creating employment and career
opportunities for local communities.
We are working to mitigate this impact through a number of policies, frameworks and mitigation initiatives.
For example:
•
in FY23 selected staff completed the United Nations Global Compact Business & Human Rights
Accelerator programme and commenced our first human rights risk assessment of our value chain
• Meridian continues to complete modern slavery due diligence across our supply chain, consistent with
our Modern Slavery Framework. We are currently focusing on Tier 1 suppliers that have been identified
as high risk. In future years we will work on maturing and merging our modern slavery and human rights
due diligence processes
• we updated the Group Code of Conduct during FY23 to include an updated Human Rights commitment,
an ethical practices focus area and a specific ‘responsible procurement’ focus
• all Meridian staff have completed annual Group Code of Conduct e-training, and targeted business units
have completed sustainable procurement and modern slavery training
• Meridian has begun a supplier engagement programme that focuses on improving the greenhouse gas
reporting capabilities and carbon-reduction ambitions of our top tier suppliers
We have a range of commitments and initiatives in place to support the local communities in which we
operate. These include:
• Power Up, our community fund that supports local projects at our hydro and wind sites, including
Te Āpiti, Mill Creek, Manapōuri, West Wind, White Hill, Te Uku and Waitaki
• our Decarbonisation Community Fund has invested more than $325,000 into community
decarbonisation projects
• engaging with our asset communities via a national network of dedicated Community Engagement Managers
• ensuring that our major development projects have specific local employment and investment KPIs and targets
• working with schools to provide scholarships promoting tertiary education
• providing career pathways for students into STEM roles
• providing recreational opportunities such as angling and rowing to local communities around our
•
•
generation assets
several sponsorships to support local events where funding goes back into emergency services or
community assets like cycle/running trails. For example, we sponsor the Meridian Hydro Half Marathon,
the Meridian Twizel Hard Labour Weekend and the Meridian Milford Mountain Classic
local staff volunteering to support community projects and those in need, and lending expertise and
equipment to support community initiatives
11 3
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
Our impacts anchored in people
Impact
Description
Actions to manage, avoid or mitigate this impact
Business
performance:
diversity
and equal
opportunities
Meridian continues to focus on
increasing equal opportunities for
everyone, irrespective of factors
like age, gender, ethnicity, country
of origin, disability and sexual
orientation. Diversity encourages
new thinking and innovation that
can support Meridian’s future
business success.
We mitigate the impacts we can have on diversity and equal opportunities by investing in our diversity
and inclusion programme, which centres on seven focus areas: Te Ao Māori, Accessibility, Gender, Rainbow,
Ethnicity, Inclusion and Wellbeing. Relevant mitigations include:
• being an accredited member of the Gender Tick programme
• providing pay gap data on both gender and ethnicity to MindTheGap
• being a member of the Accessibility Tick programme
• being certified by Rainbow Tick as a workplace where people are free to be their authentic selves and
•
proud Pride Pledge members
refreshing our Te Kete Tikanga Māori programme and launch of a pilot of Education Perfect
‘Te Ao Māori for Professionals’
Our refreshed Belonging Policy has a range of KPIs that include a focus on:
• achieving gender balance with a focus on leadership and senior roles
• our goal to increase the recruitment and retention of diversity across our workforce
• working to embed a culture of inclusiveness through vulnerable leaders that create psychologically
safe work environments.
114
Safety briefing at West Wind farm, Te Whanganui-a-Tara Wellington. ►
11 5
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
E
L
B
I
S
S
O
P
Y
L
N
A
M
U
H
11 6
MERIDIAN DOING IT RIGHT. NOW.
Helping KidsCan
to decarbonise
Meridian has been the proud Principal Partner of
KidsCan since 2013. This amazing charity provides
essentials to children affected by poverty so they
can participate in learning. KidsCan supports more
than 1,000 schools and early childhood centres
throughout Aotearoa. As Principal Partner, our
$1 million annual investment includes $500,000
to provide thousands of Kiwi kids with essentials
such as food, raincoats, shoes, socks and basic
hygiene and healthcare items, and $500,000 to
go towards helping to fundraise.
At the same time, we want to accelerate
decarbonisation throughout the nation and
help others to do the same. Our Decarbonisation
Fund takes net proceeds from our Certified
Renewable Energy product and reinvests them
into community group decarbonisation projects
throughout Aotearoa.
To be eligible for funding, a community-
based decarbonisation project must involve
electrification or lead to the creation of new
renewable generation that results in a reduction
in GHGs and contributes directly to communities
throughout Aotearoa. The Decarbonisation Fund
specifically funds projects either that wouldn’t
occur without the funding or that funding would
help to realise more quickly.
This year we brought the objectives of our
principal partnership and our Decarbonisation
Fund together, installing an EV charging station
and replacing two of KidsCan’s vehicles with
electric ones.
The KidsCan team spends a lot of time shuttling
between their Auckland premises and the schools
and early childhood centres they support in the
regions. Now they can continue doing their great
work in a more climate-friendly way.
“We’re delighted that Meridian is giving us the
incredible opportunity to go electric,” KidsCan
Chief Executive and founder Julie Chapman
says. “Our programme’s team spends a lot of
time on the road supporting schools and early
childhood centres, and it’s great to be able to
do this more sustainably.”
◄ A KidsCan school visiting Matiu/Somes Island, Te Whanganui-a-tara Wellington.
117
HUMANLY POSSIBLEMERIDIAN INTEGRATED REPORT 2023 Better,
commercially
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
11 8
Our ambitious
programme to
decarbonise the
country is affordable
alongside attractive
shareholder returns.
◄ A campaign image from the latest television advetrtising – 'Nature'.
11 9
BETTER, COMMERCIALLYMERIDIAN INTEGRATED REPORT 2023 Strong
performance
After five years of remarkable retail brand growth, we’ve
turned our attention to investing in energy solutions that
empower New Zealanders to live more sustainably, enable
the country to tackle decarbonisation practically, and
deliver returns that endorse investors’ faith in what
we’re looking to achieve.
In this section:
• Earnings were strong
• Wholesale change for the better
• Dividend for the year
•
•
•
•
•
•
Retail pricing increases
Customer connections and volumes
Fulfilling different needs through our retail brands
Maintaining our credit rating
Our impacts anchored in our commercial activities
Enthusiastic response to our bond issue
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
1 2 0
Earnings were strong
Below-average storage in Lake Pūkaki at the
beginning of the year gave way to the highest
winter inflows on record in our Waitaki catchment
in July and August 2022, when a series of large
storms lifted storage significantly. This was
followed by three dry months at the beginning of
2023, particularly in the Waiau catchment.
Overall, the dominance of El Niño for most of
the year meant rainfall was well above average,
resulting in a high usage of our hydro assets and
even spills. The good news for the country was
that thermal generation was at its lowest level
in six years.
Sales volume growth, particularly in our small-
to medium-enterprise (SME) business and
agricultural and large business sectors, combined
with higher net average prices and good
management of hedge positions by our wholesale
team through the dry months, meant a good year
financially. Mass-market sales volumes were up
5% on the prior year, which helped support an
10% increase in operating earnings (EBITDAF).
At year end, our balance sheet was in a strong
position, buoyed by proceeds from the Australian
business last year. This gives us flexibility to fund
our investments, and the Board is confident
that our ambitious programme to decarbonise
the country is affordable alongside attractive
shareholder returns.
Wholesale change for the better
Other factors outside hydrology, including
thermal costs, ongoing concerns about gas
availability, and supply pressures caused by the
growing global demand for renewables, have
continued to put upward pressure on wholesale
prices. The cumulative effect has seen wholesale
prices at above long-term averages, albeit
generally lower than they’ve been in recent years.
With $2.5 billion in new generation investment
across the whole sector now under construction
and due to be delivered to the market from
2023, we anticipate the trend towards more
moderate wholesale pricing will continue.
One of the key reasons for prices having
remained above long-term averages, in our
view, is that a market previously regarded
as energy constrained is now regarded as
capacity constrained.
Because thermal plant takes some time to fire
up, there’s sometimes not enough capacity
in the system to handle sudden peaks. Large
volumes of water from plentiful rainfall led to a
general prevalence of low pricing for much of
the year, but then, when demand does exceed
capacity, pricing on the peaks can feel extreme.
Having greater flexibility would help in
managing that gap, and it’s something we’ve
been actively addressing this year. Our response
plays out on two fronts: directly addressing the
overall capacity challenge; and ensuring we
have access to the energy we need for all our
customers’ needs.
◄ Electricity in use – at work and play.
1 2 1
BETTER, COMMERCIALLYMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
Wholesale change for
the better continued
In terms of the capacity challenge,
we have five initiatives underway:
1. Bringing the 100MW Ruakākā
battery online will help with peak
challenges in the North Island.
It is due to be commissioned by
the third quarter of 2024.
2. We’re piloting virtual power plant
capacity that can be turned on
quickly and for short periods
of time to meet demand and
bring down the overall load.
This includes potentially using
household EV chargers to
manage peaks.
3. We’re working to get more out of
our existing generation assets –
for example at Manapōuri, where
we’ve applied to generate another
39MW to support demand. 18MW
of this potential has so far been
approved through Transpowers
dispensation process.
4. Our retail team has been working
with our bigger customers to
encourage demand-response
arrangements like the one we
recently negotiated with Open
Country Dairy.
5. We’ve supported various industry-
wide solutions to manage peak
risk through the Chief Executives
Forum and with the Electricity
Authority directly.
Dividend for the year
Retail pricing increases
Our ordinary dividend policy has
set distributions at 80%–100%
of free cash flow, subject to
approval by the Board. The sale
of the Australian business and
ongoing growth in operating
earnings throughout the Group
are reflected in another rise in
dividend. The final dividend for
the year will be 11.90 cents per
share, 3% higher than for the
same period last year. This latest
dividend brings the total payout
to investors this year by way of
dividend to 17.90 cents per share.
The Dividend Reinvestment Plan
remains in place.
In terms of improving the energy
we can access for our customers,
there have been two important
changes this year:
1. We've changed the nature
of our swaptions to be
more consistent with our
decarbonisation philosophy.
Arrangements with Nova and
Contact commenced in 2023
following the expiration of the
Genesis swaption at the end
of 2022.
2. We now have a contract in
place with NZAS for a 50MW
demand-response product that
we can call on if needed. This
arrangement is a robust solution
for events with long notice
periods, such as a dry season,
and brings balance to the wider
system. We’re proud of the work
that teams from both parties did
to make this happen.
Inflationary pressures this year
meant that changes to our retail
pricing were inevitable. As always,
we did our best to keep increases to
a minimum, but there were two price
movements for our retail brands.
In total: Meridian’s residential
customers saw a 3% increase in
their bills; Meridian SME and agri-
business customers saw a 3.3%
increase; and Powershop customers
received a 2% increase. This year also
saw a further phase-out of the low-
fixed-charge/high-variable-charge
tariff option, which once entirely
gone will remove a long-standing
distortion in retail pricing.
We continued to encourage
residential customers to buy
our LevelPay product in order to
keep household prices consistent
throughout the year and avoid high
bills in winter. As a member of the
Electricity Retailers’ Association of
New Zealand, we were also able to
offer households access to credits
as part of the phase-out of the
low-fixed-charge tariff option. At
the same time we continued to
offer business customers access to
long-term contracts that effectively
hedged their exposure.
1 2 2
A campaign image from Meridian's latest television commercial – 'Nature'. ►
1 2 3
BETTER, COMMERCIALLYMERIDIAN INTEGRATED REPORT 2023 Focus on customers
Customer connections* (ICPs)
Customer sales volume (GWh)*
0
3
8
6
4
3
,
6
4
3
5
6
3
,
,
5
3
3
3
6
3
10,000
117,055
9,000
5
0
4
8
,
1
4
9
8
,
34,795
211,485
6
7
3
7
,
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
5
7
1
,
9
1,339
4,529
p
o
h
s
r
e
w
o
P
e
t
a
r
o
p
r
o
C
–
n
a
d
i
r
e
M
i
E
M
S
,
i
r
g
A
,
s
e
R
–
n
a
d
i
r
e
M
i
3,308
400,000
350,000
,
3
5
2
4
2
3
3
00,000
250,000
2
00,000
150,000
100,000
50,000
0
FY20
FY21
FY22
FY23
*
Excludes the Tīwai Point aluminium smelter; <10 of the above ICPs are connected
to the transmission network; around 4,700 customer connections have distributed
generation metering.
0
FY20
FY21
FY22
FY23
*
Electricity energy volumes only, and excludes the Tīwai Point aluminium smelter.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
1 2 4
Switching rates*
FY19
FY20
FY21
FY22
FY23
Powershop New Zealand
30.35% 24.97% 25.81% 25.07% 24.74%
Meridian
16.94%
14.18% 14.45%
11.98% 12.79%
New Zealand combined
20.08% 16.98%
17.76% 16.10% 16.64%
New Zealand industry
20.64%
18.91% 20.77% 18.35% 18.75%
* Data from the Electricity Authority (emi.ea.govt.nz) and Meridian analysis.
Customer satisfaction*
Net Promoter Score**
FY19
FY20
FY21
FY22
FY23
Powershop New Zealand
Meridian
New Zealand industry average***
61
28
18
64
30
22
66
28
21
62
32
19
60
33
N/A
Powershop New Zealand and Meridian New Zealand residential customers only.
*
** Calculated from a survey asking customers using a 0–10 scale “How likely is it that you would
recommend Meridian/Powershop to a friend or colleague?” then subtracting the
percentage of detractors from the percentage of promoters. A positive value indicates that
more customers are promoters versus detractors (and vice versa). Results are a 12-month
moving averages from July to June each financial year.
*** Perceptive Group Limited: New Zealand NPS Industry Benchmarks. FY22 updated since last
report. FY23 data currently unavailable.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
Working with customers to find energy solutions. ►
1 2 5
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
Fulfilling different needs
through our retail brands
In the past four years our
residential brands have grown
by 70% in value and 43% in
volume (kWh). This year that trend
continued, with total value (based
on netback) increasing by 17%.
We remain the country’s biggest
supplier of retail energy, with
sales in excess of 9,100GWh.
In total we’ve added 75,930
new connections through our
successful multi-brand strategy,
with connections for Powershop
rising by 32,060 and connections
for our Meridian brand rising
by 43,870.
Our two brands have distinct
audiences. The Meridian
brand appeals to business and
environmentally conscious
consumers, with growth coming
mainly from the SME and
large-business sectors. A key
characteristic of the brand is
high customer commitment,
with Meridian having a very
low churn rate of just 13%.
Powershop continues to
experience strong mass-market
growth, thanks to a service
proposition in which pricing
and brand positioning centre on
residential and small business
customers who want to engage on
a digital platform. The brand has
built a reputation as an innovator,
with a shop model that encourages
customers to seek out the best
deals that suit them.
Again this year, growth came
without compromising on
profitability, with both brands
exceeding their targets. The
market itself was the most
competitive it’s been in some time,
with Powershop slipping from the
#1 retail brand to #2 and Meridian
going from being the #2 gentailer
to #4 according to its Customer
Satisfaction Score.
1 26
◄ A campaign image from Powershop television commercial.
“
Again this year,
growth came without
compromising on
profitability, with both
brands exceeding
their targets.”
Maintaining our
credit rating
In April 2023 international
ratings agency Standard & Poor’s
reaffirmed our BBB+/Stable/A-2
credit rating. The rating for the
Group includes a one-notch uplift
from the company’s stand-alone
rating of ‘BBB’, reflecting the
majority ownership by the New
Zealand Government.
The rating aligns with our Board’s
view of what our credit rating
should be and confirms that we
have headroom for ongoing
investment.
that report. In addition, the Kantar
Corporate Reputation Index 2023
placed Meridian in the top 10 for
responsibility leaders.
In the Customer Leadership section
of the index, Meridian was singled
out as making the largest jump in
the rankings, from 52nd in 2021 to
13th in 2022, and for developing
a clear brand promise, backed
up with strengthening customer
service. That survey also positioned
us as #1 for supporting worthwhile
causes such as the community or
the environment.
Our Meridian brand campaign
continues to be one of the most
popular TV campaigns in the country.
We increased the amount of solar
deployed commercially under our
Solar Power Purchase Agreement
offer, from 720kWp (kilowatts of
installed capacity) to 1,852kWp,
with seven new rooftop systems
built. These included five new
systems at Sylvia Park with Kiwi
Property – making the combined
solar generation at the mall one of
the largest in the country – and a
rooftop and solar façade system
on the new Waimarie science
facility at Lincoln University. We
also increased our solar buy-back
rates to one of the leading market
offerings of 17c/kWh (cents per
kilowatt hour) for homes and
12c/kWh for businesses.
In terms of external endorsement,
Meridian was recognised, again, as
a sustainable New Zealand brand in
the Better Futures 2023 report. We
remain one of New Zealand’s top 10
sustainability leaders according to
1 2 7
BETTER, COMMERCIALLYMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
Our impacts anchored in commercial activities
A summary of our business-related impacts is provided below, including the actions we are taking to manage, avoid or mitigate the impacts.
Impact
Description
Actions to manage, avoid or mitigate this impact
Erosion of public
and customer
trust (market
behaviour
and pricing)
Meridian is directly linked to public
and customer trust levels related to
a fair and competitive process for
electricity pricing.
Risks created
by a changing
climate
Meridian is directly linked to physical risks
for the economy, the environment and
people as a result of climate change impacts
on its generation infrastructure.
Meridian has a number of key policies designed to ensure ethical conduct and uphold public trust.
These include:
• audits that incorporate Professional and Ethical Standards
• a Group Code of Conduct updated to reflect our policy on ethical practices
• an Electricity Hedging Policy and pricing plans with clearly assigned responsibilities to ensure
we shield Meridian and our customers from electricity price volatility
compliance with Electricity Authority requirements
full compliance with the Energy Authority’s consumer care guidelines
•
•
We also make an effort to respond to enquiries from media and political and regulatory
stakeholders, and have supported ERANZ’s Powering Change campaign to raise public awareness
of the positive work that energy companies are doing.
To mitigate this impact, Meridian has voluntarily disclosed the financial impacts of climate-related
issues since 2019.
In FY23 we established a change manager role, working alongside our Sustainability team, to
accelerate Meridian’s maturity and seek an early alignment with the Aotearoa New Zealand Climate
Standards.
For more details, refer to our FY23 Climate-related Disclosure.
1 2 8
Meridian EVs charging outside the offices in Twizel. ►
1 2 9
BETTER, COMMERCIALLYMERIDIAN INTEGRATED REPORT 2023 – v
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Y
L
L
A
I
C
R
E
M
M
O
C
,
R
E
T
T
E
B
1 3 0
– v
MERIDIAN DOING IT RIGHT. NOW.
MERIDIAN DOING IT RIGHT. NOW.
Enthusiastic response
to our bond issue
This year, to support the finance/refinance
of eligible wind projects, we issued a new
$200 million Green Bond, which received an
enthusiastic response from investors.
Further information on the Green Finance
Programme, including the programme
framework document, opinions from DNV GL
Business Assurance Australia Pty. Ltd, Climate
Bonds Standard and Certification and Green
Asset and Debt registers, is available on
Meridian’s website at meridianenergy.co.nz/
about-us/investors/reports/green-finance.
Page 222 provides detailed information on
the Green Debt included in the programme
for FY23.
In August 2020, Meridian implemented a Green
Finance Programme that covered both existing
and future issuances of debt instruments. The
programme recognises Meridian’s commitment
to the leadership of and investment in renewable
energy generation and will be used to finance or
refinance sustainable projects and assets such as
new and existing renewable energy assets.
The programme enables Meridian to connect
its company strategy and vision to its financing
requirements, and provides investors with
opportunities to invest in a range of accredited
debt instruments. The proceeds of these
have been allocated (directly or notionally) to
refinance eligible wind and hydro projects and
assets that meet the following market standards:
•
•
•
The International Capital Market
Association Green Bond Principles.
The Climate Bonds Standard.
The Asia Pacific Loan Market Association
Green Loan Principles.
◄ View north at West Wind, Te Whangnanui-a-Tara Wellington.
1 31
BETTER, COMMERCIALLYMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
I
N
O
T
A
R
E
N
U
M
E
R
T
H
G
R
E
H
T
I
The right
remuneration
1 3 2
Benmore Hydro Power Station, Otematata.
Matching our
remuneration to
the challenging
economic conditions,
and refocusing our
employee benefits
to attract and
retain good people.
◄ Staff at Te Whangnanui-a-Tara Wellington office.
1 3 3
THE RIGHT REMUNERATIONMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
I
N
O
T
A
R
E
N
U
M
E
R
T
H
G
R
E
H
T
I
1 3 4
Encouraging
everyone to
deliver value
Attracting, retaining and motivating talented people,
and rewarding them for delivering desired business
performance and long-term shareholder value, is key
to Meridian’s success.
Our remuneration philosophy is guided by the principles that
remuneration will:
• be clearly aligned with our company values,
culture and strategy
•
support us to attract, retain and engage employees
• be fair, equitable and flexible
• appropriately reflect market conditions and the
-organisational context
•
recognise and reward high performance
• align with creating shareholder value.
The People, Remuneration and Culture
Committee regularly reviews Meridian’s
Remuneration Policy and practice and
provides recommendations to the Board.
The Board approves the Remuneration Policy
two-yearly, and the Executive balanced
scorecard objectives, company financial
performance targets and outcomes on
an annual basis.
Fixed remuneration
Fixed remuneration includes base salary and
matched KiwiSaver contributions of up to 4%.
It is benchmarked to independent market
remuneration data obtained from multiple
external sources. As a minimum, Meridian pays
the Living Wage for all permanent and fixed-
term employees.
and reviewed by managers in accordance with
the Remuneration Policy and framework, and is
subject to one-up approval.
Salaries are reviewed annually, with the
budget and parameters for the company’s
annual remuneration review approved by the
Board. Market information from independent
remuneration providers informs these
remuneration decisions.
Variable pay
Both the Short-term Incentive (STI) scheme
and Long-term Incentive (LTI) plan are variable,
performance-based incentives awarded only if
specific financial and non-financial performance
hurdles are met, and at the discretion of the Board.
STI
The People, Remuneration and Culture
Committee of the Board reviews and
approves proposed remuneration packages
for the Executive Team. Remuneration for the
remainder of the organisation is determined
Permanent employees may participate in
variable pay via the STI scheme at the discretion
and invitation of the Board. The STI is an at-
risk incentive that may be offered for a specific
year, by invitation from the Board. Potential
STI payments reflect the achievement of
certain company profit levels and individual
performance objectives aligned to business
strategy and goals, and are wholly discretionary.
The STI is paid subject to a behaviour gate
(employee behaviour complies with the Meridian
Group Code of Conduct) and company financial
performance hurdles, and at the discretion of
the Board.
The STI opportunity within total remuneration
reflects the complexity and levels of the roles.
In FY23 the CEO had an STI opportunity of 50%
of salary, and the Executive Team STI opportunity
was 30%.
LTI
The CEO, Executive Team and selected Tier 3
leaders also have the opportunity to participate
in the LTI. The LTI is offered at the discretion
of the Board, to align senior management and
shareholders’ interests and optimise long-term
shareholder returns.
◄ Team briefing at Benmore Power Station, Otematata.
1 3 5
THE RIGHT REMUNERATIONMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
I
N
O
T
A
R
E
N
U
M
E
R
T
H
G
R
E
H
T
I
The number of Share Rights that
vest is dependent on the following
Vesting Conditions:
• Meridian’s total shareholder return
over a three-year performance
period (Performance Period)
relative to Meridian’s cost of
equity and the total shareholder
return over the Performance
Period of a defined group
of NZX Main Board and
ASX listed peer companies
(Performance Hurdles).
•
If the participant continues
to be employed by Meridian
during the vesting period
(Employment Condition).
LTI continued
The LTI opportunity is 40% of salary
for the CEO, 30% of salary for the
Executive Team, and 15% of salary
for eligible Tier 3 leaders. Vesting
of the LTI is contingent on the
company meeting absolute and
relative Total Shareholder Return
(TSR) performance hurdles at the
conclusion of a three-year period.
Under Meridian’s LTI, the company
issues rights to acquire ordinary
shares in the company (Share
Rights) to eligible participants who
accept an offer to participate in the
LTI. Each Share Right entitles the
holder to one ordinary share in the
company and an additional number
of shares equal to the value of the
gross cash dividends per share that
would have been paid to a New
Zealand tax resident who held a
share for the duration of the vesting
period, and is calculated using a 10-
day volume-weighted average price.
Performance hurdles
Share Rights are granted in
two tranches:
• Absolute Return Share Rights.
• Relative Return Share Rights.
For Absolute Return Share Rights
to vest, the company’s TSR must
be greater than the absolute
TSR benchmark that is set at the
beginning of the vesting period
with regard to the company’s
cost of equity (Absolute TSR
Benchmark) on a compounding
annual basis over the Performance
Period. If the company’s TSR is
equal to or lower than the Absolute
TSR Benchmark, no Absolute Share
Rights will vest. If the company’s
TSR is greater than the Absolute
TSR Benchmark, 100% of the
Absolute Return Share Rights
will vest.
The number of Relative Return
Share Rights that vest is
determined by the company’s
TSR over the Performance Period
relative to the peer group. For any
of the Relative Return Share Rights
to vest, the company’s TSR must be
greater than or equal to the 50th
percentile/median TSR of the peer
group. 100% of the Share Rights
will vest on meeting the 75th
percentile TSR of the peer group,
with vesting on a straight-line basis
between these two points.
For each three-year plan, an
independent external expert
measures the TSRs of Meridian
and the peer group of companies
along with the outcome on the
progressive vesting scale. Share
Rights will lapse if the Vesting
Conditions are not satisfied
(although this is subject to the
Board’s discretion in relation to
the Employment Condition).
For the LTI Performance Period
to the end of 2023, the level of
vesting was 0% (2022: 48.8%).
Therefore no shares will be
transferred to the eligible
participants for that LTI (2022:
251,565).
1 3 6
Merdian staff on site at Forever Forest planting day in Ōtautahi Christchurch. ►
1 37
THE RIGHT REMUNERATIONMERIDIAN INTEGRATED REPORT 2023 “
Starting in FY24, we
will fund a baseline of
healthcare insurance
for all permanent
employees...”
Employee Value Proposition
Employee benefits
During FY23, work was undertaken
to define and document Meridian’s
Employee Value Proposition (EVP)
– the ‘secret sauce’ that makes
Meridian attractive to current and
potential employees. Meridian’s
employee experience is influenced
by four interlinking elements –
Culture, Career, Pay and Benefits,
outlined opposite.
As just one element of our EVP,
Meridian offers a wide range of
other benefits and provisions to
employees, including an employee
share scheme, employee insurance,
enhanced parental leave provisions,
three days' company leave, the
ability to purchase additional leave,
access to purchasing discounts,
and part-time and hybrid working
arrangements.
In the FY23 year, following
input from employees on what
employment aspects matter to
them, Meridian further enhanced
these benefits. We renamed
our existing generous sick leave
provisions as wellbeing leave, and
extended it to include leave for
other wellbeing-related purposes.
Starting in FY24, we will fund a
baseline of healthcare insurance
for all permanent employees,
extended our parental leave top-
up to 26 weeks and increased our
company KiwiSaver contributions to
4% for all our lower remuneration
band employees who contribute 3%
or more to their KiwiSaver accounts.
This will help them to save for their
first homes and retirement. We’ve
also reiterated the availability of
volunteer leave for our employees
to participate in Meridian’s
volunteering or other worthy
community volunteering initiatives,
and introduced a new initiative to
recognise employees who attain
notable service milestones.
Our benefits help us to attract and
retain our ‘good humans’ – and
this ‘icing on the cake’ is a way of
showing just how much we value
our people.
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
I
N
O
T
A
R
E
N
U
M
E
R
T
H
G
R
E
H
T
I
1 3 8
CEO remuneration
CEO remuneration for Performance Periods ending 30 June 2023 and 30 June 2022
Year
Base salary
Taxable
benefits16
Fixed
remuneration17
MyShare18
Pay for performance
Total
remuneration
STI19
LTI20
Subtotal
FY23
FY22
$1,136,250
$45,450
$1,181,700
$2,500
$690,467
$0
$690,467
$1,874,667
$1,092,548
$43,702
$1,136,250
$2,500
$637,209
$358,413
$995,622
$2,134,372
The CEO is entitled to receive a matching employer KiwiSaver contribution of 4% of gross taxable earnings.
The company’s KiwiSaver contributions for the CEO, paid within the FY23 period, were $71,507.
The ratio of CEO salary to median Meridian Group employee salary21 in FY23 is 11.2:1 (using $101,631 median
employee salary and FY23 CEO salary). The salary ratio in FY22 was 12:1.
Other employment
arrangements
Meridian has written agreements
with the CEO and executives setting
out the terms of their employment.
Neal Barclay will be employed
as CEO until his employment is
terminated in accordance with his
employment agreement. Pursuant
to the employment agreement,
Termination payments
the CEO and Meridian have
mutual rights of termination
on the provision of six months’
written notice. Meridian may also
terminate the CEO’s employment
on the grounds of redundancy
or serious misconduct or where
an act of bankruptcy is committed.
Redundancy compensation is
payable to permanent employees
whose employment is terminated
as a result of redundancy.
No ‘clawbacks’ are required except
if salary overpayment occurs.
No retirement benefits are payable.
No sign-on bonuses or recruitment
incentive payments are offered.
The ratio of CEO total
remuneration to median
Meridian Group employee total
remuneration paid in FY23 is 16:1
(using $116,266 as the median
employee total remuneration
and the FY23 CEO total). The
total remuneration ratio in 2022
was 20.5:1.
The CEO's salary increased by 4%
in FY23. The median employee
salary increased by 11.7% between
FY22 and FY23, resulting in a ratio
of 0.34:1 (CEO to median employee
salary increase).
The CEO's total remuneration
decreased by 12.17% in FY23, due
to the FY21 LTI not vesting. Median
employee total remuneration
increased by 11.7% from FY22 to
FY23. This resulted in a ratio of
-1.04:1 (CEO to median employee
total remuneration increase).
16 Taxable benefits are 4% company KiwiSaver contributions on salary.
17 Fixed remuneration is salary plus company KiwiSaver contributions.
18 MyShare is the gross value of award shares received in the applicable period.
19 STI is the potential payment based on performance achieved for the applicable period and includes 4% company KiwiSaver contributions.
20 The vesting period for the FY21 LTI ends on 31 October 2023. Share rights lapse if the holder ceases to be employed by Meridian during the vesting period subject
to the Board’s discretion.
21 Median employee salary and total remuneration excludes Flux-UK and casual employees.
1 3 9
THE RIGHT REMUNERATIONMERIDIAN INTEGRATED REPORT 2023
Five-year remuneration summary
b
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
I
N
O
T
A
R
E
N
U
M
E
R
T
H
G
R
E
H
T
I
FY21–FY23
FY20–FY22
FY19–FY21
FY18–FY20
FY17–FY19
% achieved
148.1%
70%
Year
FY23
FY22
FY21
FY20
FY19
Single-figure
remuneration
% STI
against maximum
% vested LTIs
against maximum
Span of LTI
Performance Period
$1,874,667
$2,134,372
$2,308,446
$2,039,841
$1,695,195
82.3%
78.99%
66.75%
78.69%
90.91%
0%
48.8%
100%
100%
100%
Breakdown of CEO pay for performance (FY23)
Description
STI
Performance measures
50% of base salary.
Combination of company
result and a scorecard of
financial and non-financial
company measures.
60% weighting on company performance (company profit, which
comprises Group EBITDAF minus capital charge).
40% weighting on performance against a Board-approved
scorecard comprising financial and non-financial objectives,
as shown in the table below, and other aspects of individual
performance.
LTI
Conditional award of
share rights under LTI.
40% of base salary.
50%: Absolute TSR over the relevant assessment period:
Hurdle not met
• Must be greater than the company's cost of equity
benchmark on a compounding basis.
50%: Relative TSR against the peer group22:
• Below the 50th percentile, 0% vests
• 50th percentile TSR of peer group, at least 50% vests
• ≥ 75th percentile TSR, 100% vests
• Between the 50th and 75th percentile TSRs of peer group,
50–100% vests, calculated on a straight-line pro rata basis.
0%
The sum of both
LTI measures
gave an outcome
of 0%
14 0
22 Peer group comprises AGL Energy, Origin Energy, Contact Energy, Mercury NZ, Manawa Energy (previously Trustpower) and Genesis Energy. The vesting period for the
FY21 LTI scheme ends on 31 October 2023. Share rights lapse if the holder ceases to be employed by Meridian during the vesting period subject to the Board’s discretion.
b
Pay for performance scorecard measures for FY23
For FY23, the Board-approved scorecard, comprising up to 40% of the STI for the CEO and 30% for the Executive Team, was measured
as follows. This mix of measures demonstrates that a large proportion of the remuneration of the CEO and Executive Team is directly
impacted by their management of the organisation, and Meridian's impacts on the economy, environment and people.
FY23 scorecard
Performance
area
NZAS closure
mitigation
Description
Find new sources of demand to
mitigate the impacts of potential
NZAS closure
Targets
(achievement = 75%)
• Secure agreed level of new consumption
• Achieve other South Island energy consumption
initiatives
Range threshold
to maximum
(50–100%)
Results
achieved
Partially
achieved
Board-approved
outcome relative
to target
Threshold
to target
Weighting
20%
Decarbonisation-
led growth
Develop a high-quality, diverse
suite of renewable energy options
• Land Harapaki wind farm to plan
• Ruakākā consenting completed, milestones
Partially
achieved
Threshold
to target
Customer
Customer satisfaction and growth • Retail EBITDAF
for six other developments on track
• North Island battery plans on track
• Market retention rate
• EV chargers contracted, installed
• # active EV customers
• Demand flexibility
• Powershop New Zealand digital customer experience
Optimise business
performance
Execute options and optimise
portfolio needs while reducing risk
• Process changes for 100% renewable energy
• Business operational improvements
Sustainability
Grow a clear sustainability
leadership position through
purposeful action
Investment stability Regulatory, legal and government
relations accelerate and improve
New Zealand’s decarbonisation
transition
• DJSI ranking improvement
• FY23 milestones for ‘Half by 2030’ emissions target
• Help drive decarbonisation of economy at speed
• Land another key initiative that clearly underpins the
‘fair’ element of our purpose, clean energy for a fairer
and healthier world
• Contribute to New Zealand’s 100% renewable electricity
target, working with the Electricity Authority to ensure
market settings are appropriate to support the transition
to this future state
• Waitaki consenting on track
Partial
achievement
through to full
delivery
of targets,
exceeding
expectations
Achieved
Achieved
target
Partially
achieved
Achieved
Achieved
Threshold
to target
Achieved
target
Achieved
target
20%
20%
20%
10%
10%
The sum of the above may also be varied based on workplace safety culture, overall workplace engagement and individual performance.
Exceeded target
Achieved target
Threshold to target
Below threshold
141
Overall approved Executive Scorecard STI outcome:
70%
THE RIGHT REMUNERATIONMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
Measuring performance
Five-year summary – three-year rolling TSR performance
(Meridian Energy vs peer group*)
120%
%
8
0
1
I
N
O
T
A
R
E
N
U
M
E
R
T
H
G
R
E
H
T
I
100%
80%
60%
40%
20%
0%
%
6
8
%
5
8
55%
58%
44%
%
1
2
24%
%
7
-1%
June 2019
June 2020
June 2021
3 years ended
June 2022
June 2023
* Peer group comprises AGL Energy, Origin Energy, Contact Energy, Mercury NZ,
Manawa Energy (previously Trustpower) and Genesis Energy. The vesting period for
the FY20 LTI ends on 7 October 2022. Share rights lapse if the holder ceases to be
employed by Meridian during the vesting period, subject to the Board’s discretion.
i
n
a
d
i
r
e
M
i
n
a
d
e
m
p
u
o
r
g
r
e
e
P
CEO performance pay scenarios for FY23
3,000
2,500
2,000
1,500
1,000
500
0
$(000)
I
T
L
l
e
b
a
i
r
a
v
l
a
u
n
n
A
n
o
i
t
a
r
e
n
u
m
e
r
d
e
x
i
F
27%
30%
43%
18%
25%
57%
100%
Fixed remuneration
Meets expectations
Maximum
The TSR summary above illustrates the performance of Meridian’s
shares against a peer group of companies between 30 June 2019
and 30 June 2023. TSR performance outcomes are independently
validated by external experts.
The chart above depicts elements of the CEO’s remuneration
design under various scenarios for the year ended 30 June 2023,
as a proportion of total remuneration.
14 2
v
Employee share ownership
Employee remuneration range
Employees are invited to join Meridian’s employee share ownership
plan, MyShare. Under MyShare, Meridian shares are purchased for
participating employees, and funded by monthly pay deductions of
between $500 and $5,000 per annum. After three years, participants
may be eligible for award shares subject to ongoing employment
(Tenure Award Shares) and the company TSR outperforming a peer
group of competitors (Performance Award Shares). In FY23, 55% of
employees participated in MyShare.
Meridian has a policy to ensure that the participants in the Executive
LTI Plan are not permitted to enter into transactions (whether through
the use of derivatives or otherwise) that limit the economic risk of
participating in the plan.
CEO and Executive Team – Meridian Share ownership
Number of shares owned
(excludes performance
share rights)
Value of
shares as at
30 June 2023
Value of shares as
a % of FY23 fixed
remuneration
CEO
529,768
$2,966,701
Executive Team
804,169
$4,503,346
251%
96%
Meridian does not have a share ownership requirement for the CEO
and Executive Team.
The number of employees and former employees of Meridian and
its subsidiaries (not including directors) who during the year ended
30 June 2023 received cash remuneration and other benefits
(including at-risk performance incentives, KiwiSaver contributions and
redundancy compensation) exceeding $100,000 is outlined below:
Band
Total Group
Band
Total Group
100,000–109,999
110,000–119,999
120,000–129,999
130,000–139,999
140,000–149,999
150,000–159,999
160,000–169,999
170,000–179,999
180,000–189,999
190,000–199,999
200,000–209,999
210,000–219,999
220,000–229,999
230,000–239,999
240,000–249,999
250,000–259,999
260,000–269,999
270,000–279,999
280,000–289,999
66
48
64
42
64
41
36
27
26
17
19
19
13
6
7
5
1
3
3
290,000–299,999
300,000–309,999
310,000–319,999
320,000–329,999
330,000–339,999
340,000–349,999
350,000–359,999
400,000–409,999
420,000–429,999
470,000–479,999
480,000–489,999
650,000–659,999
700,000–709,999
800,000–809,999
810,000–819,999
990,000–999,999
2,200,000–2,209,999
1
5
4
3
2
1
3
2
3
1
2
1
2
2
1
1
1
Total
542*
* This includes 27 employees who are no
longer employed by Meridian Energy
Limited or its subsidiaries.
14 3
THE RIGHT REMUNERATIONMERIDIAN INTEGRATED REPORT 2023 3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
I
N
O
T
A
R
E
N
U
M
E
R
T
H
G
R
E
H
T
I
Prior to 2021, the last previous
change to directors’ fees was
in 2016.
In November 2022, Meridian
established an independent
board for one of its subsidiary
companies Flux Federation Limited.
The directors of Meridian resolved,
in accordance with Listing Rule
(LR) 2.11.3, to increase the overall
director fee pool by the amount
necessary to pay the new Flux
directors no more than the average
paid to the current directors of
Meridian. As at the time of writing,
consistent with LR 2.11.3 and
the resolution, the director fee
pool has been increased by the
amount necessary to pay Kenneth
Tunnicliffe and Jodi Mitchell as
set out below. Mike Roan is the
other director of Flux Federation
(appointed by Meridian) and
does not receive additional
remuneration for that role.
Approved director
remuneration for FY23
We are an NZX-listed company,
directors' fees (Board remuneration)
must be approved by a majority
of shareholders voting at a share-
holders’ meeting. Meridian
amended its Remuneration Policy
to include how the remuneration
of directors is set. A copy of the
Remuneration Policy can be found
on our website and share-holders
are kept informed of any changes
in the way the company allocates
the pool of approved director fees.
Refer to the Corporate Governance
Statement.
Director remuneration is paid from
the total director fee pool that was
last approved by shareholders at
the Annual Meeting on 6 October
2021. Prior to the meeting and vote,
Meridian had consulted a number
of shareholder representatives
to gain their input, and engaged
independent consultancy PwC to
prepare a benchmarking report
of Meridian’s director fees against
those of comparable companies.23
Annual director fee pool
Board fees
Committee fees
Flux Board fees
Total pool
FY22
FY23
1,090,000
1,090,000
109,000
109,000
–
134,000
1,199,000
1,333,000
Individual Meridian Board-approved annual fee breakdown
Position held
Chair
Deputy Chair
Director
FY22
FY23
$212,000
$212,000
–
–
$116,750
$116,750
Audit and Risk Committee Chair
$25,000
$25,000
Audit and Risk Committee member
$10,500
$10,500
Safety and Sustainability Committee Chair
$21,000
$21,000
Safety and Sustainability Committee member
$9,500
$9,500
People, Remuneration and Culture Committee Chair
$21,000
$21,000
People, Remuneration and Culture Committee member
$9,500
$9,500
14 4
23 www.nzx.com/announcements/378714
Flux Board annual fee breakdown
Position held
Flux Chair
Flux independent director
Director remuneration received in FY23
Name of director
Mark Verbiest24 (Chair)
Mark Cairns
Graham Cockroft25
Jan Dawson26
Michelle Henderson
Julia Hoare27
Nagaja Sanatkumar
Tania Simpson28
Total
FY22
FY23
–
–
$84,000
$50,000
Audit and
Risk Committee
Safety and Sustainability
Committee
People, Remuneration
and Culture Committee
Total remuneration
Board fees
$212,000
$116,750
$108,729
$34,945
$116,750
$121,750
$116,750
$116,750
–
–
$9,779
$3,143
$10,500
$25,000 (Chair)
–
$944,424
$48,422
–
$21,000 (Chair)
–
–
$9,500
–
$9,500
$9,500
$49,500
–
–
$8,847
$6,286
–
–
$9,500
$18,125 (Chair)
$212,000
$137,750
$127,355
$44,374
$136,750
$146,750
$135,750
$144,375
$42,758
$1,085,104
Directors are reimbursed for all reasonable and properly documented expenses incurred in performing their duties as Meridian directors.
No additional payments or benefits were received by directors in FY23.
Flux director remuneration received in FY23
Name of director
Kenneth Tunnicliffe (Chair)
Jodi Mitchell
Mike Roan (Meridian-appointed director)
Total
Total remuneration
$49,000
$29,167
–
$78,167
Meridian employees appointed as directors of Meridian subsidiaries do not receive any directorship fees.
24 Does not receive additional fees for committee membership.
25 Appointed to the Board effective 26 July 2022 and also appointed to the Audit and Risk Committee, and People, Remuneration and Culture Committee on the same date, so fees do not represent a full year.
26 Ceased to be a director on 18 October 2022, so fees do not represent a full year.
27 Additional fees paid for participation in the Green Bond Due Diligence Committee.
28 Appointed as Chair of the People, Remuneration and Culture Committee, effective 17 October 2022, so fees do not represent a full year.
14 5
THE RIGHT REMUNERATIONMERIDIAN INTEGRATED REPORT 2023 Preparing
this report
14 614 6
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 We undertake an
objective assessment
of all the impacts arising
from our business
activities that affect
the environment,
society and economy.
◄ Meridian technicians at West Wind, Te Whangnanui-a-Tara Wellington.
147
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 Clear
intentions
We have a duty to effectively manage a wide range of
resources, including our physical assets, our technology
platforms, our financial capital, our people and their
knowledge, our many relationships and the natural
resources we use to generate electricity and value.
We recognise that our business activities can have both positive and
negative impacts on the environment, society and economy, including
human rights.
In addition, we are committed to contributing to the Sustainable
Development Goals (SDGs) and, through this, the United Nations
Sustainable Development Agenda 2030.
Last year, Meridian adopted the updated 2021 Global Reporting
Initiative (GRI) Standards. These have moved away from evaluating
materiality based on the issues that immediately influence stakeholders,
and instead require an objective assessment of the positive and negative
impacts of a company's business activities that affect the environment,
society and the economy, including human rights.
In FY23 we refreshed our FY22 materiality assessment.
14 8
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023
We assess our impacts for their significance,
considering the size of the impacts, how
widespread they are and how likely they are
to happen. Our activities could have caused
these impacts, contributed to the impacts or
have links to the impacts.
Meridian reports on the highest-scoring impacts
above a threshold, including our progress in
managing these impacts over time.
As a result of the updated GRI approach, some
issues that are immediately important to some
stakeholders may be ranked lower than issues
that score highly for severity and likelihood.
The GRI standards recommend that companies
review their material topics for each reporting
period to take account of any changes in their
operations or approaches that may alter the
way they affect the environment, society, the
economy or people’s human rights.
To identify our FY23 material impacts, we have:
• carried out a comprehensive review of our
sustainability impacts assessment relating to
our activities with external support (including
an annual review of the new sustainability
context, business activities and business
relationships)
•
•
reviewed and assessed impacts relating to
Meridian’s previously reported material topics
reviewed and assessed the activities, impacts
and annual reports of peer group companies
• used a representative group of experts across
our business to identify the company’s most
material impacts
• engaged with a range of external
stakeholders to discuss and assess these
impacts. The stakeholders included
customers, customer insights researchers,
tangata whenua, community groups,
regional economic development agencies,
energy industry experts and researchers,
environmental regulators and equity analysts.
Ultimately, the Meridian Board has the
authority to approve material topics, and
this is done annually through the Safety
and Sustainability Committee and then
at a subsequent Board meeting.
Management engages with the Safety and
Sustainability Committee to identify and
manage impacts on the economy, environment
and people at an aggregate level, at least
annually. In addition, specific positive and
negative impacts receive focused attention by
the whole Board, or one of the subcommittees,
during the year.
This can include the directors engaging
directly with key relationship representatives to
understand the impacts we have on others and
ensure the steps we take as an organisation to
amplify the positive, or mitigate the negative,
have appropriate governance oversight. For
example, the Safety and Sustainability Committee
visited the Harapaki wind farm to meet our civil
contractors and cultural monitors from Hineuru
Iwi Trust and Maungaharuru Tangitū Trust. More
broadly, the committee reviews progress against
a range of sustainability initiatives quarterly,
including benchmarking against relevant targets
– such as our progress with supporting vulnerable
customers and the development of our emission-
reduction programme.
◄ Turbines at Mill Creek Wind Farm, Te Whangnanui-a-Tara Wellington.
149149
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023
Material topics and impacts
Having adopted the GRI process
for material impacts, our FY23
material topics feature below in
order of their degree of impact:
1. Renewable energy generation
2. Customer decarbonisation
3. Ngā whakaaweawe o
Te Ao Turoa – impacts
on the natural world
4. Ethics, governance and trust
5. Climate-related impacts
6. Access to affordable energy
7. Supply chain
8. Business emissions and waste
9. Sustainability thought
leadership
10. Supporting communities
11. People
12. Cyber security
There were no material changes
to the material topics this year
other than the introduction of
cyber security.
Each of our material topics has an
impact or an associated group of
impacts. We have prioritised these
impacts relative to each other based
on the use of a significance score,
the weightings of which have been
determined based on consultation
with relevant internal and external
stakeholders.
Actual negative impacts are
assessed by severity, which is the
sum of their scale (how grave an
impact is), scope (how widespread
the impact is) and irremediable
character (how hard it is to
counteract the harm of the impact).
Actual positive impacts are
determined by scale and scope only.
The significance of a potential
negative or positive impact is
determined by the severity of the
possible impact multiplied by the
likelihood of that impact occurring.
We applied a materiality threshold
to the resulting significance of
impacts, and those that exceeded
this threshold informed the
determination of a material topic.
Impacts below the materiality
threshold still have some content
disclosed in this annual report –
for example our commitment to
have a positive impact on policy
change which is enabling the rapid
transition to a low carbon energy
future. This impact slipped below
the threshold this year – influenced
by stakeholder feedback that,
despite our best efforts, we have
not had the positive impact we
intended (a downgrade in the
likelihood and overall significance
score resulted).
Throughout this report, we
reference the actions taken to
manage a topic and related impacts
in more detail, with a summary
provided at the conclusion of
sections: our natural impacts,
technology impacts, people
impacts and commercial impacts.
Many material impacts have
specific processes made in place
to track the effectiveness of
actions taken and progress against
relevant targets and indicators.
For example, at a project level the
Harapaki wind farm development,
which contributes to the material
impact of increasing the supply of
renewable energy and ‘disposal
of waste and other emissions’,
has project-specific governance
in place and a range of targets that
are measured and reported on to
track progress.
At a more aggregated level,
at the quarterly Safety and
Sustainability Committee
meetings, management provide
assurance on the progress made
on a range of initiatives relating
to material impacts – for example,
our Certified Renewable Energy
product and delivery against our
Half by 30 commitment.
The Board delegates responsibility
for managing impacts on people,
the planet and the economy via our
Delegation of Authority Policy,
which applies to the Board, staff
of Meridian and subsidiaries.
1 5 01 5 0
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 Delegation activities include financial
activities, risk management, people
and culture and legal. Delegation of
the responsibility for some impacts to
employees beyond senior executives
also occurs through accountability in
job descriptions and impact-specific
performance incentives.
We recognise that the new GRI
approach to impact identification
and assessment is one evaluation
methodology, and that other
philosophies and value systems
exist. In particular, adopting a te
ao Māori approach could result
in a different expression and
prioritisation of impacts.
We believe there is more we can
do through learning from other
possible frameworks. As we
continue our journey to build our
cultural understanding, we may
find real benefits in adopting a
different way of thinking about
materiality and the impacts we
have on people, the planet and
the economy.
Identified key relationships
The updated GRI standards
emphasise the importance of
consulting stakeholders who
are able to provide expert and
objective evaluations of impacts.
In addition, we look to engage
with stakeholders who can have
significant impacts on our business,
and those on whom we can have
significant potential impacts
through our activities. These
stakeholders include:
• customers
•
•
investors
the Crown
• Ngāi Tahu and other iwi
• New Zealand public
(and their elected officials)
•
•
regulators
the electricity sector
• asset communities
•
local government
• employees
•
suppliers
• youth
Our vision and strategy
to manage our impacts
Our purpose of clean energy
for a fairer and healthier world,
and our drive to contribute to the
UN SDGs, inherently embody a
commitment to achieving positive
impacts for people, the planet and
the economy, and preventing or
mitigating negatives.
Our business model is anchored
in creating short-, medium- and
long-term value by generating
electricity from renewable energy
sources (wind, water and sun) and
retailing electricity to customers to
support their decarbonisation.
Together, our purpose and business
model ensure we adopt a balanced
view of our impacts as we strive to
deliver value.
We’re committed to executing our
strategy in ways that continually
optimise our positive material
impacts, mitigate potential negative
impacts and remediate actual
negative impacts.
We recognise that achieving this will
require an ongoing focus, planning
and commitment. In FY24 we
plan to develop an approach
to impact measurement and
management for priority impacts,
including outcomes and targets
on which to focus our efforts.
We’ll formalise our existing internal
impact management group to
oversee the design of impact
outcomes and to ensure goals,
targets and indicators are used
to evaluate progress and the
effectiveness of actions. This will
include communicating lessons
learnt along the way.
Alongside this, we’ll integrate
the work we have been doing on
assessing potential and actual
human right impacts throughout
our value chain. This will include
formalising our approach to human
rights due diligence, tracking,
communicating and grievance
and remedy processes.
The table on the following pages
details our FY23 material topics and
impacts. We have not included the
small number of impacts that fell
below the materiality threshold.
1 51
1 51
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 Material impacts
Material impact definition
What we are doing about it
(including key policies and commitments)
Deep dive
section
Material topics and impacts
FY23
material topics
Renewable
energy
generation
100% Renewable
energy generation
Increasing
the supply of
renewable energy
Customer
decarbonisation
Reducing the
emissions of others29
Meridian generates 100%
renewable energy from its
generation assets, generating
approximately 30% of
New Zealand’s total electricity.
Meridian can directly increase the
amount of renewable energy
available in Aotearoa New Zealand
by having a clear development
pathway for investment in new
sources of renewable generation
that aligns with future demand
projections and includes securing
land, consents, financing and
appropriate connection
into the grid.
Meridian can contribute to
decarbonising commercial and
residential energy use by creating
products that support the
increased the use of electricity to
replace fossil fuels and through
better energy efficiency.
Maximising the
benefits of demand
flexibility and virtual
power plants to
support increased
electrification.
Meridian can contribute to the
creation of a more reliable,
decarbonised and cost effective
electricity system by maximising
the potential of demand flexibility
and virtual power plants.
• We remain committed to only generating electricity from 100% renewable sources –
Technology
wind, water and sun
• 7x7: our commitment to have seven grid-scale projects underway in the seven years to
2030 and 20 new renewable projects underway by 2050
• Harapaki wind farm (New Zealand’s second largest), currently under construction
• Ruakākā Solar and Battery project. Currently under construction, the latter will be
New Zealand’s first grid-scale battery
• Mt Munro wind farm (currently in the consenting process)
• Commitment to establishing and maintaining good relationships with iwi and hapu in
•
relations to assets and development projects
Internal Sustainable Infrastructure Framework established to identify a project’s most
material impacts and ensure effective mitigation strategies are in place
• Advancing a new partnership opportunity to develop a green hydrogen centre to support
decarbonisation in Aotearoa and abroad
• Advancing a new partnership opportunity to develop a green hydrogen centre to support
Technology
decarbonisation in Aotearoa and abroad
• Meridian has expanded the resource and remit of our Energy Innovation team, whose work is
focused on transport, distributed generation and storage, demand flexibility, process heat and
Certified Renewable Energy
• Deployed 1,852kWp of commercial solar in partnership with our business customers
• Committed to making it easier for NZers to drive electric by supporting the shift to EVs through an
EV pricing offer, our home charging product and our commitment to install EV chargers across the
country via our Zero Charging Network
• Launched our Zero App (EV charging network map and payment)
• Provided our Certified Renewable Energy offer to 130 customers against a total of 640 GWh
• Launched our community and business decarbonisation funds – reinvesting the net revenue of our
Certified Renewable Product into external decarbonisation projects
• Committed to creating a more flexible energy system that enables smarter use of electricity
and widespread electrification in our Climate Action Plan
• Demand-flexibility agreement (50MW) secured with New Zealand's Aluminium Smelter (NZAS)
• Entered into other demand flexibility memorandum of understanding for 40MW of demand
response that will support the removal of fossil fuels from industrial processes
• Launched a smart charging trial that connects 50 customer EVs to our virtual power plant,
testing the technical capability and customer value of intelligently controlled and scheduled
smart charging
1 5 21 5 2
29
In FY23 the FY22 impact ‘Certified Renewable Energy’ impact was removed. This is now covered within ‘Reducing the emissions of others’.
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 FY23
material topics
Ngā
whakaaweawe
o Te Ao Turoa the
impacts on the
natural world
Deep dive
section
Natural
Material impacts
Material impact definition
What we are doing about it
(including key policies and commitments)
Diversion and
reduced river
flows and water
quality issues
Harm to
biodiversity
in water
Adverse effects of
generation assets
and activities on
cultural values
Improving
biodiversity
on land
Meridian’s structures and water
management can directly affect
the health of river systems which
are obstructed and have reduced
river flows due to hydro dams and
generation activities.
Meridian has a direct effect on
the health on aquatic biodiversity
(particularly native fish species)
affected by hydro dams and
restricted river flows.
Meridian can directly affect the
cultural values of iwi relating to
land, waterways and biodiversity
because they are affected by the
operational presence and use of
Meridian’s generation assets.
This can create a negative impact
on iwi and their relationship with
the land, water and other taonga.
Meridian can contribute to
enhancing natural ecosystems on
Meridian owned/managed land
as well as non-Meridian owned
land by supporting planting
and biodiversity protection
programmes.
• A commitment to minimising our impact on biodiversity by applying avoidance,
remediation, mitigation, restoration and compensation approaches, in line with all
environmental legislation and resource consent conditions
• Project River Recovery
• Collaboration with Guardians of the Lake (Manapouri)
• Biodiversity and Deforestation Commitment – our commitment to minimise our impact on
biodiversity by applying avoidance, remediation, mitigation, restoration and compensation
approaches, in line with all environmental legislation and resource consent conditions
• Elver trap and transfer programme
• Confirmed intention to commence pilot of TNFD and investigate Science Based Targets for
Nature in FY24
• Completed intial biodiversity ‘next horizon’ discovery work
• Engagement with Rūnaka in Waitaki and Manapouri catchments, including signing a
35-year agreement with Waitaki Rūnaka to address the cultural and envionmental impacts
of the Waitaki Power Scheme
• Elver trap and transfer programme
• Partnership commitment to the Te Waiau Mahika Kai Trust
• Biodiversity and Deforestation Commitment – our commitment to minimise our impact on
biodiversity by applying avoidance, remediation, mitigation,restoration and compensation
approaches, in line with all environmental legislation and resource consent conditions, and to
meet our new no net-deforestation commitment (launched FY23)
• Confirmed intention to commence pilot of the Taskforce on Nature-related Financial
Disclosures and investigate Science Based Targets for Nature in FY24
• Continuation of Forever Forests – our afforestation emission removal project
• Te Waiau Mahika Kai Trust joint venture for carbon forest
• Renewed commitment to Kākāpo recovery programme
• Completed intial biodiversity ‘next horizon’ discovery work
Ethics,
governance
and trust
Erosion of public
and customer trust
(market behaviour
and pricing)
Meridian is directly linked to public
and customer trust levels related to
a fair and competitive process for
electricity pricing.
• Audits that incorporate the Professional and Ethical Standards
• Meridian ethical practices review completed – update to FY23 Group Code of Conduct
• Electricity Authority code trading rules amended (positive code amendment)
• Electricity hedging policy and pricing plans to shield Meridian and customers from price volatility
• Compliance with Electricity Authority requirements – advertising Powerswitch as a pricing
Commercial
comparison tool
• Retail energy hardship commitments
1 5 31 5 3
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 FY23
material topics
Climate-related
impacts
Material impacts
Material impact definition
Risks created
by a changing
climate (e.g. to our
generation assets)
Meridian is directly linked to
physical risks for the economy,
the environment and people as
a result of climate change impacts
on its generation infrastructure.
Access to
affordable
energy
Some
New Zealanders
experiencing
Energy Hardship
Addressing
inequality of access
to new energy
technologies30
Supply chain
Impacts of supply
chain/ethical
sourcing
As a retailer of electricity,
Meridian is directly linked to the
affordability and accessibility of
electricity which affects residential
and business customers.
Meridian can contribute to a just
transition and greater energy
equity by supporting people's
access to, and education on,
the opportunities and risks of
distributed generation (rooftop
and small scale solar), storage
(batteries) and electric vehicles.
Especially where these options
can reduce costs for electricity
users over the longer-term.
Via its business relationships
Meridian may contribute to
or be linked to procurement
practices that have negative
impacts on the environment,
people and human rights; and
affect the reputation of Aotearoa.
What we are doing about it
(including key policies and commitments)
Deep dive
section
• Committed to the annual assessment, management and disclosure of climate-related risks
Commercial
and adaptation planning- aligned with the Aotearoa New Zealand Climate Standards
• Climate-related issues change programme advanced, including Climate Risk and Opportunity
Framework 2023, which outlines Meridian’s evolved approach to climate-related risk
assessment and management. Refer to FY23 Climate-related Disclosure for details of material
risks and opportunities identified, and management actions adopted
• Committed to continued connection for customers in debt, who are actively engaging with
us in line with our Consumer Care Policy (full alignment to Electricity Authority Consumer
Care Guidelines)
Natural
• Launched a $5 million Energy Wellbeing Programme which aims to support 5,000 households
experiencing energy hardship over the next two years
• Wholesale social hedge offers to retailers focused on energy hardship
• Funded membership to ERANZ (Electricity Retailers Association) & associate activities:
Energy Mate programme; Connect Me pilot; Low Fixed User Removal Credit; Energy Hardship
working group
• Dedicated in house Credit Team focused on supporting customers in debt with plans and
options to get back on track
• Availablility of a Level Pay Payment Option (customer control on fixed amount and frequency)
• Referral service to FINCAP (free financial mentoring service) and MoneyTalks Financial Services
• Connection with WINZ and Ministry of Social Development (MSD)
• Support of governmental efforts to support energy hardship work
• Group Code of Conduct – commitment to new ethical practices and to aligning practice with
the UN Guiding Principles on Business and Human Rights. This includes all rights under the
UN International Bill of Human Rights and the principles concerning fundamental rights in the
International Labour Organization’s Declaration on Fundamental Principles and Rights at Work
• https://www.meridianenergy.co.nz/about-us/investors/governance/policies – multiple
Natural
relevant UN SDGs of focus
• Meridian Supplier Code of Conduct
• Meridian Modern Slavery Framework (including application of supply chain due diligence)
• Whistleblowing Policy
• Meridian Sustainable Infrastructure Framework (including ethical practices/human rights
considerations) and application of Sustainabiltiy Management Plans for all development projects
• Anti Money Laundering guidelines
• United Nations Global Compact member
1 5 41 5 4
30
In FY23 we added the impact ‘Addressing inequality of access to new energy technologies’ to the topic ‘Access to affordable energy’ to reflect stakeholder feedback and ensure the impact management
and mitigations were not conflated.
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 FY23
material topics
Business
emissions
and waste
Material impacts
Material impact definition
Disposal of waste
and other emissions
Meridian directly causes waste
to landfill and harmful gaseous
emissions from its development,
generation and corporate activities.
Sustainability
thought
leadership
Leading and
influencing change
and progress on
sustainability issues
Through its leadership and influence,
Meridian can contribute to ambitious
commitments and action in
collaboration with other companies
and organisations on social and
environmental issues that are most
relevant to the business.
What we are doing about it
(including key policies and commitments)
Deep dive
section
• Half by 30 commitment, including waste reduction targets and numerous others – refer to
Human
Climate Action Plan
• The Science Based Targets initiative approved our absolute near-term emission reduction
target. We have also committed to set long-term emission-reduction targets with the SBTi in
line with reaching net-zero by 2050
• Committed to offsetting 100% of business emissions – refer to FY23 Greenhouse Gas
Inventory for details
• Continuation of Forever Forests – our afforestation emission removal project
• Committed to applying RECs (CRE) to all of our electricity consumption
• Launched an annual Internal Decarbonisation Fund (IDF) to finance additional decarbonisation
within our business operations
• Launched our internal Sustainable Infrastructure Framework – identifying a projects most
material impacts and ensuring mitigation strategies are set in Sustainability Management
Plans for major projects
• Sustainability KPIs for major projects (e.g. waste and emission targets for Harapaki wind farm
construction)
Internal Circular Economy Framework developed and waste-practices stocktake completed
•
• Adoption of evolving best practice climate risk assessment methodologies. Change
programme underway for alignment with Aotearoa New Zealand Climate Standards
• Ambitious, leading commitments such as supporting process heat electrification and
Natural
virtual power plant technology
• Proactive media communications
• Member of NZ Climate Leaders Coalition – CEO recent member of the steering committee
• CEO and senior management presenting at numerous forums
•
Internally – Biodiversity ‘next horizon’ discovery work commenced advancing pilot opportunities
to align with a nature positive ambition
• First Human Rights Risk Assessment commenced. Commitment to Human Rights updated in
Group Code of Conduct
• Updated our 7 x 7 renewable development commitment
Supporting
communities
Supporting
opportunities for
local communities
Meridian is directly linked to
supporting various initiatives and
groups that foster the wellbeing
of communities living close to
generation assets and more
widely across Aotearoa.
Creating employment and
career opportunities for local
communities.
• Power Up fund – our commitment to an annual fund that supports local projects in the areas
Human
near our wind turbine farms and hydro stations
• The Decarbonisation Community Fund reinvests the net revenue from our Certified Renewable
Energy product into community-based emission-reduction projects
• Ongoing work with schools, provide scholarships to promote tertiary education
• Pathways for students to get into STEM employment
• Recreational opportunities provided for local communities near assets (e.g. angling and rowing)
• Sponsorships for community events which support emergency services or community assets
such as biking and running trails (e.g. Hydro Half Marathon, Meridian Milford Mount Classic)
• New Head of Stakeholder Engagement Role established
1 5 51 5 5
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 FY23
material topics
People
Material impacts
Material impact definition
What we are doing about it
(including key policies and commitments)
Business
performance:
Diversity and equal
opportunities
Meridian can directly impact
on diversity and equality by
continuing to focus on increasing
equal opportunities for everyone
irrespective of factors like age,
gender, ethnicity, country of origin,
disability and sexual orientation.
Greater diversity encourages new
thinking and innovation that can
support Meridian’s future
business success.
• Meridian’s Belonging Policy – designed to ensure Meridian recognises the value of a
diverse and skilled workforce and is committed to creating and maintaining an inclusive and
collaborative workplace culture
• Meridian’s Belonging strategy – ensuring we are inclusive, respectful, supportive and
representative of the society and communities we operate (refreshed for FY24–FY26)
• Accredited with the Rainbow tic and have implemented Gender Identity Expression and
Sexual Diversity Guidelines
Initiatives within the Gender and Team Rainbow groups
• Member of Pride Pledge
•
• Accessibility commitment
• Accredited with the Accessbility Tick
• Member of Mind the Gap – committed to providing pay gap data for both gender and ethnicity
• Accredited member of the Gender Tick programme
• Refreshed our Te Kete Tikanga Māori programme
• Launched pilot of ‘Education Perfect” a Te Ao Maori education platform
Deep dive
section
Human
Cyber security31
Business disruption,
cyber security and
breach of privacy
Meridian is directly linked to
the protection of customer and
other data and access to critical
systems and operating assets
from cyber attack.
• Our Information Security Policy and Security Strategy (Refreshed for FY23-25)
• The FY23 Security Awareness programme resulted in great feedback and measurable
Technology
improvement in our security culture across the business
• Completed the rollout of our network segmentation project that enables us to segregate sites if
they are compromised and to detect and contain internal intrusions
• Our Information Security Policy and Security Strategy (Refreshed for FY23-25)
• The FY23 Security Awareness programme resulted in great feedback and measurable
improvement in our security culture across the business
• Completed the rollout of our network segmentation project that enables us to segregate sites if
they are compromised and to detect and contain internal intrusions
• PwC’s 24x7 Managed Cyber Defence (MCD) service was tightly integrated, enhancing our
security incident detection and response capability and processes
1 5 61 5 6
31 Cyber Security is a new material topic reported on in FY23 due to it scoring above our significance threshold in FY23.
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 “
We focus on the
UN Sustainable
Development Goals
(SDGs) that relate to
our impacts on the
economy, environment
and people (including
human rights).”
United Nations Sustainable
Development Goals
Our contribution to the Sustainable
Development Goals (SDGs) in the
pursuit of achieving the UN SDG
Agenda 2030, matter.
We focus on the UN Sustainable
Development Goals (SDGs) that
relate to our impacts on the
economy, environment and people
(including human rights).
By mapping the SDGs to the
material impacts we have identified
throughout our value chain and
business relationships, we believe
that the greatest contribution we
can make as an energy company
in a time when significant
global, national and multi-sector
decarbonisation is required is to:
• enable the expansion and
access to affordable, efficient
and clean energy. This includes
enabling the decarbonisation
of other sectors, our customers
and our communities
• ensure we decarbonise our
own operations meaningfully
while adapting and building
resilience to the risks posed
by climate change
• ensure we contribute
meaningfully to social wellbeing,
fair commercial actions and
respecting human rights in our
operations and throughout
our value chain.
Our four priority SDGs that
reflect this are:
• SDG7 Affordable and Clean Energy
• SDG8 Decent Work and
Economic Growth
• SDG12 Responsible Consumption
and Production
• SDG13 Climate Action.
The other goals that are significant
to us in relation to the way that
we manage our impacts, or are
important to stakeholders include:
• ensure we consume and
• SDG5 Gender Equality
manage resources responsibly
in both our operations and
development activities
• SDG6 Clean Water and Sanitation
• SDG9 Industry, Innovation
and Infrastructure
• SDG10 Reduced Inequalities
• SDG15 Life on Land.
You can read more about how
we are contributing to our priority
SDGs in the table following.
In addition, as a participant in the
United Nations Global Compact,
we have committed to aligning
our strategies and operations with
10 universally accepted principles
(unglobalcompact. org/what-is-gc/
mission/principles) in the areas of
human rights, labour, environment
and anticorruption. Our annual
public communication on progress
demonstrates our progress against
the principles and how we are
taking action in support of UN goals
and issues embodied in the SDGs.
Further information on the role of
the Board and Executive Team in
relation to setting and achieving our
SDGs can be found in our Board
Charter, Safety and Sustainability
Committee Charter, Sustainability
Policy and Corporate Governance
Statements.
1 571 57
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 SDG
SDG Target
How we contribute
Learn more
Affordable
and Clean
Energy
7.2
Increase global
percentage
of renewable energy
We continue to operate our renewable generation assets representing 30% of NZs
electricity supply and are committed to increasing the supply of renewable energy via
our ambitious development pipeline.
Advancing our Southern Green Hydrogen Project.
7.3 Double the
improvement
in energy efficiency
We are maximising demand flexibility so that we can help our electricity system to be
used efficiently to manage peak loads – creating a more reliable, decarbonised and cost
effective system.
We are working with our customers to improve energy efficiency via the Energy Hardship
team’s Energy Well being programme.
• pg 26–27: A multi-decade commitment to renewable
growth
• pg 69–70: Doubling our development ambitions
• pg 28: Advancing our southern green hydrogen project
• pg 68: Partners finalised for hydrogen developments
• pg 64: Managing key assets for value
• pg 66: Demand Response Agreement reached with NZAS
• pg 68: Partners finalised for hydrogen developments
• pg 73: Processing big changes
• pg 74: Electrification supports demand flexibility
• pg 110–111: Addressing Energy wellbeing
Decent
Work and
Economic
Growth
8.4
Improve resource
efficiency in consumption
and production
We are baking resource efficiency into the design of our new assets via procurement
settings and collaboration and engagement with our supply chain – guided by our
Sustainable infrastructure Framework (SIF)
• pg 50: A new standard for sustainable infrastructure
development
8.5 Full employment
and decent work
with equal pay
8.6 Promote youth
employment, education
and training
8.7 End modern slavery,
trafficking, and
child labour
We are ensuring that all our workers are paid a living wage.
• pg 135: Our approach to remunerating our people/
fixed remuneration
We have relaunched our Belonging strategy – a strategy for ensuring we are inclusive,
respectful, supportive and representative of the society and communities we operate.
• pg 31: Continuing to attract talented people
• pg 94–96: Building our sense of belonging
We have received accrediatation via the Gender Tick programme, the Accessibility Tick
programme and Rainbow Tick as a workplace where people are free to be their authentic
selves.
• pg 94–96: Building our sense of belonging
• pg 96–102: Addressing gender injustice
We are providing career pathways for students into STEM (Science, Technology,
Engineering and Mathmatics).
• pg 96: Addressing gender injustice
We are working with schools to provide scholarships promoting tertiary education.
• pg 106: Connected to communities
We have committed to aligning our practices with the UN Guiding Principles on Business
and Human Rights including all rights under the UN International Bill of Human Rights and
the principles concerning fundamental rights in the International Labor Organization’s
Declaration on Fundamental Principles and Rights at Work. We commenced our first
Human Rights risk assessment in FY23 and will be focused on maturing our Human
Rights due diligence, grievance and remediation processes in the future.
We have an internal Modern Slavery Framework and release annual Modern Slavery
Statements. We ensure that procurement categories deemed to be high risk of modern
slavery have mitigation measures in place.
• pg 103-104: Doing our part to respect human rights
• pg 104: Doing our part to respect human rights
8.8 Protect labour rights
and promote safe
working environments
We are committed to world class performance in safety, health and wellbeing. We
provide safety and health standards, procedures and systems to reduce risk and prevent
incidents, occupational illnesses and injuries.
• pg 32: Keeping our people safe from harm
We require that all high risk procurement categories in our supply chain complete a
Modern Slavery Questionnaire that includes asking suppliers about their policies relating
to health and safety and labour rights.
• pg 104: Doing our part to respect human rights
1 5 81 5 8
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023
SDG
SDG Target
How we contribute
Responsible
Consumption
and Production
12.2 Sustainable
management and use of
natural resources
We are baking resource efficiency into the design of our new assets via procurement
settings and collaboration and engagement with our supply chain. Guided by our
Sustainable infrastructure Framework (SIF)
12.4 Responsible
management
of chemicals and waste
We have developed our internal Circular Economy Framework, designed to help us
start delivering on circular outcomes including minimising the generation of hazardous
waste and ensuring that all hazardous waste is managed in accordance with agreed
international frameworks.
12.5 Substantially reduce
waste generation
We have developed an internal Circular Economy Framework (as above) – this includes
a focus on minimising our production of hazardous and non-hazardous waste, and
maximising the amount of waste re-used, and recycled.
Learn more
• pg 50: A new standard for sustainable
infrastructure development
• pg 47–48: Thinking Full Circle
• pg 47–48: Thinking Full Circle
Climate
Action
13.1 Strengthen resilience
and adaptive capacity
to climate-related
disasters
Our Half by 30 commitment – includes a focus on waste reduction – refer to Climate Action
Plan for our waste targets and initiatives.
We use our Sustainable Infrastructure Framework (SIF) to identify and manage the
waste impacts of our development projects. Those responsible estimate, identify and
implement initiatives to ensure that waste is either designed out or that reduction is
optimised following the avoid, reduce, re-use, recycle hierarchy.
We have voluntarily disclosed the financial impacts of climate-related issues since 2019.
In FY23 significant effort was made to align reporting with the Aotearoa New Zealand
Climate Standards, this included a greater focus on adaptation. This includes assessment
of actual/potential risk to elements: Financial, People, Strategic, Reputation, Environment.
Of note – we consider the risks of the built environment, impacts from Meridian assets,
and impacts on assets owned by others which we depend on.
• pg 50: A new standard for sustainable
infrastructure development
• pg 46: Aiming for best disclosure on climate
13.2 Integrate climate
change measures into
policy and planning
We are taking action on our Half by 30 and near term Science Based Target. We are
ensuring these targets are integrated into our strategy, risk management, planning and
project management processes. You can read more in our Climate Action Plan – our road
map for achieving our climate targets.
A key priority in our Climate Action Plan is decarbonising our customers. This includes
helping businesses to electrify process heat, investing in EV infrastructure and supporting
demand flexibility.
• pg 46: Fully scoping our emission reductions
• pg 71: Zero to 200+in next to no time
• pg 72: Certified renewable energy promotes
decarbonisation
• pg73: Processing big changes
Gender
Equality
5.5 Ensure full participation
in leadership and
decision-making
We have set a goal to achieve gender balance in diversity with a focus on leadership and
senior roles.
• pg 96: Addressing Gender injustice
Clean Water
and Sanitation
6.6 Protect and restore
water-related
ecosystems
We have a Biodiversity and Deforestation Commitment which outlines our commitment
to comply with all environmental legislation including resource consent conditions across
our assets. In addition, we have our avoidance, remediation, mitigation restoration and
compensation programmes designed to mitigate our impact on water catchments and
the extent of change to water-related ecosystems over time. Highlights include – Project
River Recovery, and Collaboration with Guardians of the Lake.
• pg 37–39: Preserving Water Quality
• pg 40–41: Broadening our commitment to nature
and biodiversity
1 591 59
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023
SDG
SDG Target
How we contribute
Learn more
Industry,
Innovation
& Infrastructure
9.4 Upgrade all industries
and infrastructures
for sustainability
We are contributing to the increase in the amount of renewable energy needed
for the expanded electrification of Aotearoa's energy grid via our ambitious
development pipeline.
• pg 26: A multi-decade commitment to renewable growth
• pg 28: advancing our southern green hydrogen project
• pg 68: partners finalised for hydrogen developments
We have a range of commitments and active work programmes to achieve
decarbonisation for our customers beyond renewable energy generation.
Our Energy Innovation work programme focuses on: Transport, Distribution
and Storage, Process Heat and Demand Flexibility.
We have launched our Sustainable Infrastructure framework - designed to help our
asset development projects to identify and mitigate their most material impacts via
a Sustainability Management Plan. This includes, but is not limited to, setting KPIs on
the reduction of embodied emissions and waste.
We have relaunched Meridian's Belonging strategy - a strategy for ensuring we are
inclusive, respectful, supportive and representative of the society and communities we
operate. Our diversity and inclusion programme centres on seven focus areas: Te Ao
Maori, Accessibility, Gender, Rainbow, Ethnicity, Inclusion and Wellbeing. We are also
members of the Mind the Gap programme which means we are committed to providing
pay gap data for both gender and ethnicity.
• pg 28: Advancing our Southern Green Hydrogen Project
• pg 29: Contingencies in place for the NZAS contract
• pg 66: Demand Response Agreement reached with NZAS
• pg 71: Zero to 200+in next to no time
• pg 72: Certified renewable energy promotes decarbonisation
• pg73: Processing big changes
• pg 50: A new standard for sustainable infrastructure
development
• pg 79: A new standard for low-carbon construction
• pg 31: Continuing to attract talented people
• pg 94–95: Building our sense of belonging
• pg 96–100: Addressing gender injustice
Reduced
Inequalities
10.3 Ensure equal
opportunities
and end
discrimination
Life on Land
15.2 End deforestation
and restore
degraded forests
We are contributing to afforestation via our Forever Forests planting programme – an
emission removal commitment with biodiversity and social benefits based on adopting
a mixed exotic/native forest model, transitioning to 100% natives over time.
• pg 40–41: Broadening our commitment to nature
and biodiversity
• pg 50: A new standard for sustainable infrastructure
We have launched our no net deforestation commitment for our operations (excluding
wilding conifers).
development
15.5 Protect biodiversity
and natural habitats
We are committed to the Kākāpo recovery programme – a partnership with the
Department of Conservation and Ngāi Tahu, to bring the Kākāpo back from the brink
of extinction via a breeding programme and predator free islands.
We are contributing to the Project River Recovery project in partnership with DOC.
This project focuses on intensive weed control, predator control, wetland construction,
and research and monitoring programs in order to protect the birds, fish and
invertebrates reliant on the rivers which are under threat from declining water
quality, introduced predators and habitat loss.
In the Waiau catchment we continue to work closely with the Waiau Fisheries and Wildlife
Habitat Enhancement Trust to enhance stream and wetland habitats for fisheries and wildlife.
We are committed to the Elver Trap and Transfer programme - a mitigation programme
designed to manage the impacts our hydro dams have on Elver (young Tuna) – providing a
sustainable population of eel in the Waiau and Waitaki catchments by moving thousands of
tuna each year in partnership with Ngāi Tahu and other local stakeholders.
We are contributing to the Project River Recovery project in partnership with DOC. This
project focuses on intensive weed control, predator control, wetland construction, and
research and monitoring programs in order to protect the birds, fish and invertebrates
reliant on the rivers which are under threat from declining water quality, introduced
predators and habitat loss.
15.8 Prevent invasive alien
species on land and
in water ecosystems
1 6 01 6 0
• pg 37–39: Preserving water quality
• pg 40–41: Broadening our commitment to nature
and biodiversity
• pg 108: Expanding our productive partnerships
• pg 37–39: Preserving water quality
• pg 40–41: Broadening our commitment to nature
and biodiversity
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023
GRI Standards
Again this year, we’re included in
the Dow Jones Sustainability™ Asia/
Pacific Index, which adopts a robust
and structured Environmental, Social,
and Governance framework to assess
performance. We were particularly
proud to gain recognition in the 2023
S&P Global Sustainability yearbook as
an “Industry Mover” which recognises
participating companies in the top
15% of each industry who achieved an
improvement in their ESG score of at
least 5%, and achieved the strongest
improvement in their industry.
Since 2019 Meridian has voluntarily
adopted the Task Force for Climate-
related Financial Disclosures (TCFD)
framework to identify our climate-
related risks and opportunities,
and where those are transitional
or physical. In December 2022
the New Zealand XRB (External
Reporting Board) released
new climate standards that are
compulsory for publicly listed
companies (and other specified
organisations). Meridian's FY23
disclosure is in substantial early
voluntary alignment with these
standards a year before required in
our FY24 report. While the Aotearoa
New Zealand Climate Standards
do strongly align to TCFD, they
go further with a number of
specific requirements. Our climate
related disclosure (CRD) describes
how climate-related issues are
governed, how risks are managed,
any impacts or influences of these
on our strategy and what associated
metrics and targets we set for
ourselves. During the year, we have
assessed our climate-related risks
and opportunities and ensured
mitigation/action plans are in place
to address them. The key climate-
related risks and opportunities for
each category (where quantified) are
summarised below. Please refer to
our FY23 Climate-related Disclosure
for additional analysis/discussion on
the other climate-related risks and
opportunities identified.
Annually we submit our
communication on progress to the
United Nations Global Compact
against the 10 principles in the
areas of human rights, labour,
environment, and anti-corruption
and the sustainable development
goals. We are completing this
for the first time, following our
participation of the United Nations
Global Compact in FY22.
We also prepare the Annual Report
to meet integrated reporting
framework whilst aligning to the 2021
GRI Standards. Both frameworks and
standards ensure we communicate
concisely how our strategy,
governance and performance
work together, in the context of our
external environment, to enable
us to step up together and deliver
balanced, sustainable value creation.
The relevant director committees
review our reported information at a
quarterly Committee meeting, and
recommend that information be
approved at the subsequent monthly
Board meeting. For example, the
Annual Report and its alignment
with the GRI Standards is reviewed
by the Safety and Sustainability
Committee and the FY23 CRD is
reviewed by the Audit and Risk
Committee. Both Committees
subsequently recommend that
reported information be approved
by the Board.
Category title
Financial impacts
Management actions
Physical risk – More intense, extreme rainfall
events in hydro catchments
FY23 nil; Potential future $10–$15 NZ million per
annum annualised
Dam Safety Hydrology Group (DSHG) work; 10 yearly probable maximum
precipitation (PMP)/probable maximum flood (PMF) review; Insurance in place.
Transition risk – Power system flexibility
FY23 actual: $20 NZ million; Future potential
$20–$80 NZ million per annum
Mature commodity risk framework in place with allowable exposure limits;
Investment in assets and strategies to increase flexibility; Asset management and
outage planning.
Physical opportunity – Annual and seasonal
hydro inflow profiles improving generation
and demand alignment
Transition opportunity – Electrification
of transport and process heat, and virtual
power plant
FY23: nil; Future potential: $10–$60 NZ million per
annum annualised
Wholesale market team application of market optimisation approach – informed by
forecasts and analysis of weather patterns.
FY23: $1 NZM; Future potential: $10–$40 NZ million
per annum annualised
Pursuing alternative forms of electricity demand focused on electrification of
industrial heat and transport, and scaling of
a Virtual Power Plant.
1 61
1 61
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 Balancing
our risks
The Board sets Meridian’s overall appetite for risk and
its approach to risk management. A summary of our
key risks and the role of the Board and Audit and Risk
Committees in risk management reviews can be found
in the FY23 Corporate Governance Statement.
12 key risks
• Health and safety
• Market supply
• Adverse hydrological conditions
• Demand risks
• Catastrophic event
• Critical equipment or technology failure
• Access to water
• Legislative and regulatory risks
• Competitor behaviour
• Cyber security
• Peak Capacity
• Economic Climate
1 62
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 Three priority risks
Health and safety
There is always a risk that an incident will
lead to a fatality or serious injury for a staff
member, contractor, customer or member
of the public given Meridian’s technically
challenging operating environment. Meridian
has a broad control framework to manage these
critical health and safety risks and a strategy
to continually improve and strengthen our
health and safety systems. With the current
cost of living challenge, we are seeing an
increase in customer-related concerns and
have well-embedded customer care processes
and training to ensure our customer services
representatives appropriately assist our
customers alongside the Energy Hardship
Programme we have recently implemented.
Meridian also has a programme in place to
support the mental wellbeing of our staff to
manage both risks within our workplace and
those that are generated externally through our
customer interactions.
Market supply
Adverse hydrological conditions
There is a risk of a disorderly transition to meet the
government’s renewable electricity generation
target, which is also identified in Meridian’s FY23
Climate-related Disclosure under risk Power
system flexibility. One key risk is the premature
retirement of thermal generation prior to new
renewable electricity being in place – specifically
the risk of early retirement of gas generation
given its role as a transition fuel. Another key risk
is market interventions impacting the potential
returns from new renewable electricity projects
which would likely have a detrimental impact
on investment in new generation. In response,
Meridian has adapted its strategy which flows
through to preparation for and accelerated
delivery of new generation and flexible demand
response investments, operating practices and
how the company engages with stakeholders
and the messages it shares. Meridian’s range of
development options has more than doubled
during FY23 and includes wind, solar and grid-
scale batteries with the Harapaki Wind farm, due
to be completed in FY24.
Dry periods or drought conditions in the Waitaki
or the Waiau catchments may reduce water
levels and significantly affect our generation
capability. Meridian has a number of mitigations
in place to manage water during a dry period,
including wholesale hedge products and a
demand response agreement with NZAS to
enable demand response flexibility through to
the end of 2024. One of the potential benefits
of an investment in hydrogen production in the
lower South Island is the potential for demand
response during future dry periods. Additionally,
through Meridian’s Process Heat Electrification
Programme, we have been working with South
Island Industrial customers to decarbonise and
electrify their industrial plant which will further
improve dry year demand response availability.
Our FY23 Climate-related Disclosure also
highlights the risk of Increased hydro inflow
volatility due to changing seasonal weather
patterns (rain and drought) connects to this risk.
◄ Meridian flag at Benmore Power Station, Otematata.
1 6 31 6 3
PREPARING THIS REPORTMERIDIAN INTEGRATED REPORT 2023 Directors’
statement
1 6 4
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023 Our Board closely
monitors how the
company is managing
aspects of our
business that we
consider long-term
drivers of value.
◄ Te Whanganui-a-Tara Wellington's first electric ferry, Ika Rere.
1 6 5
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023 2
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
N
E
M
E
T
A
T
S
’
S
R
O
T
C
E
R
I
D
1 6 61 6 6
The standards
we report to
This Integrated Report reviews our financial, economic,
social and environmental performance for the year
ended 30 June 2023 (FY23). It has been prepared using
the International Integrated Reporting Framework,
and the 2021 Global Reporting Initiative (GRI).
The Report covers the performance of all members of the
Meridian Group, including our Meridian Energy and Powershop
brands, Dam Safety Intelligence in New Zealand and Flux
Federation (Flux), our electricity retailing software business that
operates in New Zealand and the United Kingdom. We also have
a Flux branch in Australia.
For the most part, the focus is on Group performance. Many of
the topics discussed also centre on the parent company, mainly
because the other businesses are smaller (representing less than
10% of the Group’s overall revenue).
The Report reflects the responsibility we feel to help New Zealand
continue to decarbonise and to take care of our customers, our
people, our local communities, iwi relationships and the
environment. We believe adopting this approach strengthens
our ability to deliver attractive shareholder returns and value
to all our stakeholders.
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023
About the Meridian Group
How we prepared this report
The Meridian Group is listed on the NZX and
the ASX. We are one of New Zealand’s largest
companies on the NZX, with a total market
capitalisation in excess of $14.5 billion, operating
revenue in FY23 of $3.2 billion, EBITDAF of
$783 million and net assets of $5.9 billion.
We’re majority owned by the New Zealand
Government, with legislation that specifically
precludes Meridian having any other significant
shareholders (i.e. with more than a 10% holding).
Our workforce of around 1,000 people is
directly employed by, or contracted to, us.
In FY23 we engaged around 620 people who
were not employees.32 These were mostly ICT
technical support whom we contract directly.
The Board has established processes to ensure
the quality and integrity of this Integrated Report
and has entrusted Management with preparing
and presenting it. To ensure all data is as accurate
as possible, the financial information has been
prepared in accordance with appropriate financial
reporting standards (see page 196) and audited
by Mike Hoshek for Deloitte Limited on behalf
of the Auditor-General (see the Independent
Auditor’s Report on pages 243–246).
The non-financial information has been prepared
in accordance with the 2021 GRI Universal
Standards requirements of the GRI Sustainability
Reporting Standards. Limited assurance over
the sustainability content has been provided by
Deloitte Limited (see the Independent Assurance
Report on pages 247–248).
The Meridian Group Greenhouse Gas Emissions
Inventory Report FY23 is summarised on pages
46–47 of this report. Reasonable assurance
over the GHG Report has been provided by
Deloitte Limited.
Our commitment to
effective governance
Our Board closely monitors how the company
is managing aspects of our business that we
consider long-term drivers of value. These
include retaining access to water, building
employee engagement, investing in new
assets, enhancing environmental performance,
advancing climate-related opportunities,
satisfying customers and building our
reputation and brand.
Strategy days and regular meetings allow
Board members to share their thoughts and
to question and challenge Management on
the direction it wishes to take the business.
These occasions also provide opportunities
to advance the Board’s collective knowledge
on sustainable development, which is highly
relevant to Meridian operations and strategy,
given our commitment to helping shift
Aotearoa to a net zero future.
◄ White Hill Wind Farm, Southland.
32
Information on workers who are not employees is compiled from our Contractor Support Database (contractors) and information gathered from internal stakeholders. Total rounded to the nearest 10 by headcount.
In FY22 the number of people engaged who were not employees was around 1,100. The decrease this year was driven by fewer volunteers being used for Forever Forest planting and fewer maintenance/construction
contractors at our wind farms.
1 67
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023 Meridian complies with the NZX
Corporate Governance Code
recommendations in all material
respects (with the exception of
recommendation 3.6 – see page
187 for more details).
Processes to prevent and mitigate
conflicts of interest are found in
the Board Charter and supported
by the Meridian Whistleblowing
Policy. The number of Group Code
of Conduct breaches is disclosed
annually through our Corporate
Governance Statement.
Our Board structure
Meridian recruits Board members
with a range of skills and
experience. There are currently
four female members and three
male members, meaning we have a
healthy gender balance. While the
company’s constitution does not
specifically require it, Meridian’s
Board has a collective view that the
relationship with Ngāi Tahu, which
has mana whenua (authority over
the land) over the majority of the
South Island where most of our
assets are located, is so important
that a position on the Board for
someone with connections to Ngāi
Tahu should always be considered.
This role is currently undertaken by
Tania Te Rangingangana Simpson.
Biographies of our directors and
the Executive Team are available at
www.meridianenergy.co.nz/about-
us. All directors are independent.
Further information about the
skills, composition and tenure of
Board members can be found in
the FY23 Corporate Governance
Statement. More information on the
nomination and selection process,
including criteria used, for Board
and committee appointments
is outlined in the Meridian
Constitution and Board Charter.
Our commitment to
effective governance continued
Our commitment to sustainable
development is embedded at
a governance level through the
Group Sustainability Policy, which
guides all associated choices and
behaviours for the business, and
also outlines the United Nations
Sustainable Development Goals
(UN SDGs) through which we
believe Meridian can have the
most impacts. Our approach to
managing our impact on economy,
environment and people is evident
throughout this report.
The Board also sets Meridian’s
overall appetite for risk and
approach to risk management.
Our FY23 Corporate Governance
Statement summarises our
key risks. We’ve also included
information on our risks and how
we manage them in this report.
1 6 8
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023 Our Board
Michelle Henderson Independent Director
David Carter Independent Director
Benjamin Bateman Future Director
Mark Verbiest Chair, Independent Director
Nagaja Sanatkumar Independent Director
Julia Hoare Independent Director
Tania Simpson Independent Director
Mark Cairns Independent Director
Graham Cockroft Independent Director
Diversity of perspective is important. Meridian recruits Board members with a range of skills and experience.
View our directors’ biographies at meridianenergy.co.nz/about-us/board-of-directors.
1 69
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023 Our Executive Team
Neal Barclay Chief Executive
Nic Kennedy Chief Executive, Flux Federation Limited
Lisa Hannifin Chief Customer Officer
Tania Palmer General Manager, Generation
Mike Roan Chief Financial Officer
Jason Stein Chief People Officer
Bharat Ratanpal Chief Information Officer
Chris Ewers General Manager, Wholesale
Claire Shaw General Manager, Corporate Affairs
& Sustainability
Guy Waipara General Manager, Development
Jason Woolley General Counsel & Company Secretary
170
View our Executive Team’s biographies at meridianenergy.co.nz/about-us/management-team
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023 The Board as a whole oversees
our progress as a responsible
generator, particularly as
it pertains to the Waitaki
reconsenting process. Our People
and Remuneration Committee
oversees how Meridian acts to
remain a great place to work.
Our Audit and Risk Committee
assists the Board in fulfilling its
responsibilities in matters related
to risk management, including
climate-related risks, and financial
accounting and reporting.
The role of people
and culture
If you would like
further information
Our people are critical to the
successful delivery of our strategic
goals, policies and processes.
The Board has approved a
wide range of policies that are
incorporated in the Company’s
operations and to which
Management must adhere.
These include our Group Code
of Conduct. The Code, which
all employees agree to honour,
provides guidance on the
behaviours that are expected
and how to handle the issues
and challenges team members
may face.
Our approach to remunerating
our people is on page 132.
As a business with a significant
retail shareholder base, we want
to be as accessible and open as
possible. If you’re a shareholder,
please feel free to ask questions,
request information or comment
on this report via Meridian’s
website or by directly contacting
the Investor Relations Manager at
investors@meridianenergy.co.nz.
We hope you will be able to join
the 2023 annual shareholder
meeting. It will again be a hybrid
meeting and there will be a link
to a live webcast on our website.
We will provide you with more
information closer to the time in
the Notice of Meeting.
The role of committees
Committees support the Board by
providing detail on specific issues
and inviting subject-matter experts
to offer insights and advice. The
committees, and the Board as
a whole, cover the spectrum of
resources on which we depend for
our business success, contribute to
the Company’s overall strategy and
direction and keep the Board well
informed of day-to-day operations.
The Board and committees also
oversee our alignment with the UN
SDGs. UN SDGs are approved by
the Board through its approval of
the Meridian Sustainability Policy,
which provides the framework to
embed sustainability leadership
across our business. The Safety
and Sustainability Committee has
responsibility for maintaining a safe
workplace culture and for actions
that contribute to the most relevant
UN SDGs for our business.
17 1
DIRECTORS’ STATEMENTMERIDIAN INTEGRATED REPORT 2023 2
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
T
N
E
M
E
T
A
T
S
’
S
R
O
T
C
E
R
I
D
Further
disclosures
Further disclosures required by the
NZX Listing Rules, the Companies Act 1993
and other legislation and rules.
17 2
17 2
West Wind farm, Makara, Te Whanganui-a-Tara Wellington.
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023
Meridian Energy
The table opposite outlines the
current directors of Meridian
Energy Limited. During FY23
there were two changes to the
directors of Meridian Energy
Limited: Jan Dawson ceased to
be a director; and Graham Cockroft
was appointed as a director.
Company name
Directors
Meridian Energy Limited
Mark Cairns, Graham Cockroft, Michelle Henderson, Julia Hoare, Nagaja Sanatkumar, Tania Simpson,
Mark Verbiest.
The Board has determined that, as at 30 June 2023, all Meridian directors are independent. The factors relevant to
this determination are that no director:
•
•
•
is currently, or was within the last three years, employed in an executive role by the issuer or any of its subsidiaries;
is currently deriving, or within the last 12 months derived, a substantial portion of their annual revenue from the issuer;
is currently, or was within the last 12 months, in a senior role in a provider of material professional services
(other than an external auditor) to the issuer or any of its subsidiaries;
•
is currently, or was within the last three years, employed by the external auditor to the issuer or any of its subsidiaries;
• currently has, or did have within the last three years, a material business relationship (e.g. as a supplier or
customer) with the issuer or any of its subsidiaries;
•
•
is a substantial product holder of the issuer, or a senior manager of, or person otherwise associated with, a
substantial product holder of the issuer;
is currently, or was within the last three years, in a material contractual relationship with the issuer or any of its
subsidiaries, other than as a director;
• has close family ties or personal relationships (including close social or business connections) with anyone in
the categories listed above; and
• has been a director of the entity for a period of 12 years or more.
Current Board
and Executive Team
gender composition
In accordance with NZX Listing
Rules, the gender make-up of
Meridian’s directors and officers
as at 30 June 2023 is:
Number of directors
Percentage of directors
Number of officers
Percentage of officers
As at 30 June 2023
As at 30 June 2022
Female
Male Gender diverse
Female
Male Gender diverse
4
57%
4
36%
3
43%
7
64%
–
0%
–
0%
5
71%
4
36%
2
29%
7
64%
–
0%
–
0%
West Wind farm, Makara, Te Whanganui-a-Tara Wellington.
◄ Charging an EV at one of Meridian's Zero charging stations.
173
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Meridian subsidiaries
New Zealand subsidiaries
The following tables list the
subsidiaries of Meridian Energy
Limited during the accounting
period, and any changes to those
subsidiaries and among the people
who held office as directors.
Company name
Company number Directors
Further information
Dam Safety Intelligence Limited
6152623
Neal Barclay, Jason Stein
No changes
Flux Federation Limited
6292491
Michael Roan, Kenneth Tunnicliffe,
Jodi Mitchell
Neal Barclay ceased to be a director
on 1 December 2022
Kenneth Tunnicliffe and Jodi
Mitchell were appointed directors
on 1 December 2022
Meridian Energy Captive
Insurance Limited
1612020
Neal Barclay, Michael Roan
No changes
Meridian Energy International Limited
1114014
Neal Barclay, Michael Roan
Meridian Limited
863312
Neal Barclay, Michael Roan
No changes
No changes
Meridian LTI Trustee Limited
4644639
Jan Dawson
Removed from the Companies
Office register on 12 October 2022
Powershop New Zealand Limited
8184062
Neal Barclay, Michael Roan
No changes
UK subsidiary
Company name
Flux-UK Limited
Directors
Further information
Kenneth Tunnicliffe, Nicola Kennedy
Kenneth Tunnicliffe appointed as
director 20 March 2023
Nicola Kennedy appointed as director
20 March 2023
Tania Palmer resigned as director
22 March 2023
Guy Waipara resigned as director
22 March 2023
174
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Particulars of entries in the
interests register made during
the accounting period.
Shareholders can review
Meridian Energy Limited’s full
interests register on request.
In accordance with sections 140
and 211(1)(e) of the Companies
Act 1993, the table opposite lists
the general disclosures of interest
by directors of Meridian Energy
Limited and its subsidiaries.
Name
Position
Disclosures
Mark Cairns
Director, Meridian Energy Limited Auckland International Airport Limited, Director
Graham Cockroft Director, Meridian Energy Limited
AGL Energy Limited, Director*
Freightways Limited, Chair
Sanford Limited, Director**
Jan Dawson
Michelle
Henderson
(appointed as a director on
26 July 2022)
Director, Meridian Energy Limited
and Meridian LTI Trustee Limited
(ceased to be a director on
18 October 2022)
Tuatahi First Fibre Limited, Director*
UFF Holdings Limited, Director*
First Fibre Midco Limited, Director*
First Fibre Bidco Limited, Director*
Ports of Auckland Limited, Chair
Serko Limited, Director
Director, Meridian Energy Limited Fulton Hogan Limited, Director
Fulton Hogan Land Development Limited, Director
Fulton Hogan Australia (Management) Pty Ltd, Director
Fulton Hogan Australia Pty Ltd, Director
Fulton Hogan Construction Pty Ltd, Director
Fulton Hogan Industries Pty Ltd, Director
Fulton Hogan Quarries Pty Ltd, Director
Fulton Hogan Transport Pty Ltd, Director
Fulton Hogan Utilities Pty Ltd, Director
South Port NZ Limited, Director
Awarua Holdings Limited, Director
Julia Hoare
Director, Meridian Energy Limited The a2 Milk Company Limited, Deputy Chair**
Auckland International Airport Limited, Director
Comvita Limited, Director*
Port of Tauranga Limited, Director
Northport Limited*
PrimePort Timaru Limited*
*
Entries added and effective during the year ended 30 June 2023.
** Entries removed by directors during the year ended 30 June 2023.
175
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 In accordance with sections 140
and 211(1)(e) of the Companies
Act 1993, the table opposite lists
the general disclosures of interest
by directors of Meridian Energy
Limited and its subsidiaries,
continued.
Name
Position
Disclosures
Nagaja
Sanatkumar
Director, Meridian Energy Limited Cawthron Institute, Director
Tuatahi First Fibre Limited, Director
First Fibre Midco Limited, Director
First Fibre Bidco Limited, Director
UFF Holdings Limited, Director
Foodstuffs North Island Limited, Director
Groov Ltd, Director*
Imagen8 Limited, Director
Mediaworks Investments Limited, Director**
New Zealand Post Limited, Director
Tania Simpson
Director, Meridian Energy Limited Auckland International Airport Limited, Director
Tainui Group Holdings Limited, Director
Ukaipo Limited, Director
Waikato Tainui Fisheries Limited, Director
Mark Verbiest
Director, Meridian Energy Limited ANZ Bank New Zealand Limited, Director**
Summerset Group Holdings Limited, Chair
Willis Bond & Co Limited, adviser to Property Income Fund Limited
*
Entries added and effective during the year ended 30 June 2023.
** Entries removed by directors during the year ended 30 June 2023.
176
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Name
Nagaja
Sanatkumar
Position
Disclosures
Director, Meridian Energy Limited Cawthron Institute, Director
During FY23, the following
disclosures were made in
accordance with section 148
of the Companies Act 1993:
Director
Nature of
relevant interest
Date
Acquisition/Disposal
Class
Number
acquired*
Consideration
received
per share
Graham Cockroft
Legal interest
25 August 2022
Acquisition
Shares
15,000
5,000
$5.10
$5.09
Legal interest
29 July 2022 –
initial disclosure
Acquisition
Shares
20,000
n/a
Jan Dawson
Beneficial interest
23 March 2023
Beneficial interest
23 September 2022
Acquisition – Dividend
Reinvestment Plan
Acquisition – Dividend
Reinvestment Plan
Shares
546
$5.21
Shares
1,065
$4.98
Tania Simpson
Director, Meridian Energy Limited Auckland International Airport Limited, Director
Michelle Henderson Legal interest
14 April 2023
Acquisition
Shares
2,861*
Julia Hoare
Legal interest
23 March 2023
Acquisition – Dividend
Reinvestment Plan
949*
Shares
42
Legal interest
16 March 2023
Acquisition
Shares
4,000
Legal interest
23 September 2022
Acquisition – Dividend
Reinvestment Plan
Shares
81
Tania Simpson
Beneficial interest
22 May 2023
Acquisition
Shares
1,654*
Tuatahi First Fibre Limited, Director
First Fibre Midco Limited, Director
First Fibre Bidco Limited, Director
UFF Holdings Limited, Director
Foodstuffs North Island Limited, Director
Groov Ltd, Director*
Imagen8 Limited, Director
Mediaworks Investments Limited, Director**
New Zealand Post Limited, Director
Tainui Group Holdings Limited, Director
Ukaipo Limited, Director
Waikato Tainui Fisheries Limited, Director
Mark Verbiest
Director, Meridian Energy Limited ANZ Bank New Zealand Limited, Director**
Summerset Group Holdings Limited, Chair
Willis Bond & Co Limited, adviser to Property Income Fund Limited
*
Entries added and effective during the year ended 30 June 2023.
** Entries removed by directors during the year ended 30 June 2023.
Beneficial interest
30 September 2022
Acquisition
Mark Verbiest
Beneficial interest
23 March 2023
Beneficial interest
23 September 2022
Acquisition – Dividend
Reinvestment Plan
Acquisition – Dividend
Reinvestment Plan
* Rounded to the nearest whole number.
Shares
626*
Shares
548
$5.23
$5.25
$5.17
$5.05
$4.98
$5.43
$4.77
$5.22
Shares
1,080
$4.98
17 7
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Auditor
The Auditor-General has appointed
Mike Hoshek of Deloitte as auditor
of the Company. Meridian and its
subsidiaries paid $0.7 million
(2022: $0.7 million) to Deloitte
as audit fees in FY23.
The fees for other services
undertaken by Deloitte during
FY23 totalled $0.2 million (2022:
$0.2 million). These related to
other assurance activities including
reviews of carbon emissions,
climate-related disclosure gap
analysis, securities registers, vesting
of the executive LTI plan, solvency
return of Meridian Energy Captive
Insurance Limited and trustee
reporting.
Interests in
Meridian securities
Executive Team
equity holdings
In accordance with NZX Listing
Rule 3.7.1(d), as at 30 June 2023
Meridian Energy Limited directors
had the following relevant interests
in Meridian Energy Limited Quoted
Financial Products:
Director
Number
of shares*
Number
of bonds
Mark Cairns
239,861
Graham Cockroft
40,000
Michelle Henderson 7,335*
Julia Hoare
8,164
Nagaja Sanatkumar
8,769*
Tania Simpson
4,291*
Mark Verbiest
48,198
–
–
–
–
–
–
–
* Rounded to the nearest whole number.
As at 30 June 2023, the following
Executive Team had relevant
interests in Meridian Energy
Limited shares as follows:
Executive
Team
Number
of shares
Unvested
performance
share rights
Neal Barclay
529,768
445,907
Chris Ewers
Lisa Hannifin
40,819
19,133
118,727
131,222
Mike Roan
252,525
175,840
Jason Stein
120,347
106,166
Guy Waipara
303,756
147,381
Tania Palmer
19,209
145,017
Bharat Ratanpal
17,646
Claire Shaw
12,037
Jason Woolley
–
Nic Kennedy
18,697
41,064
98,999
98,999
–
Directors' indemnity
and insurance
Pursuant to section 162 of the
Companies Act 1993, as permitted
by Meridian’s Constitution, Deeds
of Indemnity have been given to
directors for potential liabilities
and costs they might incur for
actions or omissions in their
capacity as directors. From 1 May
2023, Meridian’s directors’ and
officers’ liability insurance was
renewed to cover risks normally
covered by such policies. Insurance
is not provided for dishonest,
fraudulent, malicious or wilful acts
or omissions.
Donations
The Meridian Energy Group made
donations totalling $517,085.22
during FY23. Meridian does not
make donations to political parties.
All donations must be approved
by the Board. Donations do not
include sponsorships, community
funds, and contributions to
environmental and cultural
enhancement programmes.
17 8
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Twenty largest registered
holders of Quoted Financial
Products as at the balance date
The table opposite lists the
Company’s 20 largest registered
shareholders as at 30 June 2023:
Names
Number of shares
% of issued shares
The Sovereign in Right of New Zealand, acting by and through
their Minister of Finance and Minister for State Owned Enterprises
HSBC Nominees (New Zealand) Limited*
HSBC Nominees (New Zealand) Limited a/c State Street*
JPMorgan Chase Bank NA NZ branch-segregated clients acct*
Custodial Services Limited
Citibank Nominees (New Zealand) Limited*
BNP Paribas Nominees (NZ) Limited*
Accident Compensation Corporation*
JBWere (NZ) Nominees Limited
HSBC Nominees a/c NZ Superannuation Fund Nominees Limited*
National Nominees Limited*
TEA Custodians Limited Client Property Trust Account*
New Zealand Depository Nominee Limited
BNP Paribas Nominees (NZ) Limited*
ANZ Wholesale Australasian Share Fund*
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Simplicity Nominees Limited*
HSBC Custody Nominees (Australia) Limited
PT (Booster Investments) Nominees Limited
1,318,674,646
134,200,064
131,215,044
104,306,858
90,181,847
86,115,703
66,593,881
42,654,442
27,773,506
25,001,814
24,148,624
20,372,387
19,858,839
18,109,718
17,973,148
15,275,661
13,079,241
10,552,966
9,110,245
8,720,848
51.01
5.19
5.07
4.03
3.48
3.33
2.57
1.65
1.07
0.96
0.93
0.78
0.76
0.7
0.69
0.59
0.5
0.4
0.35
0.33
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
17 9
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 The table opposite lists the
Company’s 20 largest registered
holders of MEL040 retail fixed-rate
bonds as at 30 June 2023:
Names
Custodial Services Limited
BNP Paribas Nominees (NZ) Limited*
Citibank Nominees (New Zealand) Limited*
FNZ Custodians Limited
Forsyth Barr Custodians Limited
HSBC Nominees (New Zealand) Limited*
NZPT Custodians (Grosvenor) Limited*
Hobson Wealth Custodian Limited
BNP Paribas Nominees (NZ) Limited*
BNP Paribas Nominees (NZ) Limited*
Adminis Custodial Nominees Limited
TEA Custodians Limited Client Property Trust Account*
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Woolf Fisher Trust Incorporated
ANZ Custodial Services New Zealand Limited*
Investment Custodial Services Limited
HSBC Nominees (New Zealand) Limited a/c State Street*
MT Nominees Limited*
Public Trust
Number of bonds
% of issued bonds
33,715,000
29,344,000
11,337,000
8,919,000
7,491,000
7,060,000
4,065,000
3,958,000
2,500,000
2,420,000
2,397,000
1,939,000
1,503,000
1,463,000
1,300,000
1,080,000
1,075,000
1,000,000
1,000,000
1,000,000
22.47
19.56
7.55
5.94
4.99
4.7
2.71
2.63
1.66
1.61
1.59
1.29
1
0.97
0.86
0.72
0.71
0.66
0.66
0.66
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
1 8 0
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 The table opposite lists the
Company’s 20 largest registered
holders of MEL050 retail fixed-rate
bonds as at 30 June 2023:
Names
Custodial Services Limited
FNZ Custodians Limited
Forsyth Barr Custodians Limited
BNP Paribas Nominees (NZ) Limited*
BNP Paribas Nominees (NZ) Limited*
Hobson Wealth Custodian Limited
TEA Custodians Limited Client Property Trust Account*
ANZ Fixed Interest Fund*
HSBC Nominees (New Zealand) Limited*
Citibank Nominees (New Zealand) Limited*
Bank of New Zealand – Treasury Support
MT Nominees Limited*
ANZ Wholesale NZ Fixed Interest Fund*
Investment Custodial Services Limited
Mint Nominees Limited*
JBWere (NZ) Nominees Limited
Forsyth Barr Custodians Limited
NZX WT Nominees Limited
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Number of bonds
% of issued bonds
36,328,000
23,963,000
19,657,000
14,793,000
11,900,000
9,566,000
7,065,000
5,500,000
4,877,000
4,400,000
4,238,000
4,000,000
4,000,000
3,755,000
3,719,000
3,675,000
3,152,000
2,027,000
1,594,000
1,367,000
18.16
11.98
9.82
7.39
5.95
4.78
3.53
2.75
2.43
2.2
2.11
2
2
1.87
1.85
1.83
1.57
1.01
0.79
0.68
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
1 81
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 The table opposite lists the
Company’s 20 largest registered
holders of MEL060 retail fixed-rate
bonds as at 30 June 2023:
Names
Custodial Services Limited
Forsyth Barr Custodians Limited
JBWere (NZ) Nominees Limited
FNZ Custodians Limited
National Nominees Limited*
BNP Paribas Nominees (NZ) Limited*
Generate KiwiSaver Public Trust Nominee Limited
Queen Street Nominees ACF PIE Funds*
Hobson Wealth Custodian Limited
Investment Custodial Services Limited
Southland Building Society*
HSBC Nominees (New Zealand) Limited*
Forsyth Barr Custodians Limited
ANZ Wholesale NZ Fixed Interest Fund*
Mint Nominees Limited*
ANZ Fixed Interest Fund*
JBWere (NZ) Nominees Limited
HSBC Nominees (New Zealand) Limited a/c State Street*
MT Nominees Limited*
JBWere (NZ) Nominees Limited
Number of bonds
% of issued bonds
42,745,000
29,020,000
19,234,000
17,570,000
9,300,000
8,510,000
6,430,000
4,800,000
4,748,000
4,362,000
3,800,000
3,000,000
2,591,000
2,500,000
2,130,000
1,825,000
1,800,000
1,720,000
1,700,000
1,500,000
21.37
14.51
9.61
8.78
4.65
4.25
3.21
2.4
2.37
2.18
1.9
1.5
1.29
1.25
1.06
0.91
0.9
0.86
0.85
0.75
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
1 8 2
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Name
Ordinary shares
Relevant interest
in number of shares
% of shares held
at the date of notice
Date of notice
The Sovereign in Right of New Zealand, acting by and through
their Minister of Finance and Minister for State Owned Enterprises
1,318,674,646
51.01
6 July 2015
Substantial security holder
The following information is given
pursuant to section 293 of the
Financial Markets Conduct Act 2013
(FMCA). According to notice given
pursuant to section 280 of the
FMCA, the substantial security
holder in the Company and its
relevant interests as at the date
of the notice are noted opposite.
The total number of voting
products in the class as at
30 June 2023 was 2,584,734,122.33
Distribution of share-
holders and holdings
as at 30 June 2023
The table opposite provides
information on the distribution
of shareholders and holdings of
Meridian Energy Limited ordinary
shares as at 30 June 2023:
Size of holding
1–1,000
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001–9,999,999,999,999
Total
Number of holders
%
Number of shares
Holding quantity %
8,181
21,321
8,130
5,654
411
163
66
43,926
18.62
48.54
18.51
12.87
0.94
0.37
0.15
100
5,602,498
57,955,415
62,340,427
113,481,708
28,845,308
30,470,723
2,286,038,043
2,584,734,122
0.22
2.24
2.41
4.39
1.12
1.18
88.44
100
33 As at 30 June 2023, the total number of ordinary shares was 2,584,734,122, which included 1,565,008 ordinary shares held by Meridian as treasury stock.
1 8 3
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 The table opposite provides
information on the distribution
of MEL040 retail fixed-rate
bonds as at 30 June 2023:
The table opposite provides
information on the distribution
of MEL050 retail fixed-rate
bonds as at 30 June 2023:
The table opposite provides
information on the distribution
of MEL060 retail fixed-rate
bonds as at 30 June 2023:
Size of holding
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001 to 9,999,999,999,999
Total
Size of holding
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001 to 9,999,999,999,999
Total
Size of holding
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001 to 9,999,999,999,999
Total
1 8 4
Number of
bondholders
% of
bondholders
34
107
365
59
28
25
618
5.5
17.31
59.06
9.55
4.53
4.05
100
Number of
bondholders
% of
bondholders
32
89
314
77
25
31
568
5.63
15.67
55.28
13.56
4.4
5.46
100
Number of
bondholders
% of
bondholders
76
363
53
46
8
25
571
13.31
63.57
9.28
8.06
1.4
4.38
100
Number of
bonds
170,000
991,000
9,703,000
4,466,000
6,494,000
128,176,000
150,000,000
Number of
bonds
160,000
832,000
8,719,000
5,952,000
6,298,000
178,039,000
200,000,000
Number of
bonds
485,000
6,899,000
3,199,000
8,989,000
5,334,000
175,094,000
200,000,000
% of
bonds
0.11
0.66
6.47
2.98
4.33
85.45
100
% of
bonds
0.08
0.42
4.36
2.98
3.15
89.02
100
% of
bonds
0.24
3.45
1.6
4.49
2.67
87.55
100
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Waivers from NZX
On 31 January 2020, NZX
Regulation published a waiver
decision in respect of Listing Rules
5.2.1 and 8.1.5 which re-documented
a prior waiver decision dated 18
September 2013. A copy of this
waiver decision, and a summary of
all waivers granted and published
by the NZX or relied on by Meridian
during the 12 months preceding
30 June 2023, is available
on Meridian’s website at
meridianenergy.co.nz/about-us/
investors/governance/nzx-waivers.
Credit rating as
at 30 June 2023
S&P Global Ratings reaffirmed
Meridian Energy Limited’s credit
rating of BBB+/stable/A-2 on
11 April 2023.
Registration as
a foreign company
Meridian has registered with
the Australian Securities and
Investments Commission as a
foreign company and has been
issued with an Australian Registered
Body Number of 151 800 396.
Non-standard designation
ASX disclosures
In New Zealand, Meridian
Energy Limited has a ‘non-
standard’ (NS) designation on
the NZX Main Board. This is due
to particular provisions of the
company’s Constitution, including
requirements that regulate the
ownership and transfer of Meridian
securities. The NS designation is
also required as a condition of any
NZX waivers and approvals.
Meridian holds a foreign exempt
listing on the ASX. As a requirement
of admission, Meridian must make
the following disclosures:
• Meridian’s place of incorporation
is New Zealand.
51% holding
• Meridian is not subject to
Chapters 6, 6A, 6B and 6C of
the Australian Corporations Act
dealing with the acquisition of
shares (including substantial
holdings and takeovers).
The Crown must hold at least
51% of the shares on issue.
The company must not issue,
acquire or redeem any shares if
such issue, acquisition or redemption
would result in the Crown falling
below this 51% holding.
Shareholding restrictions
10% Limit
The Public Finance Act 1989 was
amended in June 2012 to include
restrictions on the ownership of
certain types of security issued
by each mixed-ownership model
company (including Meridian) and
the consequences of breaching
those restrictions. The constitution
incorporates these restrictions and
mechanisms for monitoring and
enforcing them.
A summary of the restrictions on the
ownership of shares under the Public
Finance Act and the constitution is
set out below. If the company issues
any other class of shares, or other
securities confer voting rights, in the
future, the restrictions summarised
below will also apply to those other
classes of shares and voting securities.
No person (other than the Crown)
may have a ‘relevant interest’34 in
more than 10% of the shares on
issue (10% Limit).
The company must not issue,
acquire, redeem or transfer any
shares if it has actual knowledge
that such issue, acquisition,
redemption or transfer will result in
any person other than the Crown
exceeding the 10% Limit.
Ascertaining whether
a breach has occurred
If a holder of shares breaches the
10% Limit or knows or believes that
a person who has a relevant interest
in shares held by that holder may
have a relevant interest in shares in
breach of the 10% Limit, the holder
must notify the company of the
breach or potential breach.
Meridian may require a holder of
shares to provide the company with
a statutory declaration if the Board
knows or believes that a person
is, or is likely to be, in breach
of the 10% Limit. That statutory
declaration is required to include,
34
In broad terms, a person has a ‘relevant interest’ in a share if the person (a) is the registered holder or beneficial owner of the share; or (b) has the power to exercise, or control the exercise of, a right to vote attached to the
share or has the power to acquire or dispose of, or to control the acquisition or disposition of, that share. A person may also have a ‘relevant interest’ in a share in which another person has a ‘relevant interest’ depending on
the nature of the relationship between them.
1 8 5
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 where applicable, details of all
persons who have relevant interests
in shares as a result of the shares
held by or on behalf of that holder.
Effect of exceeding the 10% Limit
A person who is in breach of the
10% Limit must:
• comply with any notice that
If a relevant interest is held in any
shares in breach of the 10% Limit,
then, for as long as that breach
continues:
Determining whether
a breach has occurred
The company has the power to
determine whether a breach of the
10% Limit has occurred. In broad
terms, if:
•
the company considers that a
person may be in breach of the
10% Limit; or
• a holder of shares fails to lodge
a statutory declaration when
required to do so or lodges a
declaration that has not been
completed to the reasonable
satisfaction of the company,
Meridian is required to determine
whether or not the 10% Limit
has been breached and, if so,
whether or not that breach was
inadvertent. The company must
give the affected shareholder
the opportunity to make
representations to the company
before it makes a determination
on these matters.
1 8 6
they receive from the company
requiring them to dispose of
shares or their relevant interest
in shares, or take any other steps
that are specified in the notice,
for the purpose of remedying
the breach and reducing their
holding to below the 10% Limit.
•
•
• ensure that they are no longer
in breach within 60 days
after the date on which they
became aware, or ought to
have been aware, of the breach.
If the breach is not remedied
within that timeframe, the
company may arrange for the
sale of the relevant number
of shares on behalf of the
relevant shareholder. In those
circumstances the company will
pay the net proceeds of sale,
after the deduction of any other
costs incurred in connection with
the sale (including brokerage
and the costs of investigating
the breach of the 10% Limit), to
the relevant shareholder as soon
as practicable after the sale has
been completed.
no votes may be cast directly by
a shareholder in respect of any
of the shares in which a relevant
interest is held in excess of the
10% Limit
a registered holder of shares in
which a relevant interest is held
in breach of the 10% Limit will
not be entitled to receive, in
respect of the shares in which
a relevant interest is held in
excess of the 10% Limit, any
dividend or other distribution
authorised by the Board in
respect of the shares.
However, if the Board determines
that a breach of the 10% Limit was
not inadvertent, or that it does
not have sufficient information to
determine that the breach was not
inadvertent, the restrictions on
voting and entitlement to receive
dividends and other distributions
described in the preceding
paragraphs will apply in respect
of all of the shares (as applicable)
held by the relevant shareholder or
holder (and not just the shares in
which a relevant interest is held in
excess of the 10% Limit).
The Board may refuse to register
a transfer of shares if it knows
or believes that the transfer will
result in a breach of the 10% Limit
or where the transferee has failed
to lodge a statutory declaration
requested from it by the Board
within 14 days of the date on
which the company gave notice
to the transferee to provide such
statutory declaration.
Crown directions
The Crown has the power to direct
the Board to exercise certain of
the powers conferred on it under
the constitution. For example,
where the Crown suspects that
the 10% Limit has been breached
but the Board has not taken steps
to investigate the suspected
breach, the Crown may require the
company to investigate whether
a breach of the 10% Limit has
occurred or to exercise a power
of sale of the relevant share that
has arisen as described under the
heading ‘Effect of exceeding the
10% Limit’ above.
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Trustee corporations
and nominee companies
NZX Corporate
Governance Code
Trustee corporations and nominee
companies (that hold securities
on behalf of a large number of
separate underlying beneficial
holders) are exempt from the
10% Limit provided that certain
conditions are satisfied.
Share cancellation
In certain circumstances shares
can be cancelled by Meridian
through a reduction of capital,
share buyback or other form of
capital reconstruction approved by
the Board and, where applicable,
shareholders.
Meridian complied with the
NZX Corporate Governance Code
recommendations in all material
respects during FY23 other than
in respect of recommendation
3.6 as the Board has determined,
given Meridian’s status as a mixed-
ownership model company, it is
not appropriate nor necessary
for Meridian to adopt a takeover
protocol, although there are
protocols to ensure compliance
with Meridian’s Constitution.
Meridian has a separate Corporate
Governance Statement. The
Corporate Governance Statement
outlines in detail Meridian’s
compliance with the NZX
Corporate Governance Code and
is current as at 29 August 2023.
Membership associations
• Electricity Engineers Association
• Engineering New Zealand
• Business Leaders’ Health
• New Zealand Society on
and Safety Forum
Large Dams
• Drive Electric Incorporated
• BusinessNZ
• Electricity Retailers’ Association
of New Zealand
• EV100
• New Zealand Hydrogen
Association Incorporated
• New Zealand Wind
Energy Association
• Sustainable Business Council
(SBC) and Climate Leaders
Coalition membership
• StayLive
• Power Engineering
Excellence Trust
Trade associations
Largest contributions
Value to electicity customers (BRANZ, The Energy Charter)
Sustainable business (SBC, SBN)
Clean energy advocacy (Clean Energy Council, NZ Wind Energy
Association, NZ Hydrogen Association, Drive Electric, Climate Leaders
Coalition, Melbourne Energy Institute)
Other large expenditures
(BusinessNZ, Business Energy Council, Australian Energy Council)
Total spent (NZD)
FY23 (NZD)
$58,500
$91,040
$96.950
$93,406
$339,896
1 8 7
FURTHER DISCLOSURESMERIDIAN INTEGRATED REPORT 2023 Our financial
performance
1 8 8
MERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE This year we
have successfully
navigated significant
weather events and
finished the year
strongly, ahead of
last year’s result.
◄ Manapōuri Power Station, Fiordland.
1 8 91 8 9
OUR FINANCIAL PERFORMANCEMERIDIAN INTEGRATED REPORT 2023MERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE Financial performance menu
Group financial statements
Notes to the Group financial statements
191
Income Statement
196 About this report
The income earned and operating expenditure incurred
by the Meridian Group during the financial year.
191
Comprehensive Income Statement
Items of income and operating expense, that are not
recognised in the income statement and hence taken
to reserves in equity.
192 Balance Sheet
A summary of the Meridian Group assets
and liabilities at the end of the financial year.
193 Statement of Changes in Equity
Components that make up the capital and
reserves of the Meridian Group and the changes
of each component during the financial year.
194 Statement of Cash Flows
Cash generated and used by the Meridian Group.
Key
Subsequent
events
Key judgements
and estimates
Risks
1 9 0
198
S: Significant matters in the financial year
203 A. Financial performance
A1. Segment performance
A2.
Income
A3. Expenses
A4. Taxation
210 B. Assets used to generate and sell electricity
B1. Property, plant and equipment B2.
Intangible assets
215
C. Managing funding
C1. Capital management
C6. Trade receivables
C2. Share capital
C7. Borrowings
C3. Earnings per share
C8. Green financing
C4. Dividends
C9. Lease liabilities
C5. Cash and cash equivalents
C10. Commitments
225 D. Financial instruments used to manage risk
D1. Financial risk management
238
E. Group structure
E1. Subsidiaries
239 F. Other
F1. Share-based payments
F2. Related parties
F3. Auditors remuneration
243 Signed report
Independent auditor’s report
F4.
Contingent assets
and liabilities
F5. Subsequent events
F6.
Changes in financial
reporting standards
MERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE Income Statement
For the year ended 30 June 2023
Comprehensive Income Statement
For the year ended 30 June 2023
Operating revenue
Operating expenses
Depreciation and amortisation
Impairment of assets
Net change in fair value of energy hedges
Finance costs
Interest income
Net change in fair value of treasury hedges
Net profit before tax from continuing operations
Income tax expense
Net profit after tax from continuing operations
Net profit from discontinued operations after tax
Net profit after tax attributed to the shareholders
of the parent company
Note
A2
A3
A3
A3, B1
D1
A3
A2
D1
A4
S2
2023
$M
3,222
(2,397)
Restated*
2022
$M
3,776
(3,188)
(294)
(10)
(375)
(55)
11
24
126
(31)
95
–
(293)
(2)
266
(73)
3
136
625
(174)
451
213
Note
S3, B1
A4
Net profit after tax
Other comprehensive income
Items that will not be reclassified to profit or loss:
Asset revaluation
Deferred tax on the above item
Items that may be reclassified to profit or loss:
Net (loss)/gain on cash flow hedges
Realisations on disposal of subsidiaries,
transferred to profit and loss
Income tax on the above items
Other comprehensive income/(loss) for the year, net of tax
2023
$M
95
2022
$M
664
1,111
(311)
800
(11)
–
3
(8)
792
(55)
15
(40)
16
24
(5)
35
(5)
95
664
Total comprehensive income for the year, net of tax
attributed to shareholders of the parent company
887
659
Earnings per share (EPS) attributed to ordinary equity holders of the parent
Cents
Cents
Basic and diluted EPS from continuing operations
Basic and diluted EPS
C3
C3
3.7
3.7
17.5
25.8
*
The Income Statement has been restated due to a change in presentation in the current year.
Refer to the Significant matters section Note S1 for more information.
The notes to the Group financial statements form an integral part of these financial statements.
1 9 1
1 9 1
OUR FINANCIAL PERFORMANCEMERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE
Balance Sheet
As at 30 June 2023
Current assets
Cash and cash equivalents
Trade receivables
Customer contract assets
Financial instruments
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Financial instruments
Total non-current assets
Total assets
For and on behalf of the Board of Directors who authorised
the issue of the financial statements on 28 August 2023.
Note
2023
$M
Restated*
2022
$M
Note
2023
$M
Restated*
2022
$M
C5
C6
D1
B1
B2
D1
212
334
13
141
47
747
363
399
16
213
50
Current liabilities
Payables and accruals
Employee entitlements
Customer contract liabilities
Current portion of borrowings
Current portion of lease liabilities
1,041
Financial instruments
8,989
7,830
73
213
9,275
10,022
85
413
8,328
9,369
Current tax payable
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax
Lease liabilities
Financial instruments
Term payables
Total non-current liabilities
Total liabilities
Shareholders’ equity
Share capital
Reserves
Total shareholders’ equity
C7
C9
D1
C7
A4
C9
D1
C2
352
20
14
214
3
71
46
720
1,022
2,103
24
111
55
3,315
4,035
1,700
4,287
5,987
10,022
449
18
13
159
4
47
32
722
1,004
1,932
37
97
54
3,124
3,846
1,671
3,852
5,523
9,369
Mark Verbiest
Chair, 28 August 2023
Julia Hoare
Chair, Audit and Risk Committee, 28 August 2023
Total liabilities and shareholders’ equity
*
The Balance Sheet has been restated due to a change in presentation in the current year.
Refer to the Significant matters section Note S1 for more information.
1 9 2
The notes to the Group financial statements form an integral part of these financial statements.
MERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE
Statement of Changes in Equity
For the year ended 30 June 2023
$M
Balance at 1 July 2021
Net profit for the 2022 financial year
Other comprehensive income
Asset revaluation
Transferred to retained earnings on disposal
Transferred to Income Statement on disposal
Net gain/(loss) on cash flow hedges
Income tax relating to other comprehensive income
Total other comprehensive income, net of tax
Total comprehensive income for the year, net of tax
Share-based transactions
Dividend reinvestment plan
Dividends paid
Balance at 30 June 2022 and 1 July 2022
Net profit for the 2023 financial year
Other comprehensive income
Asset revaluation
Net gain/(loss) on cash flow hedges
Income tax relating to other comprehensive income
Total other comprehensive income, net of tax
Total comprehensive income for the year, net of tax
Share-based transactions
Dividend reinvestment plan
Dividends paid/reinvested
Balance at 30 June 2023
Note
S3, B1
A4
C2, F1
C4
C4
S3, B1
A4
C2, F1
C4
C4
Share
capital
1,595
–
–
–
–
–
–
–
–
(2)
78
–
1,671
–
–
–
–
–
–
(1)
30
–
1,700
Share
option
reserve
Revaluation
reserve
Foreign
currency
translation
reserve
Cash flow
hedge
reserve
1
–
–
–
–
–
–
–
–
1
–
–
2
–
–
–
–
–
–
1
–
–
3
5,198
(24)
–
(55)
(113)
–
–
49
(119)
(119)
–
–
–
5,079
–
1,111
–
(311)
800
800
–
–
–
5,879
–
–
–
24
–
–
24
24
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2
–
–
–
–
16
(5)
11
11
–
–
–
13
–
–
(11)
3
(8)
(8)
–
–
–
5
Retained
earnings
(1,548)
Total
equity
5,224
664
664
–
113
–
–
(34)
79
743
–
–
(437)
(1,242)
95
–
–
–
–
95
–
–
(453)
(1,600)
(55)
–
24
16
10
(5)
659
(1)
78
(437)
5,523
95
1,111
(11)
(308)
792
887
0
30
(453)
5,987
The notes to the Group financial statements form an integral part of these financial statements.
1 9 31 9 3
OUR FINANCIAL PERFORMANCEMERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE
Statement of Cash Flows
For the year ended 30 June 2023
Operating activities
Receipts from customers
Interest received
Payments to suppliers and employees
Interest paid
Income tax paid
Operating cash flows
Investing activities
Sale of property, plant and equipment
Sale of subsidiaries
Purchase of property, plant and equipment
Purchase of intangible assets
Investing cash flows
Financing activities
Borrowings drawn
Borrowings repaid
Lease liabilities repaid
Dividends paid
Shares purchased for long-term incentive
Financing cash flows
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
2023
$M
2022
$M
3,354
3,934
11
2
(2,637)
(3,254)
(65)
(154)
509
2
–
(316)
(13)
(327)
255
(160)
(3)
(423)
(2)
(333)
(151)
363
212
(76)
(145)
461
2
768
(141)
(31)
598
210
(685)
(7)
(360)
(2)
(844)
215
148
363
C5
S2
C7
C7
C7
C4
C2
C5
1 94
The notes to the Group financial statements form an integral part of these financial statements.
Transporting one turbine blade to site at Harapaki Wind Farm, Hawke's Bay. ►
MERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE
1 9 51 9 5
OUR FINANCIAL PERFORMANCEMERIDIAN INTEGRATED REPORT 2023MERIDIAN INTEGRATED REPORT 2023 OUR FINANCIAL PERFORMANCE Key judgements
and estimates
In the process of applying the
Group’s accounting policies
and application of accounting
standards, Meridian has made
a number of judgements and
estimates. The estimates and
underlying assumptions are based
on historical experience and various
other factors that are considered
to be appropriate under the
circumstances. Actual results
may differ from these estimates.
Judgements and estimates are
considered material to understanding
the performance of Meridian are
found in the following notes:
• Note S3: Property, plant
and equipment
• Note A2: Income
• Note B1: Property, plant
and equipment
• Note D1: Financial risk
management
About this report
In this section
The notes to the financial statements
include information that is considered
relevant and material to assist the
reader in understanding changes in
Meridian Energy Limited’s (Meridian)
financial position or performance.
Information is considered relevant
and material if:
•
•
•
•
the amount is significant
because of its size and nature;
it is important for understanding
the results of Meridian;
it helps to explain changes in
Meridian’s business; or
it relates to an aspect of
Meridian’s operations that is
important to future performance.
Meridian is a for-profit entity
domiciled and registered under the
Companies Act 1993 in New Zealand.
It is an FMC reporting entity for the
purposes of the Financial Markets
Conduct Act 2013. Meridian’s core
business activities are the generation,
trading and retailing of electricity and
the sale of complementary products
and services. The registered office of
Meridian is at 287-293 Durham Street
North, Christchurch. Meridian is dual
listed on the New Zealand Stock
Exchange (NZX) and the Australian
Securities Exchange (ASX). As a mixed-
ownership company, majority owned
by His Majesty the King in Right of
New Zealand, Meridian is bound by
the requirements of the Public Finance
Act 1989.
These financial statements have
been prepared:
•
in accordance with Generally
Accepted Accounting Practice
(GAAP) in New Zealand and
comply with International Financial
Reporting Standards (IFRS) and the
New Zealand equivalents (NZ IFRS),
as appropriate for a for-profit entity;
•
in accordance with the requirements
of the Financial Markets Conduct
Act 2013;
• on the basis of historical cost,
modified by revaluation of certain
assets and liabilities;
•
in New Zealand dollars (NZD), with
all values rounded to millions ($M)
unless otherwise stated; and
• using accounting policies as
provided throughout the notes
to the financial statements.
1 96
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 About this report continued
Basis of consolidation
Foreign currency
The Group financial statements
comprise the financial statements
of Meridian and its subsidiaries and
controlled entities, as contained in
Note E1 Subsidiaries.
The financial statements of members of
the Group are prepared for the same
reporting period as the parent company,
using consistent accounting policies.
In preparing the Group financial
statements, all material intra-group
transactions, balances, income and
expenses have been eliminated.
Subsidiaries are consolidated from
the date on which control is obtained
to the date on which control is lost.
Transactions denominated in
foreign currencies are converted at
the exchange rates at the date of
the transactions. Foreign currency
monetary assets and liabilities are
translated at the rate prevailing at
balance date, 30 June 2023.
The assets and liabilities of any
international subsidiaries are
translated to NZD at the closing rate
at balance date. The revenue and
expenses of these subsidiaries are
translated at rates approximating
the exchange rates at the dates
of the transactions.
When the financial statements of
subsidiaries are translated into NZD,
exchange differences can arise. These
are recorded in the foreign currency
translation reserve (within equity). If
an international subsidiary is disposed
of, these cumulative translation
differences are recognised in the
Income Statement in the period in
which that occurs.
The principal functional currencies
of international subsidiaries are:
• British pounds; the closing rate
at 30 June 2023 was 0.4822
(30 June 2022: 0.5127); and
• Australian dollars; the closing
rate at 30 June 2022 was 0.9045.
A full list of international subsidiaries
and their functional currencies are
provided in Note E1 Subsidiaries.
Discontinued operations
Classification as a discontinued
operation occurs on disposal, or when
the operation meets the criteria to be
classified as a non-current asset or
disposal group held for sale, if earlier,
and represents a separate major line
of business or geographical area
of operations.
When an operation is classified as a
discontinued operation, the comparative
statement of comprehensive income
is re-presented as if the operation had
been discontinued from the start of the
comparative period. The comparative
Balance Sheet is not adjusted. In the
cash flow statement, neither current
or comparative period are adjusted.
1 9 7
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 S: Significant matters in the financial year
In this section
This section outlines significant
matters that have impacted
Meridian’s financial performance.
S1 Change in presentation of
realised energy hedge balances
During the current period, the
Group has made adjustments to the
classification and presentation of
realised energy hedge balances.
This follows a change in interpretation
of NZ IFRS 9 and its requirements.
In previous years, Meridian has
accounted for and disclosed realised
energy hedge balances as follows:
•
•
In the Income Statement, these
were classified as part of operating
revenue or operating expense,
depending on whether the
underlying derivative was a hedge
of energy sales or energy purchases.
In the Balance Sheet, accruals in
relation to realised energy hedges
were shown in the receivables
or payables and accruals lines,
depending on whether the accrual
was receivable or payable.
Our practice aligned with peers
in the New Zealand energy sector
and meant that the impact of risk
management activities (hedges)
were presented in the same places
as the risk hedged.
This practice does not comply with
NZ IFRS 9 and therefore it must be
discontinued. We note our past
practice would be acceptable if energy
hedges were in hedge accounting
relationships. However, we do not
hedge account for energy hedges.
As a result, we have amended the
classification of realised energy hedge
balances in both the current and
comparative periods.
The main impacts are as follows:
•
In the Income Statement, this
has meant the reclassification of
realised energy hedge balances
from operating revenue and
operating expenses to net change
in the fair value of energy hedges,
as well as the removal of some
subtotals. Notably, EBITDAF
(as defined in the Non-GAAP
measures section) is no longer
shown on the face of the Income
Statement. However, it remains one
of our core non-GAAP measures of
business performance, as reported in
Note A1 Segment Performance.
•
In the Balance Sheet, we have
reclassified realised energy hedge
balances out of trade receivables
and payables and accruals and
into the appropriate financial
instruments line.
We have also amended our definition of
EBITDAF to make clear that, as intended,
this core non-GAAP reporting measure
excludes unrealised movements on
energy hedges.
1 9 8
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 SS S1 Change in presentation of realised energy hedge balances continued
The impacts of the changes on the primary financial statements are as follows:
Income Statement
Operating revenue
Operating expenses
Comment
2022 Restated
$M
3,776
(3,188)
Earnings before interest, tax, depreciation, amortisation,
changes in fair value of hedges and other significant items (EBITDAF)
Subtotal removed
Depreciation and amortisation
Impairment of assets
Net change in fair value of energy hedges
Operating profit
Finance costs
Interest income
Net change in fair value of treasury hedges
Net profit before tax from continuing activities
Income tax expense
Net profit after tax from continuing operations
Net profit from discontinued operation after tax
Net profit after tax attributed to the shareholders of the parent company
Balance Sheet
Trade receivables
Financial instruments (current asset)
Financial instruments (non-current asset)
Payables and accruals
Financial instruments (current liability)
Financial instruments (non-current liability)
Subtotal removed
(293)
(2)
266
(73)
3
136
625
(174)
451
213
664
2022 Restated
$M
399
213
413
449
47
97
2022
$M
3,703
(2,994)
709
(293)
(2)
145
559
(73)
3
136
625
(174)
451
213
664
2022
$M
416
232
377
470
30
93
Change
$M
73
(194)
n/a
–
–
121
n/a
–
–
–
–
–
–
–
–
Change
$M
(17)
(19)
36
(21)
17
4
1 9 9
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
S
S2 Meridian Energy Australia
In January 2022, Meridian sold its
Meridian Energy Australia (MEA)
business for AU$740 million.
A net gain on sale was recorded
of NZ$214 million and net cash
was received of NZ$768 million.
For the financial year ended
30 June 2022, MEA was reported
as a discontinued operation. MEA
was part of the Meridian Group from
1 July 2021 to 31 January 2022, and
therefore the income, expenses and
cash flows disclosed below are for
this seven-month period.
The information below has been
re-presented in keeping with the
change in current period
presentation noted in S1.
Results of discontinued operation
2023
$M
Operating revenue
Operating expenses
Depreciation and amortisation
Net change in fair value of energy hedges
Finance costs
Net profit/(loss) from discontinued operations
before tax
Income tax expense
Net profit/(loss) from discontinued operations
after tax
Basic and diluted earnings per share (cents per share)
Net profit/(loss) from discontinued operations after tax
Gain on sale of MEA
Total net profit from discontinued operations
after tax
Cash flows from/(used in) discontinued operation
Net cash from/(used in) operating activities
Net cash from/(used in) investing activities
Net cash from/(used in) financing activities
Net cash flows of discontinued activity
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2022
$M
196
(172)
(6)
(17)
(2)
(1)
–
(1)
–
(1)
214
213
12
(9)
7
10
Assets and liabilities disposed of
At 31 January 2022
$M
Cash and cash equivalents
Trade receivables
Customer contract assets
Financial instruments (assets)
Other assets
Property, plant and equipment
Intangible assets
Deferred tax (asset)
Payables and accruals
Employee entitlements
Customer contract liabilities
Lease liabilities
Financial instruments (liability)
Deferred tax (liability)
Provisions
Total net assets disposed
25
33
11
45
15
574
6
35
(50)
(2)
(9)
(43)
(48)
(27)
(23)
542
As MEA was 100% owned by the Group, net income
relating to continuing operations and the discontinued
operation are fully attributable to the owners of the parent.
2 0 0
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 S
S3 Property, plant
and equipment
Within property, plant and equipment,
generation structures and plant
are carried at fair value for financial
reporting purposes. Revaluations are
performed with sufficient regularity
to ensure that carrying value does
not differ materially from that which
would be determined using fair
values at balance date.
During the current financial year,
valuations of Meridian’s generation
structures and plant assets were
undertaken twice, at 31 December 2022
and at 30 June 2023, to determine the
fair value of the assets at those dates.
The valuations resulted in increases of
$740 million and $371 million respectively,
giving a FY23 total increase of $1,111
million (2022: decrease of $55 million).
The rise in value is driven mainly by
increases in wholesale electricity price
assumptions, offset by higher interest
rates. Management calculates a valuation
on which the Board’s ultimate decision
is based. The valuation is set using
discounted cash flow (DCF) analysis
and New Zealand’s Aluminium Smelter
(NZAS) operating until 31 December 2024.
Refer to Note B1 Property, plant and
equipment for more information.
Meridian's Ōtautahi Christchurch office. ►
2 01
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Group financial statements:
Significant matters in the financial year
For the year ended 30 June 2023
In this section
This section sets out significant matters
that have impacted Meridian’s financial
performance and an explanation
of non-GAAP measures within the
notes to the financial statements.
Hydro inflows
Meridian’s lake storage levels lifted
significantly at the start of the financial
year, with the highest winter inflows
on record.
Late spring and summer saw much
drier conditions leading to decreasing
storage levels, particularly in the
Waiau lakes.
Storage then improved rapidly in
autumn due to a series of wet weather
events in the lower South Island.
We ended the financial year with
strong storage positions in both
the Waiau and Waitaki catchments.
Non-GAAP measures
EBITDAF
Energy margin
Meridian refers to non-GAAP financial
measures within these financial
statements and accompanying notes.
The limited use of non-GAAP measures
is intended to supplement GAAP
measures to provide readers with
further information to broaden their
understanding of Meridian’s financial
performance and position. They are
not a substitute for GAAP measures.
As these measures are not defined
by NZ GAAP, IFRS, or any other body
of accounting standards, Meridian’s
calculations may differ from similarly
titled measures presented by other
companies. The measures are described
further on this page, including note
references for reconciliations to
the financial statements.
Earnings before interest, tax,
depreciation, amortisation, unrealised
changes in fair value of hedges,
impairments and gains or losses on
sale of assets. This definition has been
updated this year to make clear that,
as intended, it excludes unrealised
changes in the fair value of hedges.
Segment performance note
EBITDAF is reported in Note A1
Segment performance, allowing the
evaluation of Meridian’s operating
performance without the non-cash
impacts of depreciation, amortisation,
unrealised fair value movements of
hedging instruments and other one-
off or infrequently occurring events
and the effects of Meridian’s capital
structure and tax position. This allows
the reader to compare operating
performance with that of other
electricity industry companies.
Energy margin provides a measure of
financial performance that, unlike total
revenue, accounts for variability within
the wholesale electricity market and the
broadly offsetting impact of wholesale
prices on the cost of Meridian’s retail
electricity purchases and revenue from
generation. Meridian uses the measure
of energy margin within its segmental
financial performance as outlined in
Note A1 Segment performance.
Net debt
Net debt is a metric commonly used
by investors as a measure of Meridian’s
indebtedness that takes account
of liquid financial assets. Meridian
uses this measure within its capital
management and this is outlined in
Note C1 Capital management.
2 0 2
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
A : Financial performance
In this section
This section explains the financial
performance of Meridian, and
provides additional information
about individual items in the
Income Statement, including:
a. accounting policies, judgements
and estimates that are relevant for
understanding items recognised
in the Income Statement; and
b. analysis of Meridian’s performance
for the year by reference to key
areas including: performance
by operating segment, revenue,
expenses and taxation.
A1 Segment performance
The Chief Executive (the chief
operating decision-maker) monitors
the operating performance of each
segment for the purpose of making
decisions on resource allocation
and strategic direction.
The Chief Executive considers the
business according to the nature of the
products and services and the location
of operations, as set out further on
this page.
New Zealand wholesale
• Generation of electricity and
its sale into the New Zealand
wholesale electricity market.
• Purchase of electricity from the
wholesale electricity market and
its sale to the NZ Retail segment
and to large industrial customers,
including NZAS representing the
equivalent of 36% (30 June 2022:
37%) of Meridian’s New Zealand
generation production.
• Development of renewable
electricity generation opportunities
in New Zealand.
New Zealand retail
• Retailing of electricity and
complementary products
through two brands (Meridian
and Powershop) in New Zealand.
• Electricity sold to residential,
business and industrial customers
on fixed-price variable volume
contracts is purchased from the
Wholesale segment at an average
annual fixed (transfer) price of
$104 per megawatt hour (MWh)
(2022: $93 per MWh). The transfer
price is set in a similar manner to
transactions with third parties.
• Electricity sold to business and
industrial customers on spot
(variable price) agreements is
purchased from the Wholesale
segment at prevailing wholesale
spot market prices.
• Agency margin from spot sales
is included within ‘Contracted
sales, net of distribution costs’.
• Meridian provides front-line
customer and back-office services
for Powershop Australia from
New Zealand-based offices. In
the prior period, revenue of
$5 million was recorded in ‘Other
revenue’ and is eliminated on
Group consolidation.
Australia
• Generation of electricity from
two wind farms, three hydro power
stations, and electricity acquisition
under power purchase agreements,
for sale into the Australian
wholesale electricity market.
• Retailing of electricity and gas,
mainly through the Powershop
brand in Australia.
• Development of renewable electricity
generation options in Australia.
As noted in the Significant Matters
section, Meridian sold the Australia
segment on 31 January 2022 and it is
presented as a discontinued operation.
Other and unallocated
• Other operations that are not
considered reportable segments,
including licensing of the Flux
-developed electricity retailing
platform.
• Activities and centrally based costs
that are not directly allocated to
other segments.
The financial performance of the
operating segments is assessed
using energy margin and EBITDAF
(a definition of these measures is
included within significant matters in
the financial year) before unallocated
central corporate expenses. Balance
sheet items are not reported to the
Chief Executive at an operating
segment level.
2 0 3
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 A
A1 Segment performance continued
NZ Wholesale
NZ Retail
Australia
Other and
Unallocated
Inter-segment and
discontinued operations
Total
Contracted sales, net of distribution costs and hedging
2023
$M
530
2022
$M
525
1,208
1,057
2023
$M
2022
$M
2023
$M
2022
$M
2023
$M
2022
$M
Cost to supply customers, net of hedging
(1,549)
(2,554)
(1,006)
(874)
Net cost of other hedges
Generation spot revenue, net of hedging
Inter-segment electricity sales
Virtual asset swap margins
Other market revenue/(costs)
Energy margin (see reconciliation on next page)
Other revenue
Energy transmission expenses
Hosting expenses
Electricity metering expenses
Gross margin
Employee expenses
Other operating expenses
EBITDAF
Depreciation and amortisation
Impairment of assets
(121)
1,020
1,065
(7)
(9)
929
3
(80)
–
–
852
(27)
(65)
760
148
1,757
965
2
(5)
838
2
(79)
–
–
761
(26)
(60)
675
–
–
–
–
1
–
–
–
–
1
203
184
16
–
–
(46)
173
(36)
(34)
103
14
–
–
(43)
155
(32)
(36)
87
Net change in fair value of energy hedges (see reconciliation on next page)
Finance costs
Interest income
Net change in fair value of treasury hedges
Net profit before tax from continuing operations
Income tax expense
Net profit after tax from continuing operations
Net profit from discontinued operation after tax
Net profit after tax
The Australia segment was sold on 31 January 2022 and is reported as a discontinued operation above.
2 0 4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
96
(82)
1
46
–
–
(1)
60
–
(3)
–
–
57
(10)
(19)
28
–
–
–
–
–
–
–
–
23
–
(3)
–
20
(56)
(38)
(74)
–
–
–
–
–
–
–
–
41
–
(2)
–
39
(42)
(32)
(35)
2023
$M
–
2022
$M
2023
$M
2022
$M
(96)
1,738
1,582
1,065
1,047
(1,490)
(2,463)
–
–
(1)
(46)
(121)
1,020
148
1,757
(1,065)
(965)
–
–
–
(13)
–
–
–
–
1
(60)
(30)
3
–
–
–
(7)
(8)
–
2
(4)
1,132
1,022
29
(80)
(3)
(46)
27
(79)
(2)
(43)
925
(100)
(116)
709
(293)
(2)
145
(73)
3
136
625
(174)
451
213
664
(13)
(87)
1,032
–
7
(6)
10
31
(46)
(119)
(130)
783
(294)
(10)
(333)
(55)
11
24
126
(31)
95
–
95
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 A
A1 Segment performance continued
Reconciliation of energy margin
Energy sales to customers
Generation revenue
Energy expenses
Energy distribution expenses
Realised energy hedges (see below)
Energy margin
Reconciliation of EBITDAF
Operating income
Operating expenses
Realised energy hedges (see below)
EBITDAF
Note
A2
A2
A3
A3
Note
A2
A3
Reconciliation of net change in fair value of energy hedges
Realised energy hedges shown within energy margin (see above)
Unrealised changes in the fair value of energy hedges (as noted on previous page)
Net change in fair value of energy hedges, per the Income Statement
2023
$M
2,140
1,053
(1,331)
(688)
(42)
1,132
2022
$M
1,990
1,759
(2,195)
(653)
121
1,022
2023
$M
2022
$M
3,222
3,776
(2,397)
(3,188)
(42)
783
2023
$M
(42)
(333)
(375)
121
709
2022
$M
121
145
266
Kurow Island restoration project funded by our Power Up community fund. ►
2 0 5
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023 A
A2 Income
Operating revenue
Energy sales to customers
Generation revenue
Energy-related services revenue
Other revenue
Total operating revenue
Total revenue by geographic area
New Zealand
United Kingdom
Total operating revenue
Interest income
Operating revenue
Energy sales to customers
Revenue received or receivable from
residential, business and industrial
customers. This revenue is influenced
by customer contract sales prices
and their demand for electricity.
i
2023
$M
2,140
1,053
10
19
2022
$M
1,990
1,759
10
17
3,222
3,776
2023
$M
2022
$M
3,222
3,768
–
8
3,222
3,776
2023
$M
11
2022
$M
3
Generation revenue
Revenue received from electricity
generated and sold into wholesale
markets.
This revenue is influenced by
the quantity of generation and the
wholesale spot prices. It is recognised
at the time of generation.
Key judgements and estimates – Revenue
Electricity consumption
Supply contract with NZAS
Meridian exercises judgement in
estimating retail electricity sales,
where customer electricity meters
are unread at balance date. These
estimates of customer electricity
usage in the unread period are
based on the customers’ historical
consumption patterns.
Revenue is recognised at the time of
supply and customer consumption.
Elements of the sale price such
as discounts and credits given to
customers and any incremental
costs incurred obtaining or retaining
a customer contract are deferred
to customer contract assets on
the Balance Sheet on a portfolio
basis and released to the Income
Statement over the contract tenure.
The agreement with NZAS has
been recognised in these financial
statements in a manner consistent
with fixed price supply agreements
with other industrial customers.
Revenue is recognised as electricity
sales revenue in the Income
Statement and the estimated future
cash flows are included in the fair
value of generation structures and
plant assets on the Balance Sheet.
Discounts and payment terms
Where a discount is offered,
revenue is initally recognised net
of estimated discount based on
accumulated experience used to
estimate the amount of discounts
taken by customers.
There are no significant differences
between the payment terms and
this policy.
2 0 6
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 AA
A3 Expenses
Operating expenses
Energy expenses
Energy distribution expenses
Energy transmission expenses
Hosting expenses
Employee expenses
Energy metering expenses
Other expenses
Total operating expenses
Depreciation and amortisation
Depreciation
Amortisation of intangibles
Total depreciation and amortisation
Finance costs
Interest on borrowings
Interest on electricity option premiums
Interest on lease liabilities
Less: Capitalised interest
Total finance costs
Impairment and write down of assets
Impairment of property, plant and equipment
Write down of inventory to net realisable value
2023
$M
1,331
688
80
3
119
46
130
2022
$M
2,195
653
79
2
100
43
116
2,397
3,188
2023
$M
266
28
294
2023
$M
67
1
2
(15)
55
2023
$M
8
2
2022
$M
271
22
293
2022
$M
76
1
2
(6)
73
2022
$M
2
–
Note
B1
B2
Note
C9
Note
B1
Operating expenses
Energy expenses
The cost of:
• energy purchased from wholesale
markets to supply customers; and
•
related charges and services.
Energy expenses are influenced
by quantity and timing of customer
consumption and wholesale
spot prices.
Energy distribution expenses
The cost of distribution companies
transporting energy between where
energy is transmitted/stored and
customers’ properties.
Energy transmission expenses
Meridian’s share of the cost of the
high voltage direct current (HVDC)
link between the North and South
Islands of New Zealand and the cost of
connecting Meridian’s generation sites
to the national grid by grid providers.
Energy metering expenses
The cost of electricity meters, meter
reading and data gathering of retail
customer electricity consumption in
New Zealand.
Employee expenses
Provisions are made for benefits
owing to employees in respect of
wages and salaries, annual leave, long
service leave and employee incentives
for services rendered. Provisions are
recognised when it is probable they
will be settled and can be measured
reliably. They are carried at the
remuneration rate expected to
apply at the time of settlement.
Contributions to defined
contribution plans were $5 million
in 2023 (2022: $4 million).
Finance costs – capitalised interest
During the financial year, Meridian
capitalised interest costs relating to
the build of development sites.
The average rate used to determine
the amount of borrowing costs eligible
for capitalisation during the year was
5.36% (2022: 5.01%).
Impairment of non-financial assets
Meridian reviews the recoverable
amount of its tangible and intangible
assets at each balance date. They are
grouped into cash-generating units
with separately identifiable cash flows.
The recoverable amount is the higher
of an asset’s fair value less costs to
sell, and present value of future cash
flows expected to be generated by the
assets (also known as value in use). If
the carrying value of an asset exceeds
the recoverable amount, an impairment
expense is recognised in the income
statement. For assets that are revalued
refer to Note B1 Property, plant and
equipment for specific treatment.
2 07
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 A
A4 Taxation
Tax expense
Current income tax expense
Other permanent differences
Adjustments to tax of prior years
Total current tax expense
Deferred tax
Adjustments to tax of prior years
Total tax
Reconciliation to profit before tax
Profit before tax from continuing operations
Income tax at applicable rates
Expenditure not deductible for tax
Income tax (over)/under provided in prior year
Other
Tax expense
Tax on discontinued operation
Current tax expense
Tax expense components are current
income tax and deferred tax.
Current income tax expense is the
income tax assessed on taxable profit
for the year. Taxable profit differs
from profit before tax reported in the
Income Statement as it excludes items
of income and expense that are taxable
or deductible in other years, and also
excludes items that will never be taxable
or deductible. Meridian’s liability for
current tax is calculated using tax rates
enacted at balance date, being 28%
(2022: 28%).
2023
$M
167
4
(3)
168
(131)
(6)
31
126
35
–
(3)
(1)
31
–
2022
$M
140
–
–
140
36
(2)
174
625
173
3
–
(2)
174
–
2 0 8
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 A
A4 Taxation continued
Deferred tax assets and liabilities
Balance at beginning of year
Temporary differences in income statement:
Depreciation and amortisation
Term payables
Financial instruments
Customer contract assets
Other – payables and receivables
Temporary differences in other comprehensive income:
Revaluation reserve movements
Effect of sale of subsidiaries
Other
Balance at end of year
Made up of:
Property, plant and equipment
Term payables
Financial instruments
Customer contract assets
Other – payables and receivables
Deferred tax liability
Total deferred tax
2023
$M
2022
$M
1,932
1,905
(59)
5
(86)
(1)
4
(137)
311
–
(3)
(50)
6
76
–
5
37
(15)
5
–
2,103
1,932
Deferred tax assets and liabilities
Offsetting deferred tax balances
Deferred tax assets and liabilities
are offset only if there are legally
enforceable rights to set off current
tax assets against current tax liabilities
and when they relate to the same
taxable entity and taxation authority.
Deferred tax is income tax which is
expected to be payable or recoverable
in the future as a result of the
unwinding of temporary differences.
These arise from differences in the
recognition of assets and liabilities
for financial reporting and from the
filing of income tax returns. Deferred
tax is recognised on all temporary
differences, other than those arising:
•
•
from goodwill; and
from the initial recognition of assets
and liabilities in a transaction (other
than in a business combination) that
affects neither the accounting nor
taxable profit or loss.
2,084
1,832
(12)
19
4
8
2,103
2,103
(11)
103
4
4
1,932
1,932
The majority of Meridian’s deferred
tax balance is made up of temporary
differences on the revaluation of
property, plant and equipment.
This balance will only reverse if the
fair value of these assets declines
back to their original historical cost.
Deferred tax is calculated at the tax
rates that are expected to apply to the
year when the liability is settled or the
asset realised, based on tax rates and
tax laws that have been enacted or
substantively enacted at balance date.
2 0 9
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 B : Assets used to generate and sell electricity
In this section
B1 Property, plant and equipment
This section shows the assets Meridian
uses in the production and sale of
electricity to generate operating
revenue. In this section of the notes
there is information about:
$M
Cost or fair value
Less accumulated depreciation
Net book value at 30 June 2021
a. property, plant and equipment;
Additions
and
b. intangible assets.
Transfers – work in progress
Adjustment of Right of Use lease assets
Disposals
Impairments
Generation structures and plant revaluations:
Increase (decrease) taken to revaluation reserve
Depreciation expense35
Net book value at 30 June 2022
Cost or fair value
Less accumulated depreciation
Net book value at 30 June 2022
Additions
Transfers – work in progress
Adjustment of Right of Use lease assets
Disposals
Impairments
Generation structures and plant revaluation:
Increase (decrease) taken to revaluation reserve
Depreciation expense
Net book value at 30 June 2023
Cost or fair value
Less accumulated depreciation36
Net book value at 30 June 2023
Generation
structures and
plant at fair value
Land and
buildings
at cost
Other plant
and equipment
at cost
Right of
Use lease
assets
Work in
progress
at cost
8,314
(17)
8,297
–
11
–
(522)
–
(55)
(259)
7,472
7,472
–
7,472
–
5
–
–
–
1,111
(254)
8,334
8,334
–
8,334
21
(6)
15
–
36
–
(1)
–
–
(1)
49
56
(7)
49
–
1
–
–
–
–
(1)
49
55
(6)
49
143
(104)
39
–
16
–
(1)
–
–
(11)
43
148
(105)
43
–
10
–
(1)
(3)
–
(9)
40
139
(99)
40
109
(21)
88
–
–
(8)
(38)
(1)
–
(5)
36
48
(12)
36
–
–
(1)
–
(9)
–
(2)
24
35
(11)
24
162
(3)
159
148
(63)
–
(12)
(1)
–
(1)
230
232
(2)
230
328
(16)
–
–
–
–
–
542
544
(2)
542
Total
8,749
(151)
8,598
148
–
(8)
(574)
(2)
(55)
(277)
7,830
7,956
(126)
7,830
328
–
(1)
(1)
(12)
1,111
(266)
8,989
9,107
(118)
8,989
At 30 June 2023, had the generation structures and plant been carried at historical cost less accumulated depreciation and
accumulated impairment losses, their carrying amount would have been approximately $1.2 billion (2022: $1.4 billion).
2 1 0
35 Depreciation expense does not match the Income Statement, due to the re-presenting of the Income Statement for the MEA discontinued operation.
36
Includes the reversal of accumulated depreciation on generation structures and plant at revaluation date.
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 B
B1 Property, plant and equipment continued
Recognition and measurement
Generation structures and plant
assets (including land and buildings)
are held on the Balance Sheet at their
fair value at the date of revaluation,
less any subsequent depreciation and
impairment losses. All other property,
plant and equipment are stated
at historical cost less accumulated
depreciation and any accumulated
impairment losses.
Fair value and revaluation of
generation structures and plant
Revaluations are performed with
sufficient regularity to ensure that
the carrying amount does not differ
materially from that which would
be determined using fair values at
balance date.
Meridian uses DCF analysis to establish
a valuation range on which the Board’s
ultimate valuation decision is based.
Any increase arising on revaluation
is credited to the revaluation reserve,
except to the extent that it reverses a
revaluation decrease for the same asset
previously recognised in the Income
Statement. In that case the increase is
credited to the Income Statement to
the extent of the decrease previously
charged. A decrease in carrying amount
arising on revaluation is charged to the
Income Statement to the extent that
it exceeds the balance, if any, held in
the revaluation reserve relating to a
previous revaluation of that asset.
Accumulated depreciation at
revaluation date is eliminated against
the gross carrying amount so that the
carrying amount after revaluation
represents the revalued amount.
Subsequent additions to generation
structures and plant assets are recorded
at cost, which is considered fair value,
including costs directly attributable to
bringing the asset to the location and
condition necessary for its intended
purpose, and financing costs where
appropriate.
During the year, Meridian performed
valuation assessments of its generation
structures and plant assets at
31 December 2022 and 30 June 2023.
The revaluations resulted in a net
increase of $1,111 million (2022: decrease
of ($55) million) in the carrying value
of our generation structures and plant
assets. The impact of the revaluation
was recognised as an increase of $1,111
million (2022: decrease of ($55) million)
in the revaluation reserve.
As a consequence of the revaluation,
accumulated depreciation on most
generation assets is reset to nil. There
was no depreciation impact of this
revaluation in the Income Statement.
West Wind Farm Te Whanganui-a-Tara Wellington at dusk. ►
2 11
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
B
B1 Property, plant and equipment continued
B1 Property, plant and equipment continued
Key judgements and estimates – Generation structures and plant valuation techniques and key inputs
The Board uses its judgement to
decide on the appropriateness of key
valuation techniques and inputs for fair
value measurement. Judgement is also
used in determining the estimated
remaining useful lives of assets.
As the valuation of generation
structures and plant utilises some
unobservable (non-market data)
inputs, it continues to be classified
as level 3 under Meridian’s fair
value hierarchy defined in Note D1
Financial risk management.
As discussed on the previous
page, Meridian uses DCF analysis
to establish a valuation range.
The DCF methodology involves
calculating the present value of
future cash flows expected to be
produced over a projection period,
including forecast revenues, forecast
future generation output and
NZAS continuing to operate until
31 December 2024. If NZAS were to
operate after 31 December 2024, this
may have a significant impact on the
fair value of Meridian’s generation
structures and plant assets.
The DCF valuation was prepared
using a 20-year time period in line
with New Zealand Treasury forward
inflation curve.
Meridian has a mature modelling
framework which is a forward looking,
long-term analysis of the fundamentals
underpinning the New Zealand
wholesale electricity market.
This modelling framework includes
forward-looking climate change impacts,
particularly affecting hydrological
seasonality and variability, and climate
change-induced demand changes.
Climate change impacts include
transitional and physical variables
that need to be captured in the
context of our business – for example,
changes in the frequency/intensity of
storm events, precipitation, carbon
pricing and policy intervention levels
in New Zealand and abroad.
The table below describes the key inputs and their sensitivity to changes.
2023
2022
Key input to
measure fair value
Description
Range of
unobservable inputs
Future NZ wholesale
The price received for NZ generation
$43MWh to $150MWh
electricity prices
New Zealand
generation volume
between FY24 and FY43
(in real terms)
Annual generation production
13,304 GWh p.a. to
13,804 GWh p.a.
Operating expenditure
Meridian’s cost of operations
$154M in FY24, $163M in FY25
(excluding electricity purchase
costs or transmission charges)
(in real terms) and inflated at
appropriate escalation rates
from FY26 onward
Sensitivity
+ $3MWh
- $3MWh
+ 250GWh
- 250GWh
+ $10M
- $10M
Impact on
valuation
Range of
unobservable inputs
$456M
$45MWh to $117MWh
($456M)
between FY23 and FY42
(in real terms)
$210M
13,413 GWh p.a. to
($210M)
13,964 GWh p.a.
($116M)
$134M in FY23, $141M in FY24
$116M
(in real terms) and inflated at
appropriate escalation rates
from FY25 onward
Sensitivity
+ $3MWh
- $3MWh
+ 250GWh
- 250GWh
+ $10M
- $10M
Impact on
valuation
$494M
($494M)
$227M
($227M)
($128M)
$128M
Weighted Average
The discount rate considers the time
8.40%
Cost of Capital (WACC)
value of money and relative risk of
+ 0.5%
- 0.5%
($585M)
7.74%
$683M
+ 0.5%
- 0.5%
($571M)
$680M
achieving the cash flow forecast
Sensitivities show the movement in fair value as a result of a change in each input (keeping all other inputs constant).
2 1 2
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023
3
2
0
2
T
R
O
P
E
R
D
E
T
A
R
G
E
T
N
I
N
A
I
D
I
R
E
M
B B1 Property, plant and equipment continued
Depreciation
Disposals or retirement
The gain or loss arising on the disposal
or retirement of an item of property,
plant and equipment is determined
as the difference between the sale
proceeds and the carrying amount
of the asset and is recognised in
the Income Statement. Any balance
attributable to the disposed asset
in the asset revaluation reserve is
transferred to retained earnings.
Depreciation of property, plant
and equipment assets, other than
freehold land, is calculated on a
straight-line basis. This allocates
the cost or fairvalue amount of an
asset, less any residual value, over
its estimated remaining useful life.
Useful lives
Meridian uses its judgement in
determining the remaining useful
lives and residual value of assets,
which are:
• generation structures and plant –
up to 80 years;
• buildings – up to 67 years;
• other plant and equipment –
up to 20 years; and
• Right of Use lease assets –
up to 26 years.
The residual value and useful lives
are reviewed, and, if appropriate,
adjusted at each balance date.
Benmore Power Station, Otematata. ►
2 1 3
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023
B
B2 Intangible assets
$M
Cost or fair value
Less accumulated amortisation
Net book value at 30 June 2021
Additions
Amortisation expenses
Disposals
Net book value at 30 June 2022
Cost or fair value
Less accumulated amortisation
Net book value at 30 June 2022
Additions
Disposals
Impairment
Amortisation expenses
Net book value at 30 June 2023
Cost or fair value
Less accumulated amortisation
Net book value at 30 June 2023
2 14
Goodwill
Software
5
–
5
–
–
(5)
–
–
–
–
–
–
–
–
–
–
–
–
220
(141)
79
29
(22)
(1)
85
224
(139)
85
18
–
(2)
(28)
73
236
(163)
73
Total
225
(141)
84
29
(22)
(6)
85
224
(139)
85
18
–
(2)
(28)
73
236
(163)
73
Software
Goodwill
Goodwill represents the excess of
the cost of a business acquisition
over the fair value of the identifiable
assets and liabilities at the date of
acquisition. Goodwill is assessed as
having an indefinite useful life and is
not amortised. Instead, it is subject to
impairment testing at each reporting
date or whenever there are indications
of impairment. Goodwill has been
allocated to the following business units:
$M
2023
2022
Rangoon Energy
Park Pty Ltd
Wandsworth
Wind Farm Pty Ltd
–
–
–
–
–
–
The goodwill related to two wind
farm development sites in Australia.
The goodwill was derecognised during
the prior financial year as part of the
sale of MEA.
Acquired computer software licenses
(that are not considered an integral part
of related hardware) are capitalised
on the basis of the costs incurred to
acquire and bring to use the specific
software. Additionally, costs directly
associated with the production of
identifiable and unique software
products that will generate economic
benefits beyond one year are also
recognised as intangible assets.
All these costs are amortised over their
useful lives on a straight-line basis.
Costs associated with maintaining
computer software programs are
recognised as an expense as incurred.
Useful lives
Meridian uses its judgement in
determining the remaining useful
lives and residual value of intangible
assets, which are:
• electricity retail platform
– up to five years;
• generation control – up to 10 years;
and
• other software – up to three years.
These are reviewed, and, if appropriate,
adjusted at each balance date.
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C : Managing funding
In this section
This section explains how Meridian
manages its capital structure and
working capital, the various funding
sources and how dividends are returned
to shareholders. In this section of the
notes there is information about:
a. equity and dividends;
b. net debt;
c. receivables and payables; and
d. leases and commitments.
C1 Capital management
Capital risk management objectives
Meridian’s objective when managing
capital is to provide appropriate returns
to shareholders whilst maintaining a
capital structure that safeguards its
ability to remain a going concern and
optimise the cost of capital.
Capital is defined as the combination
of shareholders’ equity, reserves and
net debt.
Meridian manages its capital through
various means, including:
• adjusting the amount of
dividends paid to shareholders;
raising or returning capital; and
raising or repaying debt.
•
•
Meridian regularly monitors its capital
requirements using various measures
which consider debt facility financial
covenants and credit ratings. The key
measures are net debt to EBITDAF and
interest cover. The principal external
measure is Meridian’s credit rating
from Standard & Poor’s.
Meridian is in full compliance with
debt facility financial covenants.
Share capital
Retained earnings
Other reserves
Drawn borrowings
Lease liabilities payable
Less: cash and cash equivalents
Net capital
Net debt to EBITDAF
Drawn borrowings
Lease liabilities payable
Less: cash and cash equivalents
Add back: restricted cash
Net debt (A)
EBITDAF (B)
Net debt to EBITDAF (times) (A/B)
EBITDAF Interest cover
EBITDAF (B)
Interest on borrowings
Interest on lease liabilities
Interest (C)
EBITDAF interest cover (times) (B/C)
Note
C2
C7
C9
C5
Note
C7
C9
C5
C5
Note
A3
A3
2023
$M
1,700
2022
$M
1,671
(1,600)
(1,242)
5,887
5,987
1,221
27
(212)
1,036
7,023
5,094
5,523
1,126
41
(363)
804
6,327
2023
$M
2022
$M
1,221
27
(212)
196
1,232
783
1.6
1,126
41
(363)
43
847
709
1.2
2023
$M
2022
$M
783
67
2
69
11.3
709
76
2
78
9.1
Standard & Poor’s rating
BBB+
BBB+
2 1 5
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C2 Share capital
Share capital
Shares issued
Shares
2023
$M
Shares
2022
$M
2,584,734,122
1,708
2,578,869,011
1,678
Treasury shares held
(1,565,008)
(8)
(1,304,226)
(7)
Share capital
2,583,169,114
1,700
2,577,564,785
1,671
All shares issued are fully paid and have equal voting rights. All shares participate
equally in any dividend distribution or any surplus on the winding up of the company.
The movement in shares issued relates to the dividend reinvestment plan. Refer to
Note C4 Dividends for further information.
The movement in treasury shares relates to the purchase and issue of shares to
participants in the long-term equity settled incentive plan for New Zealand-based
senior executives (Refer to Note F1 Share-based payments) and for hedging of
the Long-Term Incentive (LTI) scheme.
C3 Earnings per share
Basic and diluted earnings per share (EPS)
Net profit after tax from continuing operations
Net profit after tax attributed to the shareholders of the parent company
2023
$95M
$95M
2022
$451M
$664M
Weighted average number of shares used in the calculation of EPS
2,581,801,567
2,570,934,506
Basic and diluted EPS from continuing operations (cents per share)
Basic and diluted EPS (cents per share)
3.7
3.7
17.5
25.8
2 1 6
◄ Whangārei Heads at sunset, near Ruakākā.
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023 C
C4 Dividends
Dividends declared and paid
Interim ordinary dividend 2023: 6.00cps (cents per share) (2022: 5.85cps)
Final ordinary dividend 2022: 11.55cps (2021: 11.20cps)
Total dividend expense
Dividends declared and not recognised as a liability
2023
$M
155
298
453
2022
$M
150
287
437
Final ordinary dividend 2023: 11.90cps (2022:11.55cps)
307
298
Imputation credit balance
Imputation credits available for future use at 30 June
71
51
Dividend policy
Dividend reinvestment plan
Meridian’s dividend policy considers
free cash flow, working capital
requirements, the medium-term
investment programme, maintaining
a BBB+ credit rating and risks from
short and medium-term economic,
market and hydrology conditions.
Meridian operates a dividend
reinvestment plan under which
shareholders can elect to receive
dividends in additional shares
rather than cash.
For the October 2022 final dividend
payment, new shares were issued
at the prevailing market price of
Meridian shares around the time of
issue. Meridian investors were issued
3,864,321 new shares with a value of
$19 million (2022: 13,400,114 shares
with a value of $65 million).
Subsequent event –
dividend declared
On 28 August 2023 the Board
declared a partially imputed
final ordinary dividend of
11.9 cents per share.
For the March 2023 interim dividend
payment, new shares were issued
at the prevailing market price of
Meridian shares around the time of
issue. Meridian investors were issued
2,000,790 new shares with a value
of $11 million (2022: 2,468,897
shares with a value of $13 million).
Shares issued in lieu of cash are
excluded from dividends paid in
the Statement of Cash Flows.
Imputation credit balance
Imputation credits allow Meridian to
pass on to its shareholders the benefit
of the New Zealand income tax it has
paid by attaching imputation credits
to the dividends it pays, reducing the
shareholders’ net tax obligations.
The imputation credits available for
future use reflect the balance at the end
of the period 30 June 2023. It does not
recognise any tax payments between
balance date and 28 August 2023.
2 17
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C5 Cash and cash equivalents
Cash and cash equivalents
Current account
Short term deposits
Money market account
Cash and cash equivalents
2023
$M
212
–
–
212
2022
$M
71
250
42
363
Cash and cash equivalents are made up of cash on hand, on-demand deposits
and other short-term, highly liquid investments that are readily convertible to a
known amount of cash and are not subject to a significant risk of change in value.
Restricted cash
Meridian trades electricity hedges on the ASX using Macquarie as a broker.
As a result, a proportion of the funds it holds on deposit are pledged as margin
which varies depending on market movements and contracts held.
At 30 June 2023, this collateral was $196 million (30 June 2022: $43 million).
All other cash and cash equivalent balances are available for use.
Reconciliation of net profit after tax
to cash flows from operating activities
Net profit after tax
Adjustments for operating activities’ non-cash items:
Depreciation and amortisation
Movement in deferred tax
Net change in fair value of financial instruments
Electricity option premiums
Other non-cash items in working capital
Share-based payments
Items classified as investing activities:
Gain on sale of subsidiaries
Changes in working capital items:
(Increase)/decrease in accounts receivable
(Increase)/decrease in customer contract assets
(Increase)/decrease in other assets
Increase/(decrease) in payables and accruals/employee entitlements
Increase/(decrease) in customer contract liabilities
Increase/(decrease) in current tax payable
Working capital items in financing activities
Cash flow from operating activities
2023
$M
95
294
(137)
308
(19)
(23)
1
424
2022
$M
664
300
37
(260)
(21)
(11)
1
46
–
(214)
65
3
2
(95)
2
15
(2)
(10)
509
75
9
11
(114)
(10)
(5)
(1)
(35)
461
2 1 8
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C6 Trade receivables
Trade receivables
Accrued receivables
Current billed
Past due 1 to 30 days
Past due 31 to 60 days
Past due 61 to 90 days
Past due greater than 90 days
Less: credit loss allowance
Total trade receivables
Accounts receivable past due less credit loss allowance
Movement in provision for credit loss allowance
Opening provision
Provision released (created) in the year
Provision used in the year
Closing provision for credit loss allowance
2023
$M
303
16
15
2
1
1
(4)
334
15
(8)
3
1
(4)
2022
$M
364
19
19
4
1
–
(8)
399
16
(9)
(1)
2
(8)
Trade receivables,
measurement and recognition
Trade receivables are measured on
initial recognition at fair value, and are
subsequently carried at amortised cost.
The overdue amounts are largely related
to energy sales to retail customers.
Trade receivables written off during
the year were $1 million (30 June 2022:
$2 million).
Receivables are written off at the point
where Meridian believe there is no
reasonable expectation of recovery,
which is typically a combination of an
overdue amount, no communication
or response from the debtor, and no
payments received. Receivables written
off are handed to collection agencies
for enforcement.
Credit losses
The allowance for credit losses are an
estimate of the Group’s expected credit
losses over the lifetime of the current
amounts receivable. Or rather, it is the
difference between the face value of
trade receivables and the future cash
flows we expect to receive. Additions
to the provision are recognised in the
Income Statement.
We estimate collective future cash
flows by considering customer credit
history, historical recovery performance
and trends, through which we build
default matrices that apply a probability
of default given the ageing of debtors.
Forward-looking employment statistics
are also monitored, with a large rise
in forecast unemployment acting
as a trigger for us to reconsider the
probability rates in our matrices.
2 1 9
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C7 Borrowings
$M
Current borrowings
Unsecured borrowings
Total current borrowings
Non-current borrowings
Unsecured borrowings
Unsecured borrowings
Total non-current borrowings
Total borrowings
Currency
borrowed in
Drawn facility
amount
Transaction
costs paid
Fair value
adjustment
Carrying
amount
Drawn facility
amount
Transaction
costs paid
Fair value
adjustment
Carrying
amount
2023
2022
NZD
NZD
USD
215
215
420
586
1,006
1,221
(1)
(1)
–
(1)
(1)
(2)
–
–
–
17
17
17
214
214
420
602
1,022
1,236
160
160
380
586
966
1,126
(1)
(1)
–
(1)
(1)
(2)
–
–
–
39
39
39
159
159
380
624
1,004
1,163
Borrowings, measurement and recognition
Security
Borrowings are recognised initially
at the fair value of the drawn facility
amount (net of transaction costs paid)
and are subsequently held at amortised
cost using the effective interest method.
Any borrowings which have been
designated as hedged items (USD
borrowings) are carried at amortised
cost plus a fair value adjustment under
hedge accounting requirements. Refer
to Note D1 Hedge accounting section
for further information. Any borrowings
denominated in foreign currencies are
retranslated to the functional currency
at each reporting date. Any retranslation
effect is included in the ‘Fair value
adjustment’ column in the table,
along with any amounts relating to
fair value hedge adjustments.
Meridian uses cross-currency interest
rate swap (CCIRS) hedge contracts
to manage its exposure to interest
rates and borrowings sourced in
currencies different to that of the
borrowing entity’s functional currency.
More information on Meridian’s risk
management and hedge accounting
practices can be found in Section D
Financial instruments used to
manage risk.
Meridian borrows under a negative pledge arrangement, which does not permit
it to grant any security interest over its assets, unless it is an exception permitted
within the negative pledge.
Fair value of items held at amortised cost
Retail bonds
Unsecured term loan (EKF facility)
2023
$M
Carrying
value
550
30
2023
$M
Fair
value
543
31
2022
$M
Carrying
value
500
40
2022
$M
Fair
value
497
41
Within term borrowings there are
longer-dated instruments which are
not in hedge accounting relationships.
The carrying values and estimated fair
values of these instruments are noted
in the table above.
value hierarchy. The retail bonds are
listed instruments; however, a lack
of liquidity on the NZX precludes
them from being classified as Level 1
(a definition of hierarchy levels is included
in Note D1 Financial instruments).
Fair value is calculated using a
discounted cash flow calculation
and the resultant values would be
classified as Level 2 within the fair
Carrying value approximates fair
value for all other instruments
within term borrowings.
2 2 0
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C7 Borrowings continued
Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes.
2023
$M
Unsecured borrowings – NZD
Unsecured borrowings – USD
Lease liabilities
Total
$M
Unsecured borrowings – NZD
Unsecured borrowings – USD
Unsecured borrowings – AUD
Lease liabilities
Total
Sources of funding ($M)
Bank facilities
New Zealand bank facilities37
EKF funding38
Total bank facilities
Other sources of borrowing
Retail bonds39
Fixed rate bonds40
Commercial paper41
Total other sources of borrowing
Total sources of funding
Balance at
30 June 2022
Term
borrowings
drawn
Term
borrowings
repaid
Valuation
adjustments
Foreign
exchange
Transaction
costs paid
& accrued
Lease
liabilities
recognised
Lease
liabilities
paid
Lease
derecognition
MEA sale
Unwind of
discounting
Balance at
30 June 2023
539
624
41
255
(160)
–
–
–
–
1,204
255
(160)
–
(34)
–
(34)
–
12
–
12
–
–
(2)
(2)
2022
–
–
–
–
–
–
(3)
(3)
–
–
(11)
(11)
–
–
–
–
–
–
2
2
634
602
27
1,263
Balance at
1 July 2021
Term
borrowings
drawn
Term
borrowings
repaid
Valuation
adjustments
Foreign
exchange
Transaction
costs paid
& accrued
Lease
liabilities
recognised
Lease
liabilities
paid
Lease
derecognition
MEA sale
Unwind of
discounting
Balance at
30 June 2022
984
692
–
97
1,773
122
31
57
–
210
(567)
(60)
(58)
–
(685)
–
(78)
–
–
(78)
–
39
1
–
40
–
–
–
–
–
–
–
–
–
–
–
–
–
(7)
(7)
–
–
–
(8)
(8)
–
–
–
(43)
(43)
–
–
–
2
2
539
624
–
41
1,204
2023
2022
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
NZD
NZD
NZD
USD
NZD
550
30
580
550
586
40
1,176
1,756
15
30
45
550
586
40
1,176
1,221
535
–
535
–
–
–
–
535
550
40
590
500
586
–
1,086
1,676
–
40
40
500
586
–
1,086
1,126
550
–
550
–
–
–
–
550
37 Facilities bear interest at the relevant market
floating rate plus a margin – unsecured NZD
borrowing.
38 EKF facility is an unsecured amortising term
loan, provided by the official export credit
agency of Denmark, for the construction of
Te Uku wind farm – unsecured NZD borrowing.
39 Retail bonds are senior unsecured retail
bonds bearing interest rates of 4.21%, 4.88%
and 5.91% (2022: 4.53%, 4.88% and 4.21% ) –
unsecured NZD borrowing.
40 USD fixed rate bonds are unsecured fixed
rate bonds issued in the United States Private
Placement Market – unsecured USD borrowing.
41 NZD commercial paper comprises senior
unsecured short-term debt obligations paying
a fixed rate of return over a set period of time –
unsecured NZD borrowing.
37 Facilities bear interest at the relevant market floating rate plus a margin – unsecured NZD borrowing.
38 EKF facility is an unsecured amortising term loan, provided by the official export credit agency of Denmark, for the construction of
Te Uku wind farm – unsecured NZD borrowing.
39 Retail bonds are senior unsecured retail
bonds bearing interest rates of 4.21%, 4.88% and 5.91% (2022: 4.53%, 4.88% and 4.21% ) – unsecured NZD borrowing.
40 USD fixed rate bonds are unsecured fixed rate bonds issued in the United States Private Placement Market – unsecured USD borrowing
41 NZD commercial paper comprises senior unsecured short-term debt obligations paying a fixed rate of return over a set period of time.
2 2 1
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C8 Green financing
Green Debt Instruments under Meridian’s Green Finance Programme
Green Debt allocated to the Hydro Pool42
30 June 2023
30 June 2022
Type ($M)
USPP Series 2014-1 Tranche B43
USPP Series 2019-1 Tranche A43
USPP Series 2019-1 Tranche B43
USPP Series 2019-1 Tranche C43
Total Fixed Rate Bonds
New Zealand Bank Facilities44
Commercial Paper45
Total Green Debt allocated to the Hydro Pool
CUSIP/NZX Code
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Facility
amount
Drawn
facility
amount
Q5995*AB4
Q5995#AE4
Q5995#AF1
Q5995#AG9
USD
USD
USD
USD
NZD
NZD
147
183
183
73
586
550
40
1,176
147
183
183
73
586
15
40
641
147
183
183
73
586
550
–
147
183
183
73
586
–
–
1,136
586
Green Debt allocated to the Wind Pool46
30 June 2023
30 June 2022
Type ($M)
Retail Bond (Mar-23)
Retail Bond (Mar-24)
Retail Bond (Mar-25)
Retail Bond (Sep-28)
Total Domestic Bonds
EKF Amortising Facility
Total Green Debt allocated to the Wind Pool
Total Green Debt
CUSIP/NZX Code
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Facility
amount
Drawn
facility
amount
MEL030
MEL040
MEL050
MEL060
NZD
NZD
NZD
NZD
NZD
–
150
200
200
550
30
580
1,756
–
150
200
200
550
30
580
1,221
150
150
200
–
500
40
540
1,676
150
150
200
–
500
40
540
1,126
Further information on the Green Finance Programme, including the Programme framework document, opinions from
DNV Business Assurance Australia Pty Ltd (DNV), Climate Bonds Standard (CBS) Certification and Green Asset and Debt
registers are available on Meridian’s website at meridianenergy.co.nz/about-us/investors/reports/green-finance.
To recognise Meridian’s commitment, leadership and investment in renewable energy, Meridian has designed a Green Finance
Programme which covers both existing and future issuances of debt instruments (Programme).
42 Verified as meeting the criteria established for Meridian by DNV which align with the stated definition of Green Bonds and Loans within the Green Bond/Loan Principles.
43 United States private placement (USPP) Notes are included as the NZD equivalent under the cross-currency interest rate swaps related to the Issue.
During the prior period, the $100m USPP Series 2014-1 Tranche B bond was novated from Australia-based Meridian Finco to New Zealand-based Meridian
Energy Limited prior to the sale of the MEA operations. On novation, the associated USD/AUD CCIRS was replaced with a USD/NZD CCIRS at the spot rate
on the Novation date. The facility amount was increased to reflect the FX movement between the original USD/AUD CCIRS and the new USD/NZD CCIRS.
2 2 2
44 Committed Bank facilities are included at the face value of the facilities.
45 Commercial Paper is included as the amount on issue.
46 Climate Bonds Standard Certified.
The Programme Framework (Framework)
sets out the process, criteria and guidelines
under which Meridian intends to issue
and/or manage existing and future bonds
and loans under the Programme which
contribute towards achieving Meridian’s
sustainability objectives.
DNV has been commissioned by Meridian to
provide an external review of the Programme
through verification of the Wind Pool
and the Green Debt allocated (directly or
notionally) to the Wind Pool under the CBS;
and a second party opinion of the Hydro
Pool and the Green Debt allocated (directly
or notionally) to the Hydro Pool under the
Green Bond Principles (GBP) and Green
Loan Principles (GLP). The conclusion of
DNV’s external reviews are provided within
the following documents (also available on
Meridian’s website via link above):
• DNV Periodic Assurance Opinion
2023, Climate Bonds Standard Project
Pool (Wind) 31 July 2023; and
• DNV Periodic Second Party Opinion
2023, Green Bond & Loan Principles
Project Pool (Hydro) 31 July 2023.
The proceeds of Meridian’s debt instruments,
outlined in the accompanying tables, have
been allocated (directly or notionally) to
refinance eligible wind and hydro projects
and assets that meet the market standards.
At 30 June 2023, Meridian remains compliant
with the requirements of the Programme.
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C9 Lease liabilities
Lease liabilities analysis
Minimum lease payments
Not later than 1 year
Later than 1 year and not later than 3 years
Later than 3 years and not later than 5 years
Later than 5 years
Gross future lease payables
Less future finance costs
Present value of lease liabilities
Analysed as:
Not later than 1 year
Later than 1 year and not later than 3 years
Later than 3 years and not later than 5 years
Later than 5 years
Present value of lease liabilities
Comprising:
Current
Non-current
Lease details
Meridian’s current leases relate to
office spaces and a transmission
connection asset at Mill Creek.
Meridian reported interest expense
on lease liabilities of $2 million
(30 June 2022: $2 million) in the
Income Statement.
Refer to Note B1 Property, plant
and equipment for details of the
related Right of Use lease assets.
2023
$M
2022
$M
Lease liabilities,
measurement and recognition
3
6
6
22
37
(10)
27
3
5
4
15
27
3
24
27
5
10
9
32
56
(15)
41
4
7
7
23
41
4
37
41
Meridian recognises the present
value of expected lease payments
under lease arrangements as a
lease liabilities payable. Subsequent
repayments are split between principal
and interest expense. The interest
reflects a constant periodic charge
over the expected term of the lease.
A number of our lease arrangements
contain options to extend. Where we
are reasonably certain of taking up
those options, they are included in the
lease liability. If there is any uncertainty
around whether a lease extension will
be taken up, it is excluded from the
liability value.
Lease liabilities are classified as
financial liabilities at amortised cost.
The weighted average discount rate
applied in the calculation of lease
liabilities is 3.41% (30 June 2022: 3.19%).
2 2 3
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 C
C10 Commitments
Capital expenditure commitments
Property, plant and equipment
Software
Total capital expenditure commitments
Guarantees
Group
2023
$M
333
–
333
2022
$M
288
1
289
Various entities within the Group provide guarantees to external counterparties,
with these mostly relating to security for energy market clearing and property
lease agreements. The maximum liability under these guarantees is $80 million
(30 June 2022: $150 million).
2 2 4
Wind turbines at Te Āpiti wind farm, Manawatū. ►
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
D : Financial instruments used to manage risk
In this section
D1 Financial risk management
Financial instrument recognition
This section explains the financial
risks Meridian faces, how these risks
affect Meridian’s financial position
and performance, and how Meridian
manages these risks. In this section
of the notes there is information:
a. outlining Meridian’s approach to
financial risk management; and
b. analysing financial (hedging)
instruments used to manage risk.
Meridian’s activities expose it to a
variety of financial risks. Its financial
risk management framework focuses
on the unpredictability of financial
markets and wholesale enegy markets.
The Board approves policies including
Group Treasury, Energy Hedging and
Credit Policies which set appropriate
principles and risk tolerance levels to
guide management in carrying out
financial risk management activities
to minimise potential adverse effects
on the financial performance and
economic value of the Group. The
key risks managed are discussed
further below.
In order to help balance certain risk
exposures, Meridian uses a variety of
financial instruments (hedges). Hedges
are categorised as either ‘Treasury’
or ‘Energy’ related, based on their
underlying nature. A small number of
Treasury hedges are designated in
hedge accounting relationships (refer
to the Hedge accounting section for
further detail). Meridian does not
enter into speculative trades.
Meridian designates or classifies
financial hedging instruments as:
• Fair value hedge, hedges of the
fair value of recognised assets or
liabilities or a firm commitment; or
• Cash flow hedge, hedges of a
particular cash flow associated
with a recognised asset or liability
or a highly probable forecast
transaction; or
• Held for trading, financial instruments
which have not been designated in a
hedging relationship.
Meridian accounts for derivative
and certain designated financial
instruments as fair value through
the Income Statement.
Hedges are initially recognised at
fair value on the dates the contracts
are agreed, and are subsequently
remeasured on a periodic basis.
Remeasurement is recognised in
the Income Statement except for
effective cash flow hedges.
Fair value changes are recognised in
the Income Statement as net change
in the fair value of energy hedges or
net change in fair value of treasury
hedges, depending on the underlying
business nature of the hedge.
Calculation of fair value
for financial instruments
Meridian uses quoted prices and/or
a discounted cash flows approach
in order to calculate fair values for
financial instruments. Fair value
measurements are grouped within
a three-level fair value hierarchy
based on the observability of
inputs to the valuation process:
• Level 1 Inputs: quoted prices
(unadjusted) in active markets for
identical assets or liabilities that the
entity can access at reporting date;
• Level 2 Inputs: either directly (i.e. as
prices) or indirectly (i.e. derived from
prices) observable inputs other than
quoted prices included in Level 1; and
• Level 3 Inputs: inputs that are not
based on observable market data
(i.e. unobservable inputs).
Meridian has a number of energy
hedges that require management
estimation and judgement in order to
generate a fair value at each reporting
date. These estimates can have a
significant risk of material adjustment
in future periods. This is discussed in
more detail later in this section.
2 2 5
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
D
D1 Financial risk management continued
Credit risk
Meridian is exposed to the risk of
default in relation to energy sales to
wholesale and retail customers, hedging
instruments, guarantees and deposits
held with banks and other financial
institutions.
For retail customers, credit checks are
carried out before new customers are
accepted. The credit team oversees
the collection of receivables and works
with customers to minimise the chances
of bad debts occurring. Management
monitors the size and nature of retail
customer exposures on a regular basis
and acts to mitigate the risk if deemed
to exceed acceptable levels.
For banks and financial institutions, only
independently related parties with a
minimum rating of ‘A’ are accepted.
For wholesale customers, individual
credit limits are set based on internal
or external credit ratings in accordance
with limits set by the Board. Where
customers are not independently credit
rated, an assessment of credit quality
is made, taking into account financial
position, past experience and other
relevant factors. If appropriate, letters
of credit/guarantees are obtained from
counterparties to reduce credit risk to
acceptable levels. These assessments
and the utilisation of credit limits
and security provided by wholesale
customers are reviewed and monitored
by the Chief Financial Officer.
The carrying amounts of financial assets
recognised on the balance sheet best
represent Meridian’s maximum likely
exposure to credit risk at the date of
this report. Refer to Note C6 Trade
receivables for a description of how we
provide for any credit losses.
Liquidity risk
Meridian is exposed to the dynamic
nature of energy markets and weather
patterns, which can affect liquidity.
Meridian ensures flexibility in
funding by maintaining committed
surplus credit lines available of at
least $200 million (Refer to Note C7
Borrowings for details of undrawn
facilities). This helps ensure Meridian
has sufficient headroom under both
normal and abnormal hydrological
conditions.
Meridian manages its term debt
requirements on a portfolio basis.
To reduce concentration risk on any
one lender or funding type, Meridian
uses a range of different funding
sources and currencies. Meridian also
monitors contractual maturities and
ensures these are well spaced (or
laddered) so that refinancing risks
are manageable.
In addition to borrowings, Meridian
has entered into a number of letters
of credit and guarantee arrangements
which provide credit support of
$80 million for Meridian’s general
operations (30 June 2022: $150
million). Meridian indemnifies the
obligations of the bank in respect of
the letters of credit and performance
guarantees issued by the bank to
counterparties of Meridian.
2 26
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023 D
D1 Financial risk management continued
Liquidity risk –
contractual maturities
The following tables are an analysis
of the contractual undiscounted cash
flows (settlements expected under
the contracts) relating to financial
liabilities and a reconciliation from total
undiscounted cash flows to carrying
amounts. Meridian expects to meet
its future obligations from operating
cash flows and debt financing.
2023
$M
Borrowings
Lease liabilities
Payables, accruals, provisions and option premiums
Treasury hedges
Energy hedges
2022
$M
Borrowings
Lease liabilities
Payables, accruals, provisions and option premiums
Treasury hedges
Energy hedges
Due
within
1 year
Due in
1 to 2 years
Due in
3 to 5 years
Due
after
5 years
Total
undiscounted
cash flows
Impact of
other
non–cash
items
Impact of
interest/FX
discounting
274
258
270
3
387
19
51
6
37
–
44
6
20
5
71
741
22
–
2
–
1,543
37
444
26
166
734
345
372
765
2,216
(2)
–
–
–
–
(2)
Due
within
1 year
209
5
479
16
34
Due in
1 to 2 years
Due in
3 to 5 years
Due after
5 years
Total
undiscounted
cash flows
Impact of
other
non–cash
items
202
460
10
32
4
32
9
22
7
56
547
32
4
3
8
1,418
56
537
30
130
743
280
554
594
2,171
(2)
–
–
–
–
(2)
2023
carrying
value
1,236
27
441
27
155
(305)
(10)
(3)
1
(11)
(328)
1,886
Impact of
interest/FX
discounting
2022
carrying
value
(253)
1,163
(15)
(3)
(4)
(12)
41
534
26
118
(287)
1,882
2 2 7
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 vw
D
D1 Financial risk management continued
Market risk
Meridian is involved in both the energy
and financial markets and as such is
exposed to rises and falls in those
markets and the subsequent income
statement volatility this can cause. The
following are the main sub-types of
market risk that Meridian is exposed to:
Commodity price risk
Foreign exchange risk
Interest rate risk
Meridian trades in the wholesale
energy markets and so is exposed to
volatility in forward energy prices.
Being both a generator and a retailer
of energy means that Meridian has a
natural hedge for most of the exposure
to future energy prices.
Meridian also uses derivatives to help
manage its net energy position, some
of which are traded in quoted markets,
and some of which are traded directly
with other energy market participants.
Energy hedges are not placed in hedge
accounting relationships.
Meridian is exposed to foreign
exchange risk arising from sales and
procurement of goods and services
denominated in foreign currencies
and also from term debt raised in
foreign currencies.
For exposures resulting from
Meridian’s general operations, foreign
exchange spot or forward contracts
are used to fix the value in reporting
currency terms. Material items may
be placed in hedge accounting
relationships and can be either fair
value hedges or cash flow hedges,
depending on the nature of the
transaction/underlying exposure.
For term debt raised in USD, cross-
currency interest rate swaps (CCIRS)
are used to convert the proceeds
back to functional currency. These
derivatives minimise foreign exchange
risk on both the notional
and the coupon flows over the life
of the debt. CCIRS are placed in
both fair value and cash flow hedge
accounting relationships.
Meridian is exposed to interest rate risk
arising from its funding portfolio, which
is a mix of fixed and floating rate debt.
Meridian issues debt on both a fixed
and a floating basis and is thus exposed
to changes in interest rates over time.
A portfolio of interest rate swaps (IRS) is
then used to manage the net exposure
to interest rate risk, in line with a Board-
approved hedging policy and profile.
Refer to the Foreign Exchange section
for derivatives used for term debt
raised in foreign currencies.
Meridian swaps a significant portion
of its borrowings to floating rates
at loan inception, and hedges the
resulting interest rate exposure over
a tenure based profile of fixed IRS.
This is achieved using a combination
of CCIRS and IRS hedges. Where
Meridian borrows in foreign currency
it uses CCIRSs to swap all foreign
currency denominated interest and
principal repayments to the reporting
currency. This results in floating rate
borrowings in the entity’s reporting
currency. Meridian uses IRS hedges to
fix floating interest rates in line with
the Board-approved hedging policy
and profile.
2 2 8
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023 vw
D
D1 Financial risk management continued
Climate risk
Meridian is exposed to future changes
in climate, which may impact on our
industry, our business and our customers.
Future impacts may be physical, such
as changes in weather patterns or
rising temperatures, or they may be
more transitional in nature, such as
amendments to government policy
and regulation, or changes in customer
energy needs and demands. Meridian
actively assesses the operating
environment in New Zealand, in
respect of the potential future impacts
that changes in climate may have on
Meridian. We report formally on this
process each year in our detailed
Climate-related Disclosures (also
referred to as ‘TCFD reporting’),
which can be found on our
corporate website.
Meridian’s climate-related scenarios,
risks and opportunities consider
three time horizons: short term (up to
2030), medium term (2030 to 2050)
and long term (2050 to 2100). These
time horizons are longer than we have
previously considered in recognition of
the useful life of some of our assets, such
as those for hydro electricity generation,
and the potential for increasing physical
impacts from climate change in the
medium to long term. Any mitigating
actions are embedded into the relevant
area of Meridian’s business and longer-
term observations are incorporated in
our business strategy.
Meridian adopted a new approach to
the annual exercise of identifying and
assessing climate-related risks and
opportunities this financial year. The
process applies newly adopted climate
scenarios (building on incumbent
Evolution and Revolution scenarios),
and aligns with Meridian’s updated
Risk Management Policy and Risk
Management Framework.
Meridian also sets various targets for
its emissions profile, and identifies
the metrics used in tracking progress
towards its objectives. As part of
preparing this report, Meridian
considers climate risk and whether it
may have any impact on our financial
statements and associated disclosures.
The most material area we see climate
risk having a future impact is on our
valuation of generation structures,
which we account for at fair value. Refer
to our Climate-related Disclosures (as
previously referenced on our corporate
website) and Section B: Assets used
to generate and sell electricity for
more information. Section B includes a
sensitivity analysis indicating how much
value may change with variations in key
inputs, such as generation volumes and
wholesale market prices, which both
include climate change considerations.
Churning water at Benmore Power Station, Otematata. ►
2 2 9
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023 D
D1 Financial risk management continued
Treasury hedges
Hedges in the Treasury category generally relate to management of the interest
rate risk and foreign exchange risk that arise from Meridian’s funding activities
and from general Group operations.
The instruments used are CCIRS, IRS and forward exchange contracts (FX).
In the previous table, fair value movements in the Income Statement are shown
net of any related hedge accounting adjustments and retranslation of foreign
currency borrowings.
Refer to the Hedge Accounting section of Note D1 Financial risk management
for further detail on fair value and cash flow hedge relationships.
Fair value on the balance sheet
Fair value
movements
in the income
statement
Outstanding
aggregate
notional
principals47
2023
$M
2022
$M
2023
$M
2022
$M
2023
$M
2022
$M
Treasury hedges – sensitivity analysis
The table below summarises the impact of changes in significant inputs
(assuming all other variables are held constant) on the valuation of Treasury
Hedges and therefore on Meridian’s after tax profit and equity.
Treasury hedges
Level
Assets Liabilities Assets Liabilities
CCIRS
– Interest Rate Risk48
(34)
(15)
– Basis and Margin Risk49
– Foreign Exchange Risk50
IRS51
FX52
Treasury hedges
–
66
32
46
7
85
–
(15)
(12)
–
(27)
2
2
2
(9)
(1)
54
44
30
19
93
(6)
–
–
(6)
(20)
–
1
–
–
1
23
–
4
–
–
4
586
586
132
1,365
1,295
–
152
150
(26)
24
136
Note that changes in the fair value of the CCIRS are fully offset by opposite
impacts from hedge accounting entries and the FX retranslation of the USD
debt. Therefore, the CCIRS Income Statement sensitivity is nil and is not shown
in the table below.
The majority of the FX portfolio is designated in cash flow hedge relationships.
Changes in spot exchanges rates are fully offset by opposite impacts from hedge
accounting entries in the Income Statement, for these contracts the Income
Statement sensitivity is nil.
Meridian uses CCIRS to hedge risks involved with long-term debt issued in USD. In the above
table the CCIRS are separated into component parts as follows:
47 These cover multiple legs including offsetting legs and maturities out to 2036.
48
Interest rate risk: this is the movement in value of the CCIRS due to changes in benchmark interest
rates. The other side of this movement is recorded in the Income Statement in the ‘Net change in
fair value of treasury instruments’, together with changes in the fair value hedge adjustments on
the designated USD borrowings.
Interest rates
New Zealand benchmark bill rate
-100 basis points (bps)
Sensitivity
49 Basis and margin risk: this is the movement in the value of the CCIRS due to changes in basis
Foreign exchange rates
(excluding foreign exchange) and credit margin. The other side of this movement is recorded in
the Income Statement in the ‘Net change in fair value of treasury instruments’, together with cash
flow hedge accounting adjustments that transfer effective hedge portions to the Cash Flow Hedge
Reserve within Equity.
50 Foreign exchange risk: this is the movement in value of the CCIRS due to changes in spot foreign
exchange rates. The impact of retranslation is recorded in the Income Statement in ‘Net change in
fair value of treasury instruments’ and is offset by equal and opposite retranslation effects on the
related borrowings.
51 Changes in fair value of IRS are recognised in the Income Statement within ‘Net change in fair value
of treasury instruments’.
52 Changes in fair value of FX contracts are recognised in the Income Statement within ‘Net change in
fair value of treasury instruments’, together with cash flow hedge accounting adjustments that transfer
effective hedge portions to the Cash Flow Hedge Reserve within Equity.
Effect of movement in foreign exchange
rates on foreign exchange contracts
+100 bps
-20%
+20%
Impact on after tax
profit & equity
2023
$M
2022
$M
(24)
21
(1)
1
(30)
27
(4)
4
2 31
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 D
D1 Financial risk management continued
Energy hedges
Hedges in this category relate to Meridian’s management of risk arising from the
generation, purchase and sale of energy.
The ‘Market traded electicity hedges’ category contains instruments that are
traded on various exchange-based markets.
Meridian is exposed to changes in the spot price of electricity it receives for electricity
generated, or pays to buy electricity and gas to supply customers. Additionally,
inflows into Meridian’s storage lakes are variable, therefore the volume of electricity
required to supply customers may exceed (or fall short of) generation production.
Meridian’s hedging strategy focuses on its net exposure by estimating both expected
generation and energy purchases required to support contracted sales. Execution of
this strategy is guided by Board-approved parameters. Changes in the fair value of
energy hedges are recognised in the income statement within net change in fair value
of energy hedges. Hedge accounting is not applied to energy hedges.
The ‘Other electricity hedges’ category contains over-the-counter derivatives,
where counterparties include customers, other energy market participants and
financial institutions.
These hedges are generally longer-term, larger-volume contracts that manage
specific risks that cannot be managed through exchange-based markets.
Meridian trades electricity options with other generators. These are used to
support the management of inflow and storage variability in the catchments
where it generates electricity.
Energy hedges
Market traded electricity hedges
Other electricity hedges
Electricity options
Energy-related hedges
Fair value on the balance sheet
2023
$M
2022
$M
Fair value movements in
the income statement
2023
$M
2022
$M
Outstanding aggregate
notional volumes53
2023
2022
Level
Assets
Liabilities
Assets
Liabilities
1
3
3
133
102
34
269
(48)
(107)
–
(155)
287
207
39
533
(21)
(97)
–
(118)
(230)
(121)
(24)
(375)
161
114
20,383 GWh
19,486 GWh
9,532 GWh
13,484 GWh
(9)
1,345 GWh
1,873 GWh
266
2 3 2
53 These cover multiple legs including offsetting legs and maturities out to 2028.
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
D D1 Financial risk management continued
Energy hedges – sensitivity analysis
The table below summarises the impact of changes in significant inputs
(assuming all other variables are held constant) on the value of energy
hedgesand therefore on Meridian’s after tax profit and equity.
Energy hedges
Energy prices
Discount rates
Call volumes
Impact on after tax
profit & equity
2023
$M
(74)
74
–
–
(2)
3
2022
$M
(105)
105
1
(1)
(3)
3
Sensitivity
-10%
+10%
-100 bps
+100 bps
-10%
+10%
Analysis of fair value movements on energy hedges
The following table provides an analysis of fair value movement on energy hedges. In Note A1
Segment performance, realised movements on energy hedges are presented within Energy Margin.
Realised movement in energy hedges
Unrealised movement in energy hedges
Total fair value movements on energy hedges
2023
2022
Market
traded
electricity
hedges
(22)
(208)
(230)
Other
electricity
hedges
Electricity
options
(21)
(100)
(121)
1
(25)
(24)
Market
traded
electricity
hedges
(3)
164
161
Total
(42)
(333)
(375)
Other
electricity
hedges
Electricity
options
111
3
114
13
(22)
(9)
Total
121
145
266
2 3 3
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 D
D1 Financial risk management continued
Fair value technique
and key inputs
In estimating the fair value of an asset
or liability, Meridian uses market-
observable data to the extent that it is
available. The Audit and Risk Committee
of Meridian determines the overall
appropriateness of key valuation
techniques and inputs for fair value
measurement. The Chief Financial
Officer explains fair value movements
in his report to the Board.
Where the fair value of a financial
instrument is calculated as the present
value of the estimated future cash flows
of the instrument (DCFs), a number of
inputs and assumptions are used by
the valuation technique.
These are:
•
forward price curves referenced to
the ASX for electricity, published
market interest rates and published
forward foreign exchange rates;
• Meridian’s best estimate of electricity
volumes called over the life of
electricity options;
• discount rates based on market
wholesale interest rate curves,
adjusted for counterparty risk;
• calibration factor applied to forward
price curves as a consequence of
initial recognition differences;
• NZAS continues to operate until
31 December 2024; and
• contracts run their full term.
The table below describes any additional key inputs and techniques used in the valuation of Level 2 and 3 energy hedges.
Financial asset or liability Description of input
Range of significant
unobservable inputs
Relationship of input to fair value
Other electricity hedges,
Price, where quoted prices are not available or not relevant
$29MWh to $55MWh (in real terms),
An increase in the forward wholesale electricity price
valued using DCFs
(i.e. for long-dated contracts), Meridian’s best estimate of long-term
excludes observable ASX prices
increases the fair value of buy hedges and decreases
forward wholesale electricity price is used. This is based on a fundamental
(2022: $34MWh to $115MWh)
the fair value of sell hedges. A decrease in the forward
analysis of expected demand and the cost of new supply and any other
wholesale electricity price has the opposite effect.
relevant wholesale market factors.
2 3 4
MERIDIAN INTEGRATED REPORT 2023NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023
D
D1 Financial risk management continued
Level 3 financial instrument analysis
The following provides a summary of the movements through EBITDAF as referred to in Note A1 Segment performance and movements
in the fair value of Level 3 financial instruments
Reconciliation of Level 3 fair value movements $M
Net change in fair value of energy hedges:
Unrealised movements
Realised movements
Total fair value movement in the Income Statement on energy hedges
Balance at the beginning of the period
Fair value movements in the Income Statement
Remeasurement
Disposals
New hedge recognised
Balance at the end of the year
2023
2022
Other electricity
hedges
Electricity
options
Total
Other electricity
hedges
Electricity
options
Total
(100)
(21)
(121)
110
(121)
6
–
–
(5)
(25)
1
(24)
39
(24)
(1)
–
20
34
(125)
(20)
(145)
149
(145)
5
–
20
29
3
111
114
139
114
(139)
(4)
–
110
(22)
13
(9)
29
(9)
(13)
–
32
39
(19)
124
105
168
105
(152)
(4)
32
149
Fair value movements of Level 3 energy hedges in 2023 which are held at balance date total ($107) million (30 June 2022: ($4) million).
Movements in recalibration
differences arising from energy hedges
Opening difference
Volumes expired and amortised
Recalibration for future price estimates and time
Closing difference
2023
$M
2022
$M
–
–
–
–
(2)
2
–
–
Initial recognition difference
An initial recognition difference arises when the modelled value of an energy
hedge differs from the transaction price (which is the best evidence of fair value).
This difference is accounted for by recalibrating the valuation model by a fixed
percentage to result in a value at inception equal to the transaction price. This
recalibration is then applied to future valuations over the life of the contract.
The resulting difference shown in the table reflects potential future gains or
losses yet to be recognised in the Income Statement over the remaining life
of the contract.
2 3 5
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
D
D1 Financial risk management continued
Hedge accounting
This means:
This means:
Foreign exchange risk
Meridian makes use of hedge
accounting for USD borrowings, certain
highly probable forecast transactions
and the financial instruments that
are used to economically hedge
these exposures. Refer to the Risk
Management section for a description
of the key risks Meridian manages.
•
the carrying value of the USD
borrowings are adjusted for
changes in the fair value of the
hedged risk – noted as “hedge
accounting adjustments” in
Note C7 Borrowings; and
•
the CCIRS are revalued to the
Income Statement for this same risk
Meridian only designates hedge
accounting relationships where the
underlying exposure and the hedge
are eligible for hedge accounting and
are an economic match, where credit
risk is not expected to dominate the
fair value of the hedge, and where
we expect the hedge relationship
to remain effective over its life.
The USD borrowings (hedged items)
and the CCIRS (hedging instruments)
present Meridian with risks which we
account for in the following ways:
Interest rate risk
The USD borrowings are fixed rate
liabilities and thus present interest
rate risk, should benchmark interest
rates change. This risk is neutralised
by receiving the same fixed rate on
the USD leg of the matching CCIRS.
Meridian designates the interest rate
risk on USD borrowings in fair value
hedge accounting relationships.
As long as the hedge accounting
relationships remain effective, the
revaluations of both the hedged item
and hedging instrument should net
to a minimal amount in the Income
Statement. This residual difference is
referred to as hedge ineffectiveness.
Note that the accumulated life to date
hedge accounting adjustments on the
USD borrowings decrease the carrying
value of the borrowings by $50 million
(2022: decrease by $16 million).
Basis and margin risk
The combination of USD borrowings
and CCIRS economically results in
Meridian having floating rate NZD
borrowings. This presents a risk of
variability in future cash flows. As
such, Meridian designates basis risk
(excluding FX) and margin risk into
cash flow hedge relationships.
•
•
the CCIRS are revalued to the
Income Statement for basis risk
and margin risk; and
the effective portions of the
hedge are moved from the Income
Statement to the Cash Flow Hedge
Reserve within Equity.
As noted earlier, there may be small
differences between the above entries
which result in hedge ineffectiveness
in the Income Statement.
Refer to:
• Note C7 Borrowings for the
carrying value of the hedged
items (USD borrowings);
• Note D1 Treasury hedges for
further information on the
hedging instruments (CCIRS),
including notionals and changes in
fair value during the period; and
• The Statement of Changes in Equity
for the balance of the Cash Flow
Hedge Reserve and movements
during the period.
Note that on the Balance Sheet, USD
borrowings are included within Term
Borrowings and CCIRS are included
within Financial Instruments.
Meridian has hedged highly
probable forecast capital expenditure
denominated in currencies other than
NZD using forward exchange contracts.
The foreign currency exposures give
rise to the risk of variability to future
cash flows. To mitigate this risk, forward
foreign exchange contracts have been
entered into. The cash flows associated
with these contracts are timed to
mature when the payment for capital
expenditure is made. For contracts
designated as cash flow hedges for
accounting purposes, when the cash
flows occur Meridian adjusts the
carrying value of the asset acquired.
Hedge ineffectiveness
The below table summarises hedge
ineffectiveness. This is included within
“Net change in fair value of Treasury
Hedges” in the Income Statement.
Impact on income statement
2023
$M
2022
$M
Hedge ineffectiveness gain (loss)
1
4
Ineffectiveness is primarily caused by
credit counterparty risk on CCIRS. This
risk is part of the CCIRS fair value but is
not included in the hedged item.
Hedge ineffectiveness will net to zero
over the life of the hedge relationships.
2 3 6
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 D D1 Financial risk management continued
Future cash flows
The table below estimates the contractual undiscounted future cash flows that we expect on hedge accounted items.
Amounts noted include coupons and repayment/exchange of notionals on maturity.
Currency as indicated below
USD Borrowings (shown in USD)
CCIRS
– USD leg (coupons and maturity flow – shown in USD)
– Functional currency leg (coupons and maturity flow – shown in NZD)
Foreign Exchange Contracts
– Foreign currency leg (shown in NZD)
– NZD leg
2023
$M
2022
$M
Due within
1 year
Due within
1–2 years
Due within
2–5 years
Due after
5 years
Due within
1 year
Due within
1–2 years
Due within
2–5 years
Due after
5 years
(16)
(16)
(140)
(330)
(16)
(16)
(144)
(342)
16
(42)
134
(128)
16
(41)
24
(24)
140
(236)
330
(503)
–
–
–
–
16
(26)
101
(90)
16
(34)
66
(59)
144
(240)
342
(528)
–
–
–
–
Functional currency coupons are set quarterly based on NZ benchmark rates. They are shown in this table based on market forward interest rates.
The foreign currency leg of foreign exchange contracts is translated to NZD using spot exchange rates at reporting date.
Financial instruments which are offset
In certain circumstances Meridian offsets the fair value of financial instruments where it has legal agreements in place that permit netting of positions and net settlement.
Financial instrument assets
– Energy hedges
– Treasury hedges
Total financial instrument assets
Financial instrument liabilities
– Energy hedges
– Treasury hedges
Total financial instrument liabilities
Net financial instruments
2023
$M
2022
$M
Gross value
Value offset
Carrying value
Gross value
Value offset
Carrying value
434
85
519
(320)
(27)
(347)
172
(165)
–
(165)
165
–
165
–
269
85
354
(155)
(27)
(182)
172
708
93
801
(293)
(26)
(319)
482
(175)
–
(175)
175
–
175
–
533
93
626
(118)
(26)
(144)
482
2 3 7
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 E : Group structure
In this section
E1 Subsidiaries
This section provides information to
help readers understand the Meridian
Group structure and how it affects the
financial position and performance of
the Group. In this section of the notes
there is information about Meridian’s
subsidiaries.
The consolidated financial statements
include the financial statements of
Meridian Energy Limited and the
subsidiaries listed below.
They all have share capital consisting
solely of ordinary shares that the Group
holds directly, and the proportion of
ownership interests held equals the
Group’s voting rights.
Meridian Energy Limited provides
support to its subsidiaries where
necessary to ensure they meet
their obligations as they fall due.
Name of entity
Meridian Energy Limited54
Flux Federation Limited
Flux-UK Limited
Principal activity
Functional currency
2023
2022
Interest held
by the Group
Software development
New Zealand dollar
License holder
British pound
100%
100%
100%
100%
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
Dam Safety Intelligence Limited
Professional services
New Zealand dollar
Meridian Energy Captive Insurance Limited
Insurance
New Zealand dollar
Meridian Limited
Non-trading entity
New Zealand dollar
Meridian Energy International Limited
Non-trading entity
New Zealand dollar
Powershop New Zealand Limited
Non-trading entity
New Zealand dollar
Meridian LTI Trustee Limited55
Trustee
New Zealand dollar
2 3 8
54 Member of the guaranteeing group as at 30 June 2023.
55 During the period, Meridian LTI Trustee Limited was wound up and removed from the companies register.
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
F : Other
In this section
LTI plan
This section includes the remaining
information relating to Meridian’s
financial statements which is required
to comply with financial reporting
standards.
F1 Share-based payments
Long-term incentive
In August 2019, the Board approved a
new long-term incentive (LTI) plan to
replace Meridian’s previous LTI plan.
Set out below is a summary of the LTI
plan which was first offerred in FY20
(for the period commencing on 1 July
2019 and ending 30 June 2022).
The Chief Executive, Executive Team
and selected Tier 3 leaders also have
the opportunity to participate in an
LTI plan. An LTI plan is offered at the
discretion of the Board, to align senior
management and shareholders’
interests, and optimise long-term
shareholder returns.
The LTI opportunity is 40% of salary
for the Chief Executive, 30% of salary
for the Executive Team, and 15% of
salary for eligible Tier 3 leaders. Vesting
of the LTI is contingent on meeting
absolute and relative Total Shareholder
Return (TSR) performance hurdles at
the conclusion of a three-year period.
Under Meridian’s LTI plan, the company
issues rights to acquire ordinary shares
in the company (Share Rights) to
eligible participants who accept the
offer to participate in the LTI plan. Each
Share Right entitles the holder to one
ordinary share in the company and an
additional number of shares equal to
the value of gross cash dividends per
share which would have been paid to
a New Zealand tax resident who held
a share for the duration of the vesting
period, calculated using a 10-day
volume weighted average price.
The number of Share Rights that
vest is dependent on:
• Meridian’s total shareholder return
over a three-year performance
period (Performance Period)
relative to Meridian’s cost of equity;
• Meridian’s total shareholder
return over the Performance
Period relative to a defined group
of NZX Main Board and ASX listed
peer companies (Performance
Hurdles); and
•
if the participant continues to
be employed by Meridian during
the vesting period (Employment
Condition),
Performance hurdles
Share Rights are granted in two tranches:
• Absolute Return Share (ABS) rights; and
• Relative Return Share (REL) rights.
For ABS rights to vest, the company’s
TSR must be greater than the absolute
TSR benchmark which is set at the
beginning of the vesting period
with regard to the company’s cost of
equity (Absolute TSR Benchmark) on
a compounding annual basis over the
Performance Period. If the company’s
TSR is equal to or lower than the
Absolute TSR Benchmark, no ABS rights
will vest. If the company’s TSR is greater
than the Absolute TSR Benchmark,
100% of the ABS rights will vest.
The number of REL rights that vest is
determined by the company’s TSR over
the Performance Period relative to the
peer group. For any of the REL rights to
vest, the company’s TSR must be greater
than or equal to the 50th percentile/
median TSR of the peer group. 100% of
the REL rights will vest on meeting the
75th percentile TSR of the peer group,
with vesting on a straight-line basis
between these two points.
For each three-year plan, an
independent external expert measures
the TSR of Meridian and the peer group
of companies along with the outcome
on the progressive vesting scale.
Share Rights will lapse if the Vesting
Conditions are not satisfied (although
this is subject to the Board’s discretion in
relation to the Employment Condition).
For the LTI plan performance period to
the end of 2023, the level of vesting
was 0% (2022: 48.8%). Therefore, no
shares will be transferred to the eligible
participants for that LTI (2022: 251,565)
During the period, 941,774 share rights
were issued to eligible staff, 470,887
being ABS rights and 470,887 being REL
rights. Participants' rights to 424,842
shares were forfeited as performance
hurdles weren’t met. Relative share
rights numbering 204,834 vested
during the period. The share price
was $4.53 at the date of exercise.
The fair value of the ABS rights at
grant date of $2.66 (2022: $2.14)
was estimated by a modified form
of the standard Black-Scholes option
pricing model, including dividend
adjustment. The fair value of the
REL rights at grant date of $3.22
(2022: $2.93) was estimated by using
a Monte Carlo simulation of the
possible future performance of
Meridian's TSR and of the TSR of each
company in the Peer Group from
the grant date using correlation and
volatility input estimates. The fair
value of the rights, multiplied by the
number of instruments likely to vest,
is recognised as an expense over the
relevant three-year service period.
2 3 9
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 F
F1 Share-based payments continued
Movement in zero–priced share options
Number of options/rights
Grant date
Vesting date
LTI scheme and type
Weighted average
fair value of option
Balance at
the start
of the year
2023
27/10/22
27/10/22
21/10/21
21/10/21
9/03/21
9/03/21
7/10/2019 & 28/2/20
7/10/2019 & 28/2/20
Total
2022
21/10/21
21/10/21
9/03/21
9/03/21
7/10/2019 & 28/2/20
7/10/2019 & 28/2/20
Total
3/10/25
3/10/25
21/10/24
21/10/24
30/06/23
30/06/23
7/10/22
7/10/22
21/10/24
21/10/24
30/06/23
30/06/23
7/10/22
7/10/22
New – ABS
New – REL
New – ABS
New – REL
New – ABS
New – REL
New – ABS
New – REL
New – ABS
New – REL
New – ABS
New – REL
New – ABS
New – REL
$2.66
$3.22
$2.14
$2.93
$3.53
$3.75
$3.54
$3.36
$2.14
$2.93
$3.53
$3.75
$3.54
$3.36
2 4 0
Granted
during
the year
470,887
470,887
–
–
–
–
–
–
Vested
during
the year
Forfeited
during
the year
Balance at
the end of
the year
–
–
–
–
–
–
–
(204,834)
–
–
–
–
(212,421)
(212,421)
–
470,887
470,887
209,180
209,180
–
–
–
–
209,180
209,180
212,421
212,421
–
204,834
1,048,036
941,774
(204,834)
(424,842)
1,360,134
–
–
238,084
238,084
204,834
204,834
885,836
209,180
209,180
–
–
–
–
418,360
–
–
–
–
–
–
–
–
–
(25,663)
(25,663)
(204,834)
209,180
209,180
212,421
212,421
–
–
204,834
(256,160)
1,048,036
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
F
F2 Related parties
F3 Auditor's remuneration
Meridian transacts with other Government-owned or related entities
independently and on an arm’s-length basis. Transactions cover a variety
of services including trading energy, transmission, postal, travel and tax.
A number of the company’s directors are also directors of other companies,
and a number of these companies transacted with the Group on normal
commercial terms during the reporting period. Any transactions undertaken
with these entities have been entered into on an arm’s-length commercial
basis, without special privileges.
Compensation of key management personnel
The remuneration of directors and other members of key management
during the year was as follows:
Directors' fees
CEO, senior management team and subsidiary chief executives
Salaries and short-term benefits
Post-employment benefits
Redundancy benefits
Long-term benefits
Group
2023
$M
1
2022
$M
1
8
–
–
1
9
8
–
–
–
8
Auditor's remuneration to Deloitte Limited for:
Audit and review of New Zealand-based companies’ financial statements
Audit of overseas-based companies’ financial statements
Total audit fees
Other assurance fees
Total auditor remuneration
Group
2023
$M
0.7
–
0.7
0.2
0.9
2022
$M
0.6
0.1
0.7
0.2
0.9
The Board has adopted a policy to maintain the independence of the Company’s
external auditor, including a review of all other services performed by Deloitte
Limited and recommending to the Office of the Auditor-General that there be
lead partner rotation after a maximum of five years. The Auditor-General has
appointed Mike Hoshek of Deloitte Limited as auditor of the company. The audit
fee includes Office of the Auditor-General overhead contribution of $37,750
(2022: $39,973).
Other assurance services undertaken by Deloitte Limited during the year included
reviews of greenhouse gas inventory and sustainability reporting assurance, audit of
the securities registers, vesting of the executive long-term incentive plan, the solvency
return of Meridian Energy Captive Insurance Limited and supervisor reporting.
Other fees paid to Deloitte during the year include $14,000 (2022: $17,000) to
Deloitte Limited for administrative and other advisory services to the Corporate
Taxpayers Group, of which Meridian, alongside a number of other organisations,
is a member.
In 2022 Meridian also paid $62,880 to Deloitte Touche Tohmatsu for assurance
services relating to the sale of MEA.
2 41
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023 F5 Subsequent events
There are no other subsequent events
other than dividends declared on
28 August 2023. Refer to Note C4
Dividends for more information.
F6 Changes in financial
reporting standards
All mandatory amendments and
interpretations have been adopted
in the current year. None have had
a material impact on these financial
statements. Meridian is not aware
of any standards issued but not yet
effective that would materially affect
the amounts recognised or disclosed
in the financial statements.
F
F4 Contingent assets
and liabilities
During the current period, Meridian
sought a stamp duty refund from the
New South Wales Tax Office for the
amount of AU$7.8 million (NZ$8.3
million) in relation to its former holdings
in Meridian Energy Australia. Meridian
was successful at first instance in the
NSW Supreme Court in August 2022
and on appeal, in the NSW Court of
Appeal in July 2023. The NSW Chief
Commissioner of State Revenue has
now filed a special leave application to
appeal with the High Court of Australia.
No amount has been recognised in the
financial statements in relation to the
stamp duty refund because Meridian
is pursuing the amount through a
legal process, where the outcome
is uncertain.
There were no contingent assets or
liabilities at 30 June 2023 (2022: Nil).
2 4 2
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2023MERIDIAN INTEGRATED REPORT 2023
Independent auditor’s report
To the shareholders of Meridian Energy Limited for the year ended 30 June 2023.
The Auditor-General is the auditor
of Meridian Energy Limited and
its subsidiaries (the Group). The
Auditor-General has appointed me,
Mike Hoshek, using the staff and
resources of Deloitte Limited, to carry
out the audit of the consolidated
financial statements of the Group
on his behalf.
Opinion
We have audited the consolidated
financial statements of the Group
on pages 191 to 242, that comprise
the consolidated balance sheet as at
30 June 2023, the consolidated income
statement, consolidated comprehensive
income statement, consolidated
statement of changes in equity and
consolidated statement of cash flows
for the year ended on that date and
the notes to the consolidated financial
statements including a summary of
significant accounting policies and other
explanatory information.
In our opinion, the consolidated financial
statements present fairly, in all material
respects, the consolidated financial
position of the Group as at 30 June
2023, and its consolidated financial
performance and its consolidated
cash flows for the year then ended
in accordance with New Zealand
equivalents to International Financial
Reporting Standards and International
Financial Reporting Standards.
Basis for our opinion
We conducted our audit in accordance
with the Auditor-General’s Auditing
Standards, which incorporate the
Professional and Ethical Standards
and the International Standards on
Auditing (New Zealand) issued by the
New Zealand Auditing and Assurance
Standards Board. Our responsibilities
under those standards are further
described in the Auditor’s responsibilities
for the audit of the consolidated
financial statements section of our
report. We are independent of the
Group in accordance with the Auditor-
General’s Auditing Standards, which
incorporate Professional and Ethical
Standard 1: International Code of Ethics
for Assurance Practitioners issued by the
New Zealand Auditing and Assurance
Standards Board.We note that during
the period our systems identified that a
non-audit partner in the same office as
the engagement partner inadvertently
held an interest in the entity for part of
the period, which was rectified prior to
the issuance of this opinion. The matter
does not have an impact on the financial
statements and has not compromised
our objectivity as auditor.
We believe that the audit evidence
we have obtained is sufficient and
appropriate to provide a basis for our
opinion.
Other than the audit, our firm carries
out other assurance assignments for
the Group in the areas of greenhouse
gas inventory assurance, limited
assurance of the sustainability content
in the integrated report prepared in
accordance with the Global Reporting
Initiative Sustainability Reporting
Standards, review of the interim financial
statements, audit of the securities
registers, audit of the fixed rate bond
registers, vesting of the executive long-
term incentive plan, the solvency return
of Meridian Captive Insurance Limited,
gap analysis in regards to climate related
disclosures readiness programme, and
supervisor reporting. We also carried
out non-assurance assignments for
the Group relating to the Corporate
Taxpayers Group of which Meridian
Energy Limited is a member. These
engagements are compatible with those
independence requirements.
In addition, principals and employees
of our firm deal with the Group on
arm’s length terms within the ordinary
course of trading activities of the Group.
These services have not impaired our
independence as auditor of the Group.
Other than these engagements and arm’s
length transactions, and in our capacity as
auditor acting on behalf of the Auditor-
General, we have no relationship with, or
interests in, the Group.
Audit materiality
We consider materiality primarily in
terms of the magnitude of misstatement
in the consolidated financial statements
of the Group that in our judgement
would make it probable that the
economic decisions of a reasonably
knowledgeable person would be
changed or influenced (the ‘quantitative’
materiality). In addition, we also assess
whether other matters that come to
our attention during the audit would
in our judgement change or influence
the decisions of such a person (the
‘qualitative’ materiality). We use
materiality both in planning the scope
of our audit work and in evaluating the
results of our work.
We determined materiality for the Group
consolidated financial statements as a
whole to be $21 million.
Key audit matters
Key audit matters are those matters that,
in our professional judgement, were
of most significance in our audit of the
consolidated financial statements of
the current period. These matters were
addressed in the context of our audit of
the consolidated financial statements
as a whole, and in forming our opinion
thereon, and we do not provide a
separate opinion on these matters.
2 4 3
MERIDIAN INTEGRATED REPORT 2023INDEPENDENT AUDITOR’S REPORT Key audit matters
Valuation of Generation Structures and Plant
As explained in note B1 in the Group financial statements, generation structures and plant are
carried at fair value less any subsequent accumulated depreciation and impairment losses at
balance sheet date.
The net book value of generation structures and plant as reflected in note B1 is $8,334 million
(2022: $7,472 million).
The Group performs a valuation every year to ensure that the carrying value does not differ
significantly from the fair value at balance date.
As a result of this valuation, generation structures and plant have been revalued this year as at
30 June 2023. The revaluation resulted in an increasein value by $1,111 million (2022: decrease
of $55 million). The impact of the revaluation is recognised as an increase of $1,111 million in the
revaluation reserve with no income statement impact in the current period (2022: decrease of
$55 million in the revaluation reserve with no income statement impact ).
The valuation methodology is based on a discounted cashflow (‘DCF’) approach. The key inputs
into the DCF are the future New Zealand wholesale electricity price path, forecasted future
generation volumes and the weighted average cost of capital (‘WACC’). Changes to these
forecasts could significantly change the fair value of the generation assets. The inputs do not
fully use observable market data and require significant judgement and estimates to be made
by the valuer. As outlined in note B1 the valuation has considered the impact of climate change
and the potential New Zealand Aluminium Smelter (‘NZAS’) exit in 2024 on the valuation.
We include valuation of generation structures as a key audit matter because of the inherent
technical and judgemental complexity associated with determining the fair value.
How our audit addressed the key audit matters
Our audit procedures focused on assessing the key inputs into the model used to estimate
the fair value of the generation structures and plant. This included:
• The reasonableness of the future New Zealand wholesale electricity price paths;
• The reasonableness of the future forecasted generation volumes; and
• The reasonableness of the applied weighted average cost of capital.
Our procedures included but are not limited to:
•
Evaluating the Group’s processes and controls for the valuation of the generation
structures and plant;
• Reviewing the valuation methodology and the reasonableness of the significant underlying
assumptions as well as challenging whether the forecast was in line with internal and external data;
• Assessing the competence, objectivity and integrity of the valuation team;
• Utilising our in-house valuation specialists to assess the appropriateness of the valuation
methodology and the reasonableness of the valuation range determined by the Group,
including WACC rates and forward price path;
Assessing the reasonableness of the forecasted future expenses (including the consideration of
any impacts relating to climate change and the impacts of the potential New Zealand Aluminium
Smelter exit in December 2024);
•
• Performing sensitivity analysis on the key assumptions within the model;
• Performing a retrospective review of budgets compared to actual data for prior periods to assess
•
the accuracy and robustness of the forecasting process; and
Evaluating the adequacy of the Group’s disclosures in respect of the valuation of generation
structures and plant.
As a result of the above procedures, we are satisfied that the valuation and key assumptions
applied to estimate the fair value of the generation structures and plant and the disclosures
included in note B1 are reasonable.
Valuation of Level 3 Electricity Derivatives
As explained in note D1, the Group’s activities expose it to commodity price, foreign
exchange and interest rate risks which are managed using derivative financial instruments.
These instruments are carried at their fair value as at 30 June 2023. Fair value measurements are
grouped into three categories based on their inputs into the valuation, with Level 3 derivatives
being the most complex valuation, given that they use significant inputs that do not use directly
observable market data.
At 30 June 2023, Level 3 electricity derivative assets totalled $136 million (2022: $246 million)
and Level 3 electricity derivative liabilities were $107 million (2022: $97 million).
We include valuation of Level 3 electricity derivatives as a key audit matter for the following
reasons:
• The forecast price path used in the valuation of electricity hedges is based on the Group’s
best estimate of the long-term forward wholesale electricity price, which involves significant
judgement and estimates regarding discount factors, expected demand, cost of new
supply, and other relevant market factors; and
The complexity and judgement involved in the valuation techniques and the judgement
involved in evaluating the long-term expected call volumes and discount factor used to
determine the fair value of electricity options and swaps.
•
Our audit procedures focused on:
• The reasonableness of the future NZ wholesale electricity price paths (including the consideration
of any impacts relating to climate change and the impacts of the potential New Zealand
Aluminium Smelter exit in December 2024);
• The reasonableness of the future forecasted generation volumes; and
• The reasonableness of the applied weighted average cost of capital.
Our procedures included:
•
In conjunction with our internal experts, evaluating the appropriateness of the methodology
applied in the valuation models for these electricity hedges, options and swaps and ensuring
that the methodology has been consistently applied with the prior year where appropriate;
• Challenging the key assumptions applied, including the long-term forward wholesale electricity
price, long-term expected call volumes, day one adjustments and discount rates;
• Agreeing underlying data to contract terms, specifically the contract term, price and volumes; and
• Evaluating the adequacy of the Group’s disclosures in respect of the valuation of Level 3
electricity derivatives.
As a result of the above procedures, we are satisfied that the valuation and key assumptions
applied to estimate the fair value of the Level 3 electricity derivatives and the disclosures made
in note D1 are reasonable.
2 4 4
MERIDIAN INTEGRATED REPORT 2023INDEPENDENT AUDITOR’S REPORT Other information
The Directors are responsible on
behalf of the Group for the other
information. The other information
comprises the information included
on pages 1 to 190 and 249 to 255, but
does not include the consolidated
financial statements and our auditor’s
report thereon.
Our opinion on the consolidated
financial statements does not cover
the other information and we do not
express any form of audit opinion or
assurance conclusion thereon.
In connection with our audit of the
consolidated financial statements,
our responsibility is to read the other
information and, in doing so, consider
whether the other information is
materially inconsistent with the
consolidated financial statements or
our knowledge obtained in the audit
or otherwise appears to be materially
misstated. If, based on the work we
have performed, we conclude that
there is a material misstatement of this
other information, we are required to
report that fact. We have nothing to
report in this regard.
Directors’ responsibilities
for the consolidated
financial statements
Auditor’s responsibilities for
the audit of the consolidated
financial statements
The Directors are responsible
on behalf of the Group for the
preparation and fair presentation of
the consolidated financial statements
in accordance with New Zealand
Equivalents to International Financial
Reporting Standards and International
Financial Reporting Standards, and for
such internal control as the Directors
determine is necessary to enable the
preparation of consolidated financial
statements that are free from material
misstatement, whether due to fraud
or error.
In preparing the consolidated
financial statements, the Directors
are responsible on behalf of the
Group for assessing the Group’s
ability to continue as a going concern,
disclosing, as applicable, matters
related to going concern and using
the going concern basis of accounting
unless the Directors either intend
to liquidate the Group or to cease
operations, or have no realistic
alternative but to do so.
The Directors’ responsibilities arise
from the Financial Markets Conduct
Act 2013.
Our objectives are to obtain reasonable
assurance about whether the
consolidated financial statements
as a whole are free from material
misstatement, whether due to fraud or
error, and to issue an auditor’s report
that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with the Auditor-General’s Auditing
Standards will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of shareholders taken on the basis
of these consolidated financial
statements.
As part of an audit in accordance
with the Auditor-General’s Auditing
Standards, we exercise professional
judgement and maintain professional
scepticism throughout the audit.
We also:
•
Identify and assess the risks of
material misstatement of the
consolidated financial statements,
whether due to fraud or error, design
and perform audit procedures
responsive to those risks, and obtain
audit evidence that is sufficient and
appropriate to provide a basis for
our opinion. The risk of not detecting
a material misstatement resulting
from fraud is higher than for one
resulting from error, as fraud may
involve collusion, forgery, intentional
omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal
control relevant to the audit in order
to design audit procedures that are
appropriate in the circumstances, but
not for the purpose of expressing an
opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting
estimates and related disclosures
made by management.
• Conclude on the appropriateness
of the use of the going concern
basis of accounting by the directors
and, based on the audit evidence
obtained, whether a material
uncertainty exists related to events
2 4 5
MERIDIAN INTEGRATED REPORT 2023INDEPENDENT AUDITOR’S REPORT or conditions that may cast significant
doubt on the Group’s ability to
continue as a going concern. If we
conclude that a material uncertainty
exists, we are required to draw
attention in our auditor’s report
to the related disclosures in the
consolidated financial statements or,
if such disclosures are inadequate, to
modify our opinion. Our conclusions
are based on the audit evidence
obtained up to the date of our
auditor’s report. However, future
events or conditions may cause the
Group to cease to continue as a
going concern.
• Evaluate the overall presentation,
structure and content of the
consolidated financial statements,
including the disclosures, and
whether the consolidated financial
statements represent the underlying
transactions and events in a manner
that achieves fair presentation.
• Obtain sufficient appropriate
audit evidence regarding the
financial information of the entities
or business activities within the
Group to express an opinion on the
consolidated financial statements.
We are responsible for the direction,
supervision and performance of
the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Directors
regarding, among other matters,
the planned scope and timing of the
audit and significant audit findings,
including any significant deficiencies
in internal control that we identify
during our audit.
We also provide the Directors with
a statement that we have complied
with relevant ethical requirements
regarding independence, and
to communicate with them all
relationships and other matters that
may reasonably be thought to bear
on our independence, and where
applicable, related safeguards.
From the matters communicated with
the Directors, we determine those
matters that were of most significance
in the audit of the consolidated
financial statements of the current
period and are therefore the key
audit matters. We describe these
matters in our auditor’s report unless
law or regulation precludes public
disclosure about the matter or when,
in extremely rare circumstances, we
determine that a matter should not be
communicated in our report because
the adverse consequences of doing
so would reasonably be expected to
outweigh the public interest benefits
of such communication.
Our responsibilities arise from the
Public Audit Act 2001.
Mike Hoshek, Partner
for Deloitte Limited
On behalf of the Auditor-General
Christchurch, New Zealand
28 August 2023
2 4 6
MERIDIAN INTEGRATED REPORT 2023INDEPENDENT AUDITOR’S REPORT Independent Assurance Report
To the shareholders of Meridian Energy Limited for the year ended 30 June 2023
Report on sustainability content
within the 2023 Integrated Report
nothing has come to our attention
that causes us to believe that:
Board of Directors’ Responsibility
The Board of Directors is responsible for:
Meridian Energy Limited’s Integrated
Report for the year ended 30 June
2023 (the ‘Integrated Report’)
includes sustainability content on
pages 16 to 128, 139, 148 to 157, and
161 to 171 (‘Sustainability Content’)
prepared in accordance with the GRI
Sustainability Reporting Standards
(the ‘GRI Standards’).
The subject of our limited assurance
engagement is the information
included on pages 16 to 128, 139, 148
to 157, and 161 to 171 of the Integrated
Report, prepared in accordance with
Reporting Principles specified in
section 4 of GRI 1: Foundation 2021;
and the disclosures listed in the GRI
index on pages 249 to 253 prepared
in accordance with the GRI standards
(including the GRI’s Electric Utilities
Sector Disclosures) as referenced in
the GRI content index. Our report
does not cover forward looking
statements or online supplements.
Conclusion
This conclusion has been formed on the
basis of, and is subject to, the inherent
limitations outlined elsewhere in this
independent assurance report.
Based on the evidence obtained from
the procedures we have performed;
• The Sustainability Content on pages
16 to 128, 139, 148 to 157, and 161
to 171 of the Integrated Report for
the year ended 30 June 2023, has
not been prepared, in all material
respects, in accordance with the
Reporting Principles specified in
section 4 of GRI 1: Foundation 2021:
being accuracy, balance, clarity,
comparability, completeness,
sustainability context, timeliness,
and verifiability; and
• The disclosures listed on the GRI
content index on pages 249 to
253 have not been prepared, in all
material respects, in accordance
with the GRI Standards as
referenced in the GRI content
index on pages 249 to 253.
Basis for Conclusion
Our engagement has been conducted
in accordance with International
Standard on Assurance Engagements
(New Zealand) 3000 (Revised):
Assurance Engagements Other than
Audits or Reviews of Historical Financial
Information (‘ISAE (NZ) 3000 (Revised)’)
issued by the New Zealand Auditing
and Assurance Standards Board.
We believe that the evidence we have
obtained is sufficient and appropriate
to provide a basis for our conclusion.
• ensuring that the Sustainability
Content is prepared in accordance
with the GRI Standards as set out
in the GRI Content Index;
• determining Meridian Energy
Limited’s objectives in respect of
sustainability reporting;
• selecting the material topics; and
• establishing and maintaining
appropriate performance
management and internal control
systems in order to derive the
Sustainability Content.
Our Independence
and Quality Control
We have complied with the
independence and other ethical
requirements of Professional and Ethical
Standard 1 International Code of Ethics
for Assurance Practitioners (including
International Independence Standards)
(New Zealand)) (‘PES-1’) issued by the
New Zealand Auditing and Assurance
Standards Board, which is founded on
fundamental principles of integrity,
objectivity, professional competence
and due care, confidentiality, and
professional behaviour.
We note that during the period our
systems identified that a non-audit
partner in the same office as the
engagement partner inadvertently
held an interest in the entity for part of
the period, which was rectified prior
to the issuance of this opinion. The
matter does not have an impact on
the financial statements and has not
compromised our objectivity as auditor.
Other than this engagement and our
role as auditor of the statutory financial
statements on behalf of the Auditor-
General, our firm carries out other
assignments for the Group in the areas
of greenhouse gas inventory assurance,
review of the interim financial
statements, audit of the securities
registers, audit of the fixed rate bond
registers, reasonable assurance
engagement for the vesting of the
executive long-term incentive plan,
reasonable assurance of the solvency
return of Meridian Captive Insurance
Limited, gap analysis in regards to
climate related disclosures readiness
programme, and supervisor reporting.
We also carried out non-assurance
assignments for the Group relating
to the Corporate Taxpayers Group
Programme, which are compatible with
those independence requirements.
In addition, principals, and employees
of our firm deal with the Group on
arm’s length terms within the ordinary
course of trading activities of the Group.
These services have not impaired
T
R
O
P
E
R
E
C
N
A
R
U
S
S
A
T
N
E
D
N
E
P
E
D
N
I
2 47
MERIDIAN INTEGRATED REPORT 2023
our independence for the purposes
of this engagement. Other than
these engagements and arm’s length
transactions, we have no relationship
with, or interests in, the Group.
The firm applies Professional and
Ethical Standard 3: Quality Management
for Firms that Perform Audits or
Reviews of Financial Statements, or
Other Assurance or Related Services
Engagements, which requires the firm
to design, implement and operate
a system of quality management
including policies and procedures
regarding compliance with ethical
requirements, professional standards
and applicable legal and regulatory
requirements.
Independent
Accountant’s Responsibility
Our responsibility is to conduct a
limited assurance engagement in order
to express an opinion whether, based
on the procedures performed, anything
has come to our attention that causes
us to believe that the Sustainability
Content has not been prepared, in all
material respects, in accordance with
the GRI Standards.
In a limited assurance engagement,
the assurance practitioner performs
procedures, primarily consisting
of discussion and enquiries of
management and others within the
entity, as appropriate, and observation
and walk-throughs, and evaluates the
evidence obtained. The procedures
selected depend on our judgement,
including identifying areas where the
risk of material non-compliance with
the GRI Standards is likely to arise.
Our procedures included:
• Obtaining an understanding of
the internal control environment,
risk assessment process and
information systems relevant to the
sustainability reporting process;
• A review of the materiality process
followed to determine the material
topics chosen for inclusion in the
Sustainability Content;
• Analytical review and other test
checks of the information presented;
• Checking whether the appropriate
indicators have been reported in
accordance with the GRI Standards;
and
• Evaluating whether the information
presented is consistent with our
overall knowledge and experience of
sustainability reporting processes at
Meridian Energy Limited.
The procedures performed in a limited
assurance engagement vary in nature
and timing from, and are less in extent
than for, a reasonable assurance
engagement. Consequently, the level
of assurance obtained in a limited
assurance engagement is substantially
lower than the assurance that would
have been obtained had a reasonable
assurance engagement been
performed. Accordingly, we do not
express a reasonable assurance opinion
about whether Meridian Energy
Limited’s Sustainability Content has
been prepared, in all material respects,
in accordance with the GRI Standards.
Inherent Limitations
Because of the inherent limitations of
any limited assurance engagement,
it is possible that fraud, error or
non-compliance may occur and not
be detected. A limited assurance
engagement is not designed to detect
all instances of non-compliance with
the GRI Standards as it generally
comprises making enquiries, primarily
of the responsible party, and applying
analytical and other review procedures.
The conclusion expressed in this report
has been formed on the above basis.
A limited assurance engagement does
not provide assurance on whether
compliance with the GRI Standards
will continue in the future.
Use of Report
Our assurance report is made solely
to the directors of Meridian Energy
Limited in accordance with the terms
of our engagement. Our work has been
undertaken so that we might state to
the directors those matters we have
been engaged to state in this assurance
report and for no other purpose.
To the fullest extent permitted by
laww, we do not accept or assume
responsibility to anyone other than the
directors of Meridian Energy Limited for
our work, for this assurance report, or
for the conclusions we have reached.
Chartered Accountants
28 August 2023
Auckland, New Zealand
This limited assurance report relates to
the Integrated Report of Meridian Energy
Limited for the year ended 30 June 2023
included on Meridian Energy Limited’s
website. Meridian Energy Limited is
responsible for the maintenance and
integrity of the Meridian Energy Limited’s
website. We have not been engaged to
report on the integrity of the Meridian
Energy Limited’s website. We accept no
responsibility for any changes that may
have occurred to the Integrated Report
since they were initially presented on the
website. The limited assurance report
refers only to the Integrated Report named
above. It does not provide an opinion on
any other information which may have been
hyperlinked to/from the Integrated Report
If readers of this report are concerned with
the inherent risks arising from electronic
data communication, they should refer to
the published hard copy of the Integrated
Report and related limited assurance report
to confirm the information included in the
Integrated Report presented on this website.
T
R
O
P
E
R
E
C
N
A
R
U
S
S
A
T
N
E
D
N
E
P
E
D
N
I
2 4 8
MERIDIAN INTEGRATED REPORT 2023
GRI Standards content index
Meridian Energy Limited has reported in accordance with the GRI Standards for the period 1 July 2022 to 30 June 2023. GRI 1: Foundation 2021 has been used.
General disclosures
Pg #
Comment
General disclosures
2-15
Conflicts of interest
Pg #
168
GRI 2: General Disclosures 2021
2-1
Organizational details
Front cover
& Directory,
167
166
2-16
Communication of critical concerns
162, 168
2-2
2-3
2-4
2-5
2-6
Entities included in the organization’s
sustainability reporting
Reporting period, frequency and contact point
166, 171
Restatements of information
External assurance
Discussed where relevant
throughout the report.**
247–248
Refer to independent assurance
report.
Activities, value chain and other
business relationships
16–17, 43,
68, 122
Collective knowledge of the highest
governance body
Evaluation of the performance of the
highest governance body
168
Refer to Board Charter (pg3).
Refer to Corporate Governance
Statement Principle 2 and Board
Charter (pg3).
All our energy retailing brands
have very short supply chains
because the physical assets used
to distribute electricity and meter
its use are managed by national
and local lines and metering
companies. Our retail operations’
requirements are similar to those
of many corporate offices. They
include physical facilities and
ICT, sales and marketing, billing
and governance functions. Note
value chain (activities, products,
services and markets served)
information throughout report.
Headcount has been used, not
FTE. Data sourced from the
PayGlobal System as at the end
of the reporting period.
Refer to Corporate Governance
Statement Recommendation 2.5,
Board Charter and Safety and
Sustainability Committee Charter.
Refer to Constitution (pg13-15)
and Board Charter (pg2) plus
further detail in Corporate
Governance Statement.
Refer to Corporate Governance
Statement (pg7).
2-17
2-18
2-19
2-20
2-21
2-22
2-23
2-24
Remuneration policies
Process to determine remuneration
Annual compensation ratio
135
135–136
139
Statement on sustainable development strategy
22-33
Policy commitments
Embedding policy commitments
103–105
105
2-25
Processes to remediate negative impacts
103–105
2-26
Mechanisms for seeking advice and
raising concerns
2-27
Compliance with laws and regulations
2-28
2-29
Membership associations
Approach to stakeholder engagement
148-154
105
41
187
2-30
Collective bargaining agreements
EU standards*
EU1
EU2
EU3
EU4
Installed capacity
Net energy output
Number of customer accounts
Transmission and distribution lines (length
of above and underground transmission and
distribution lines by regulatory regime)
39
38
124
2-7
Employees
85
2-8
2-9
Workers who are not employees
Governance structure and composition
167
99–100,
102,
168–169
2-10
Nomination and selection of the highest
governance body
168
2-11
Chair of the highest governance body
2-12
2-13
2-14
Role of the highest governance body in
overseeing the management of impacts
149–151,
171
Delegation of responsibility for managing impacts 149–150
Role of the highest governance body in
sustainability reporting
149, 161
Comment
Refer to Corporate Governance
Statement.
Critical concerns are raised
with Meridian’s Board either
directly or via an escalation
process. Please refer to the
key risks discussed during the
reporting period on page 162
and the Corporate Governance
Statement (Principle 6).
Refer to 2021 Supplier Code of
Conduct and 2022 Meridian
Modern Slavery Statement.
Refer to Corporate Governance
Statement Principle 1, Meridian
Compliance Policy.
Refer to 2021 Supplier Code of
Conduct.
See throughout report where
relevant. We take a purpose
driven approach.
No staff are covered by collective
bargaining agreements.
Length insignificant.
* Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.
** The sale of Meridian Australia was completed on 31 January 2022. As FY23 is the first full financial year since the sale of Meridian Australia we have
excluded historical data relating to the Australian operations from this report. Refer to Meridian’s Integrated Annual Report FY22 for this information.
2 49
MERIDIAN INTEGRATED REPORT 2023GRI STANDARDS CONTENT INDEX Water stress not tested this FY.
Data is collected by Meridian
and independently audited each
month. There are no priority
substances present in our water
discharge. Total is then split into
water that re-enters the same river
(non-consumptive) and water
that is consumed or diverted
(consumptive). Breakdown of total
water withdrawal and discharge
not categorised by 1000mg/L total
dissolved solids. Excludes Flux. Unit
of measurement megalitres per
GRI standards recommendation
is replaced by cubic millimetres as
per Integrated report to ensure the
precision of data.
Includes central government,
local government, Ngāi Tahu
and other iwi, local community
groups and the general public.
Material topics and associated disclosures
Pg #
Comment
Material topics and associated disclosures
Pg #
Comment
GRI 3: Material Topics 2021
3-1
3-2
Process to determine material topics
148-151
List of material topics
150, 152-156
303-3
303-4
303-5
Water withdrawal
Water discharge
Water consumption
39
39
39
Economic performance
GRI 3: Material Topics 2021
Management of material topics
GRI 201: Economic Performance 2016
54-56, 128,
150–151,
154, 161
See also FY23 Climate-related
Disclosures at meridianenergy.
co.nz/about-us/investors/
governance
201-2
Financial implications and other risks and
opportunities due to climate change
161
Procurement practices and energy
GRI 3: Material Topics 2021
3-3
Management of material topics
112–114,
150–155
GRI 204: Procurement Practices 2016
204-1
Proportion of spending on local suppliers 105
Energy
GRI 3: Material Topics 2021
3-3
Management of material topics
150-156
GRI 302: Energy 2016
302-1
Energy consumption within the
organization
49
Water and effluents
GRI 3: Material Topics 2021
3-3
Management of material topics
GRI 303: Water and Effluents 2018
303-1
303-2
Interactions with water as a shared
resource
Management of water discharge-
related impacts
54-56,
150-155
37-39
37-39
Non-GRI KPIs*
Strength of relationships with
stakeholders interested in water
37–38
Significant locations of
operation are defined as all
Meridian Group operations,
including Flux, in New Zealand.
Source for conversion is
www.eauc.org.uk/file_uploads/
ucccfs_unit_converter_v1_3_1.
xlsx
Biodiversity
GRI 3: Material Topics 2021
3-3
Management of material topics
54–56,
150–153
GRI 304: Biodiversity 2016
304-2
Emissions
Significant impacts of activities,
products and services on biodiversity
41–42,
54–55
Excludes Flux.
GRI 3: Material Topics 2021
3-3
Management of material topics
42–44, 128
GRI 305: Emissions 2016
305-1
305-2
305-3
Waste
Direct (Scope 1) GHG emissions
46
Energy indirect (Scope 2) GHG emissions 46
Other indirect (Scope 3) GHG emissions
46
GRI 3: Material Topics 2021
3-3
Management of material topics
GRI 306: Waste 2020
306-1
306-2
Waste generation and significant
waste-related impacts
Management of significant
waste-related impacts
55, 150–151,
155
47–49
47-48, 55
306-3
Waste generated
49
2 5 0
* Non-GRI – some material topics and disclosures listed above are additional or alternatives to those covered in the GRI Standards.
MERIDIAN INTEGRATED REPORT 2023GRI STANDARDS CONTENT INDEX
Material topics and associated disclosures
Pg #
Comment
Material topics and associated disclosures
Pg #
Comment
306-4
306-5
Waste diverted from disposal
Waste directed to disposal
49
49
Employment
GRI 3: Material Topics 2021
3-3
Management of material topics
114, 150-151,
156
GRI 401: Employment 2016
401-1
401-2
New employee hires and employee
turnover
Benefits provided to full-time employees
that are not provided to temporary or
part-time employees
86
83–84
401-3
Parental leave
85
Occupational health and safety
GRI 3: Material Topics 2021
3-3
Management of material topics
150–156
GRI 403: Occupational Health and Safety 2018
403-1
Occupational health and safety
management system
89–92
403-2
403-3
403-4
403-5
403-6
403-7
403-8
Hazard identification, risk assessment,
and incident investigation
Occupational health services
Worker participation, consultation,
and communication on occupational
health and safety
Worker training on occupational
health and safety
Promotion of worker health
Prevention and mitigation of
occupational health and safety impacts
directly linked by business relationships
Workers covered by an occupational
health and safety management system
89–92
89–92
89–92
89–92
89–92
89–92
New Zealand is our significant
location of operation and
have not captured the 3
Flux UK employees.
Meridian operates a
comprehensive OH&S
Management System which
is audited externally annually
with respect to NZS 7901:2008
as required by the Electricity
(Safety) Regulations 2010. A
gap analysis was undertaken
in FY22 by PwC with respect to
ISO 45001 with no significant
gaps identified. A gap analysis
was undertaken internally in
FY23 with respect to ISO 45003,
a complementary guideline
covering management of
psychosocial risk. Continuous
improvement of our system in
FY23 included a full review of all
our critical risks and configuring
and implementing the improved
OHSMS software system to
capture and manage events,
observations, actions and
learnings. Planned completion of
ISO 45001 accreditation in FY23
has been moved to FY24.
100% of employees and
contractors working on Meridian
sites and assets are covered by
the OHS management system.
Legal requirements are set
out in the Health and Safety at
Work Act 2015, and associated
regulations.
403-9
403-10
Work-related injuries
Work-related ill health
89–92
89–92
Training and education
GRI 3: Material Topics 2021
3-3
Management of material topics
112–114,
150–151, 156
GRI 404: Training and Education 2016
404-1
404-2
404-3
Average hours of training per year
per employee
86
Programs for upgrading employee skills
and transition assistance programs
88–89
Percentage of employees receiving
regular performance and career
development reviews
87
Diversity and equal opportunity
GRI 3: Material Topics 2021
3-3
Management of material topics
114, 150–151,
156
GRI 405: Diversity and Equal Opportunity 2016
405-1
Diversity of governance bodies
and employees
99–100
100% employees and contractors
working on Meridian sites and
assets are covered by and work
within the parameters of the OHS
management system, which
is outlined in our Safety and
Wellbeing Manual. Flux permanent
employees and contractors are fully
covered by Flux’s health and safety
management system.
Excludes Flux employees.
All of our information and
processes include all workers
on our sites, employees and
contractors.
* Non-GRI – some material topics and disclosures listed above are additional or alternatives to those covered in the GRI Standards.
** Disclosures starting with “EU” are from G4 Electric Utilities Sector Disclosure.
2 51
MERIDIAN INTEGRATED REPORT 2023GRI STANDARDS CONTENT INDEX Comment
Material topics and associated disclosures
Pg #
Comment
Material topics and associated disclosures
405-2
Ratio of basic salary and
remuneration of women to men
Pg #
101
Non-discrimination
GRI 3: Material Topics 2021
3-3
Management of material topics
114, 150–151,
156
GRI 406: Non-discrimination 2016
406-1
Incidents of discrimination and
corrective actions taken
There have been no incidents
of discrimination in FY23.
Child labour
GRI 3: Material Topics 2021
3-3
Management of material topics
113, 150-151,
154
GRI 408: Child Labour 2016
408-1
Operations and suppliers at significant
risk for incidents of child labor
103-104
Refer to our Modern Slavery
Statemen 2022.
Forced or compulsory labour
GRI 3: Material Topics 2021
3-3
Management of material topics
113, 150–151,
154
GRI 409: Forced or Compulsory Labor 2016
Non-GRI KPIs*
Contribution to local communities in
New Zealand
106-109
Non-GRI KPIs* Number of community fund grants in
106
New Zealand
Public policy
GRI 3: Material Topics 2021
3-3
Management of material topics
56, 150–156
GRI 415: Public Policy 2016
415-1
Political contributions
Pipeline of generation options
GRI 3-3
Management of material topics
76-77
EU10**
Planned capacity against demand
26
Meridian does not donate
to any political parties (as
specified in our 2023
Group Code of Conduct.
Significant locations of operation
are defined as all Meridian Group
operations, including Flux, in
New Zealand.
Pipeline projections are
estimations subject to internal
funding approval and final
design (which includes resource
consent conditions).
409-1
Operations and suppliers at significant risk
for incidents of forced or compulsory labor
103–104
Refer to our Modern Slavery
Statement 2022.
Plant performance
Local communities
GRI 3: Material Topics 2021
3-3
Management of material topics
113, 150–151,
155
Significant locations of operation
are defined as all Meridian Group
operations, including Flux, in
New Zealand.
GRI 413: Local Communities 2016
413-1
Operations with local community
engagement, impact assessments,
and development programs
106-109
100% of our power stations have
local community engagement
programmes.
Engagement plans are developed
for all our development projects.
Social and environmental
impacts are disclosed through
impacts/materiality process
via annual report. We have a
formal grievance process for
local communities, available
through community engagement
manager, details available
at meridianenergy.co.nz/
community-support. Complaints
for customer is available at
meridianenergy.co.nz/complaints
GRI 3-3
Management of material topics
EU30**
Plant availability factor
Financial performance
76-77,
150-155
39
GRI 3-3
Management of material topics
150–155
Non-GRI KPIs*
Various financial measures
32
Financial impacts of hydrology
GRI 3-3
Management of material topics
Non-GRI KPIs*
Financial implications of variability
in hydrology
Action on climate change
GRI 3-3
Management of material topics
76–77,
150–152
32, 163
Non-GRI KPIs*
Proportion of Meridian Group generation
from renewable resources
2 5 2
* Non-GRI – some material topics and disclosures listed above are additional or alternatives to those covered in the GRI Standards.
MERIDIAN INTEGRATED REPORT 2023GRI STANDARDS CONTENT INDEX Material topics and associated disclosures
Pg #
Comment
Material topics and associated disclosures
Pg #
Comment
Non-GRI KPIs*
Support for customers’ climate actions
23, 42–43,
76–77,
150–159
Non-GRI KPIs*
Support for our people’s climate actions
42-44
Non-GRI KPIs* Operational emission-reduction target
42-44
Employee engagement
GRI 3-3
Management of material topics
112–114,
150–156
Non- GRI KPIs*
Employee engagement surveys
98
Customer satisfaction
GRI 3-3
Management of material topics
Non-GRI KPIs*
Level of customer satisfaction –
brand monitor
Non-GRI KPIs*
Customer retention rates
Electricity pricing
GRI 3-3
Management of material topics
Non-GRI KPIs*
Price of electricity in NZ compared
to other OECD countries
Non-GRI KPIs*
Customer sales volume
Support for vulnerable customers
GRI 3-3
Management of material topics
Non-GRI KPIs*
Disconnections
Process safety
112–114,
150–156
125
125
128
110
124
112, 150–151
110
GRI 3-3
Management of material topics
112, 150
Non-GRI KPIs*
Actions to improve process safety
89–92
Dam safety
GRI 3-3
Management of material topics
112,
150-153
Non-GRI KPIs*
Actions to improve dam safety
92
See also Meridian’s Climate
Action Plan August 2023 at
meridianenergy.co.nz/about-
us/investors/sustainability
Information security
GRI 3-3
Management of material topics
150–151, 156
Non-GRI KPIs*
Actions to improve information security
75, 77, 156
FY23 Climate-related Disclosure
report at meridianenergy.
co.nz/about-us/investors/
sustainability/climate-
disclosures
Corporate Governance
Statement meridianenergy.
co.nz/about-us/investors/
governance
* Non-GRI – some material topics and disclosures listed above are additional or alternatives to those covered in the GRI Standards.
2 5 3
MERIDIAN INTEGRATED REPORT 2023GRI STANDARDS CONTENT INDEX Directory
Registered office
Meridian Energy Limited
287-293 Durham Street North
Christchurch Central
Christchurch 8013
New Zealand
PO Box 10840
The Terrace
Wellington 6143
New Zealand
T +64 4 381 1200
F +64 4 381 1201
Offices
Level 11, NTT Tower
157 Lambton Quay
Wellington, 6011
PO Box 10840
The Terrace
Wellington 6143
New Zealand
T +64 4 381 1200
F +64 4 381 1201
Quad 7, Level 2
6 Leonard Isitt Drive
Auckland Airport
Auckland 2022
New Zealand
PO Box 107174
Auckland Airport
Auckland 2150
New Zealand
T +64 9 477 7800
287-293 Durham Street North
Christchurch Central
Christchurch 8013
New Zealand
PO Box 2146
Christchurch 8140
New Zealand
T +64 3 357 9700
Corner of Market Place
and Mackenzie Drive
Twizel 7901
New Zealand
Private Bag 950
Twizel 7944
New Zealand
T +64 3 435 9393
Flux Federation
Registered offices
Level 17, 1 Willis Street
Aon Centre
Wellington 6011
New Zealand
5th Floor
125 Colmore Row
Birmingham B3 3SD
United Kingdom
Powershop
427 Queen Street
Masterton 5810
New Zealand
PO Box 392
Masterton 5810
New Zealand
T +64 0800 100 060
Share Registrar New Zealand
Computershare \
Investor Services Limited
Level 2
159 Hurstmere Road
Takapuna
Auckland 0622
New Zealand
Private Bag 92119
Victoria Street West
Auckland 1142
New Zealand
T +64 9 488 8777
F +64 9 488 8787
enquiry@computershare.co.nz
investorcentre.com/nz
Share Registrar Australia
Computershare
Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford
VIC 3037
Australia
GPO Box 3329
Melbourne VIC 3001
Australia
T 1800 501 366 (within Australia)
T +61 3 9415 4083 (outside Australia)
F +61 3 9473 2500
enquiry@computershare.co.nz
Auditor
Mike Hoshek, Partner
Auditor of the Group Financial
Statements on behalf of the
Auditor-General
Jason Stachurski
Limited assurance on the sustainability
content in the Integrated Report in
accordance with the GRI Standards
Deloitte Limited
151 Cambridge Terrace
Christchurch 8013
New Zealand
Banker
Westpac Wellington
New Zealand
Directors
Mark Verbiest, Chair
Mark Cairns
Graham Cockroft
David Carter
Michelle Henderson
Julia Hoare
Nagaja Sanatkumar
Tania Simpson
Executive Team
Neal Barclay, Chief Executive
Chris Ewers
Lisa Hannifin
Nic Kennedy
Tania Palmer
Bharat Ratanpal
Mike Roan
Claire Shaw
Jason Stein
Guy Waipara
Jason Woolley
2 5 4
If you have any questions or comments, please email investors@meridianenergy.co.nz or service@meridianenergy.co.nz
MERIDIAN INTEGRATED REPORT 2023 Construction underway at Harapaki Wind Farm, Hawke's Bay. ►
Meridian Energy Limited.
Integrated Report 2023.
Meridian is committed to updating
and improving the accessibility
of our information. We have
worked to incorporate accessibility
standards to this document to
improve the reader experience.
meridian.co.nz