A shift
in energy
MERIDIAN ENERGY LIMITED
INTEGRATED REPORT 2024
Our purpose is clear
The transition to a resilient net zero
economy is gathering pace. Meridian
took several steps during the year
to deliver on our strategy – from
securing the long-term future of
New Zealand’s Aluminium Smelter
(NZAS) with an agreement that
supports a more renewable
and flexible electricity system,
to significantly growing our
renewable pipeline and enhancing
the performance of our assets.
Our confidence in delivering on
our purpose has grown. We’ve
progressed work to shape our new
future as a retailer of electricity,
putting our customers at the heart
of our goal to deliver cleaner,
cheaper energy solutions. We’ve
set a nature-positive ambition and
we're growing our cultural capability
to maximise the positive impacts
for people and the planet as we
deliver clean energy for a fairer
and healthier world.
A SHIFT IN ENERGY
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Contents
04
About this report
06
Chair and Chief Executive Report
07
A strong return on our
climate-focused strategy
08
Grow renewable generation
10
Deliver cleaner, cheaper energy
11
Deliver operational excellence
12
Grow capability and culture
14
Overview and Strategy
14
The right resources
16
Our strategy
18
Grow renewable generation
22
Our path to a resilient,
net zero future
22
A new growth curve emerges
23
Delivering on 7 in 7
24
Increasing our national capacity
26
Continued net zero commitment
supports our strategy
27
Securing long-term access
to water
28
Groundbreaking new
contract with NZAS
28
Our partnership with
Southern Green Hydrogen
30
Case study: Innovating how
we meet peak demand
32
Deliver cleaner, cheaper energy
36
Evolving our retail role
36
Electrifying transport and heat
38
Our Decarbonisation Fund grows
39
Setting our compass on customers
and increasing social good
41
Digital and data driven
customer experiences
42
Deliver operational excellence
46
Hedging products in demand
46
Getting more from our assets
47
Advocating for the planet
48
Flux refocuses
48
Data is key to delivering
competitive market offerings
50 Case study: Harapaki is
already proving a success
52
Grow capability and culture
56
A culture of care
58
Investing in safety
60
Enriching our worldview
62
Sustaining our competitiveness
65
Forever Forests on track
66
About us
68
Our Board
69
Our Executive Team
70
How we create value
71
Our commitment to
effective governance
72
Our material impacts
74
Policies, commitments
and targets' progress table
81
Remuneration Report
82
Report from the Chair of
the People, Remuneration
and Culture Committee
84
Remuneration governance
84
Remuneration policy
87
Key performance summary
90
Chief Executive remuneration
94
Meridian share ownership
94
ESG disclosures
95
Remuneration bands
96
Director remuneration
98
Further disclosures
114
Financial statements
168
Assurance reports
168
Financial statements
audit report
172
Sustainability disclosures
assurance report
174
GRI content index
178
Directory
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About
this report
Our strategy reflects the
urgency we feel to play our
part to advance our country’s
transition to a net zero future.
This Integrated Report reviews
our financial, economic, social and
environmental performance for the
year ended 30 June 2024 (FY24)
and how we’ve created value for
the short, medium and long term.
This year, in line with our strategic
aim to take an all-encompassing
focus on climate action, we've
delivered on our ambitions to
develop more renewable generation,
provide cleaner, cheaper energy,
operate with excellence, and grow
our capability and culture.
The Board has established processes to
ensure the quality and integrity of the
annually produced Integrated Report,
and has entrusted Management with
preparing and presenting it.
The Report covers the performance
of all members of the Meridian
Group1, which comprises of our
Meridian Energy and Powershop
brands, Dam Safety Intelligence in
New Zealand and Flux Federation, our
electricity retailing software business
that operates in New Zealand and
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).
1
See Note E1 Subsidiaries and other
interests of the Financial Statements.
This Integrated Report is dated 27 August 2024 and
has been signed on behalf of the Board by:
Mark Verbiest
Chair
Julia Hoare
Chair, Audit and Risk Committee
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A SHIFT IN ENERGY
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This Report has been prepared
using the International Integrated
Reporting Framework and the 2021
Global Reporting Initiative (GRI)
Standards. Deloitte has provided
limited assurance for GRI disclosures
as identified in the GRI Content
Index. The financial statements have
been prepared using appropriate
financial reporting standards and
have been assured by Deloitte on
behalf of the Auditor-General.
OTHER DOCUMENTS IN OUR
INTEGRATED REPORTING SUITE
Integrated Report Data Pack
bit.ly/4devDzs
Climate Action Plan
bit.ly/4fyAbBZ
Climate-related Disclosures
bit.ly/3SzilVK
Corporate Governance Statement
bit.ly/3Wy4sse
Greenhouse Gas Emissions
Inventory bit.ly/3LUqgcs
Modern Slavery Statement
bit.ly/3LUdSJw
Technicians working at West Wind Farm, Te Whanganui a Tara Wellington.
MARK VERBIEST
Chair
NEAL BARCLAY
Chief Executive
Aligning
all our
actions
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This year we’ve made significant progress
on our strategic commitment to an
all-encompassing focus on climate action.
DIVIDEND DATES
5 September 2024
Record date
4–10 September 2024
Dividend Reinvestment Plan
price determination period
20 September 2024
Dividend paid and new
shares issued under the
Dividend Reinvestment Plan
Our ‘7 in 7’ renewable build
programme is well advanced,
with the Harapaki Wind Farm now
completed, the Ruakākā Battery
Energy Storage System (BESS) due
for completion in early 2025 and
several other wind and solar projects
at advanced stages of development.
We’ve finalised groundbreaking
new contracts with New Zealand’s
Aluminium Smelter (NZAS) that
provide much-needed certainty
for the entire electricity sector and
will underpin further investments in
renewable energy. We’ve continued
the work to shape what the next
generation of retail means for
our customers and our business.
And we’ve set long-term emission
reduction targets and advanced work
on our nature-positive ambition, that
anchors our sustainability performance
to ambitious long-term goals.
A strong return on our
climate-focused strategy
The business continues to deliver
well for our shareholders. Increased
electricity generation, prudent
wholesale pricing and trading by
our wholesale team, and increased
growth in retail customer sales have
all contributed to a great financial
result. Meridian Energy has reported
operating cash flows of $667 million
for the year ending 30 June 2024,
up from $509 million the previous
year, with net profit after tax up
from $95 million to $429 million.
The growth in net profit after tax
was influenced significantly by net
gains on hedge instruments of
$249 million in the 2024 financial
year. In the prior year the company
recorded net losses on hedge
instruments of $351 million. EBITDAF2
was up 16% to $905 million and
underlying net profit3 rose 14%
to $358 million. Both of these are
non-GAAP measures.
The strong and improved operating
result was driven by higher customer
sales and positive wholesale trading
results. At the same time, the
company invested $349 million in
new and existing generation assets.
The Board declared a final ordinary
dividend of 14.85 cents per share.
This brings the total ordinary
dividends declared in FY24 to
21.00 cents per share.
The Board has approved continuation
of the Dividend Reinvestment Plan at
a 2% discount.
The company notes that, while the
operating result for the last financial
year was strong, the operating
environment shifted dramatically
during June as an extended drought
emerged. Inflows into Meridian’s
hydro catchments from May 2024
through to mid-August 2024 have
been the lowest on record. As a result,
the 2025 financial year currently looks
to be far more challenging.
2
Earnings before interest, tax, depreciation,
amortisation, unrealised changes in fair value
of hedges, impairments and gains or losses
on sale of assets.
3
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.
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GROW RENEWABLE
GENERATION
A groundbreaking 20-year
agreement with Rio Tinto
It was very pleasing to settle the
uncertainties around the aluminium
smelter at Tiwai Point. At the end of
May 2024 we announced a package
of long-term contracts with NZAS
for part of the smelter’s electricity
needs for a further 20 years. These
contracts end a long and very
stressful period of uncertainty
for many people in Southland.
They also provide much needed
certainty for the electricity sector
and will facilitate more investment in
renewable energy across the motu.
Importantly, the smelter owners
are showing how large industrial
businesses can thrive in Aotearoa,
leveraging our highly renewable
electricity system to create low-
carbon sustainable products,
high-value jobs and economic
growth for New Zealand.
The package itself comprises two key
elements: a long-term, fixed-price
contract for wholesale electricity; and
a demand response agreement.
The core fixed-price energy contract
will reduce in stages from a net
472MW to 377MW as at 1 January
2025. NZAS has negotiated directly
with two other parties to meet the
remainder of its energy needs. The
pricing in the contract is sustainable
and allows for price escalation at
CPI if the international market for
aluminium also escalates.
The demand response element of this
new agreement is groundbreaking, as
it will provide new levels of flexibility
to support the electricity system
when the country’s hydro storage is
low. Flexibility of this scale advances
decarbonisation because it reduces
the country’s reliance on burning coal
to meet seasonal electricity demand.
Our ambitious development
programme is on track
This year, and against the odds
given the challenges of cyclones
and storms, Harapaki, the 176MW
wind farm located in Hawke’s Bay,
and the first of our 7 in 7 projects,
began generating on time and was
delivered within budget. The 100MW
peak and 200MWh (2 hours) grid-
scale BESS at Ruakākā Energy Park,
near Whangārei, is expected to be
online by early 2025. Its introduction
will support stable grid operations by
enabling us to store energy during
low-demand times of the day then
inject it back into the grid at peak
demand times.
We have a range of other wind,
solar and battery projects at the
advanced stages of design. This is
important because we estimate
that by 2050, for Meridian to deliver
our share of the country’s renewable
energy needs, we’ll need to build
the equivalent of 20 Harapaki-sized
renewable generation assets. That’s
a huge and exciting challenge for
our business. We’ve resourced
up accordingly and we're getting
on with it.
The importance of
collaboration and partnership
Most ambitious large infrastructure
projects have an inherent tension
between the localised effects of the
projects and the national priorities
and/or economic advantages they
create. Our experience at Meridian
tells us clearly that the current
Resource Management System has
become far less efficient in the past
decade or so and burns unnecessary
time and money. So, while we note
the credible public concerns about
the new Fast-track Approvals Bill
for new infrastructure, we must see
a more efficient decision-making
process for the allocation of natural
resources in New Zealand. We
believe the Bill can deliver a more
efficient process whilst still ensuring
adequate environmental and
community safeguards.
The most significant project Meridian
currently has in the consenting
process is the reconsent of the
Waitaki Hydro Scheme. We lodged
the reconsent application with
Environment Canterbury (ECAN) in
July 2023. This project was publicly
notified in July 2024 and ECAN has
formally agreed to refer the project
directly to the Environment Court.
Before lodging we worked with a
wide range of people.
... we estimate that, for Meridian to meet its
share of the country’s renewable energy needs
by 2050, we’ll need to build the equivalent of
20 Harapaki-sized renewable generation assets.
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This collaboration has been
valuable in building rapport and
aligning interests. It’s important
that we address the key impacts of
this important scheme and grow
our relationships with both iwi,
communities and other stakeholders
to ensure it remains a corner-stone
of the country’s electricity system
long into the future for the benefit
of all New Zealanders.
Partnership itself is a learning curve
and as a modern New Zealand
company we understand that
partnership is a commitment for the
long term. We also recognise the
unique positions that iwi and hapū
play in our various developments,
and we note they have been
generous and welcoming in their
manaakitanga. Our projects are all
the better for their involvement.
The most significant
project Meridian
currently has in the
consenting process
is the reconsent of the
Waitaki Hydro Scheme.
View of Lake Benmore from Benmore Peninsula, Waitaki Valley.
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DELIVER CLEANER,
CHEAPER ENERGY
Aiming to lift 5,000
households out of hardship
In the pursuit of decarbonisation, as a
country we must ensure the transition
does not disadvantage people who
are struggling with energy hardship.
We are committed to supporting
our most vulnerable customers, so
this year we’ve expanded our Energy
Wellbeing Programme beyond its
initial pilot, with the goal of helping
5,000 Meridian and Powershop
households out of energy hardship.
This has built on the Board’s signing
off of a $5 million investment over a
minimum of two years to assist those
who are finding it difficult to pay for
their power and heat their homes.
To date, through this programme,
we’ve helped over 1,400 customers.
This project aligns well with the ‘fairer’
part of our company purpose, and
we’re immensely proud of the work
we’re doing to make a meaningful
and sustainable difference for
households in hardship.
Rewarding residential
customers who work with us
As the electricity system evolves
into an even more renewable one,
it creates opportunities for customers
to participate by enabling them
to move energy use throughout
the day or removing energy use
completely. The new demand
response agreement with NZAS is
a great example and these kinds of
opportunities are also becoming
available for small business and
residential customers. We’re putting
a lot of effort into introducing a new
retail model, using new technology
to evolve our retail propositions.
We're creating opportunities for all
our customers to be involved by way
of reducing consumption sensibly
at times when they don’t necessarily
need to consume all the power they
normally would, and using that power
to balance demand across the grid.
Importantly, where customers can be
flexible they can also be financially
rewarded, reducing their overall
energy costs.
Industrial decarbonisation
beats our target
The industrial use of fossil-based
fuels, particularly for process heat
(where heat is used in industrial
processes), remains a significant
contributor to our country’s
greenhouse gas profile.
Fortunately, more and more
companies are making a
commitment to decarbonisation.
A great example is Meridian’s
partnership with Fonterra,
announced in January 2024.
The agreement will assist Fonterra
to replace a coal-fired boiler with
a new, 20MW electrode boiler at
its Edendale site in Southland. All
up, our Process Heat Electrification
Programme has exceeded targets
again this year, with 525GWh (to
date) of process heat conversion
from fossil fuels to electricity now
fully committed. The pipeline for
further conversions is substantial
and by 2030 we expect to support
enough electric conversions to
remove around 140,000tCO2e
annually from the environment,
when all contracts are completed.
In the past year, 168 companies have
purchased more than 863GWh
of Renewable Energy Certificates
(RECs) from Meridian. This is an
increase of 35% on the last financial
year, with no signs of slowing.
Through the purchase of RECs, our
customers’ consumption volume is
matched to our 100% renewable
generation, allowing the customers
to offset the RECs against their
Scope 2 emissions. To round out the
environmental benefits, Meridian
has committed to invest 100% of
the net proceeds from the sale of
RECs into community and business
decarbonisation funds. This year our
funds distributed $1.42 million to
decarbonisation projects nationwide.
...by 2030 we expect
to support enough
electric conversions
to remove around
140,000tCO2e
annually from the
environment...
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DELIVER OPERATIONAL
EXCELLENCE
Important gains in
our existing capacity
Alongside our renewable development
programme, we’ve been making
important changes in how we
operate our generation assets.
We’ve increased peaking capacity
at both our Manapōuri and
Benmore Power Stations, giving
us more than 15MW of additional
capacity to support the electricity
system over daily peak periods.
We’re also changing our maintenance
regimes to, wherever possible, avoid
outages in peak periods of the day
and optimise the flexibility of outages
to undertake maintenance and ensure
electricity supply over winter. And
we’re looking at our existing assets
through a new lens to establish where
major enhancements can deliver more
peak megawatts and more energy.
We’re optimistic that there is significant
further peaking capacity and energy
to be extracted from more of our
existing assets in the years ahead.
Our Manapōuri automation and
mechanical programmes became
complex with transformer failures
in November 2022 and July 2023.
We secured a new transformer with
expedited delivery, and worked with
the manufacturer to establish the
root cause of the failures and where
possible undertake improvements or
repairs. Unfortunately the root cause
remains unclear and improvements
were not successful, so we’re now
pursuing additional replacements.
Post financial year –
winter update
While the operating result for the
last financial year was strong, the
operating environment shifted
dramatically during June as an
extended drought emerged. As a
result, the 2025 financial year currently
looks to be far more challenging.
Record low inflows into Meridian’s
hydro catchments from May 2024
through to mid-August 2024 have
combined with a shortage of gas
and unseasonally low wind, causing
wholesale prices to lift materially.
Meridian quickly called on the
hedge arrangements available to us
to ensure our lakes were managed
within consent conditions and to
maintain the security of supply.
The wider sector took several
steps including exercising demand
response options, buying gas from
Methanex for electricity generation,
and securing access to contingent
hydro storage should we need it.
At the time of publication, these
actions resulted in wholesale prices
reducing by more than half from
their peaks, although prices were
still sitting above $300/MWh.
While a very small number of
electricity users have direct
exposure to the wholesale market,
unfortunately, some have been
significantly impacted. It’s a tough
economic environment and this is
not an outcome this sector wants
for any business. Less than 0.01%
of Meridian customers have been
affected by these wholesale prices.
Meridian’s residential customers,
being on fixed prices, were shielded
from wholesale market fluctuations.
Meridian looked after our larger
commercial and industrial customers
rolling off their existing contracts
by offering to extend their current
pricing through to 1 November 2024.
The impact of this activity will be
outlined in future operating results.
Meridian’s ability to manage through
this situation is sound and our
balance sheet is geared to provide
for this eventuality.
We’ve increased peaking capacity
at both Manapōuri and Benmore,
giving us more than 15MW of
additional capacity...
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GROW CAPABILITY
AND CULTURE
Focusing on ESG
performance for the long term
This year we set a target to reduce
our scope 1 and 2 GHG (greenhouse
gas) emissions by 90% by FY40 from
an FY21 base year. We also set a target
to reduce our scope 3 emissions by
90% by FY50 from the same base
year. These targets are consistent
with our purpose, our strategy and
our focus on doing our part to limit
global warming. While a challenge,
it was a natural extension of our
‘Half by 30’ operational emissions
reduction target.
The Half by 30 programme gave us
the impetus to purchase the world’s
first electric hydrofoil ferry to replace
our current boat at Manapōuri. This
will arrive in the next financial year
and will remove around 240 tCO2e
from our operations. Other areas of
our Half by 30 programme remain
more challenging, and include
managing the growth of emissions in
our supply chain and from flying and
further reducing the emissions on
farmland we own. The culture of the
Meridian team, however, is such that
we continue to push hard to innovate
and adapt our behaviours to meet
these important mid-term goals.
This year we advanced work
supporting our nature-positive
ambition, developing the roadmap
to guide our work and choices from
here. Our investment in nature
to date has been significant, but
we believe we can do better. If
achieved, this commitment will
support our consenting processes
and give investors, customers
and communities even greater
confidence in Meridian as a leader
in sustainability and a developer
of new renewable generation.
Pleasingly, Meridian was again
included in the Dow Jones
Sustainability Asia Pacific Index, an
independent global S&P Index that
ranks our ESG performance against
like companies in that region. It
provides independent validation
of our ESG performance for our
stakeholders and assists in attracting
a cohort of international institutional
investors to our share register.
Adapting our ways of working
to deliver on our strategy
Like all businesses, at Meridian
we need to be increasingly agile to
keep pace with what our customers
need to help drive the transition
to a net zero future. We need
to make the best use of highly
engaged teams, technology and
data to grow our market share and
intelligently meet the increasing
demands on the electricity system.
Not surprisingly, data and artificial
intelligence (AI) are starting to
drive more of our processes and
accelerate our decision-making.
Customers are demanding efficient
and smart digital service propositions
to save them time and money.
And as we discussed earlier, a new
raft of technology solutions will
help customers to manage their
demands within the overall system
in ways that improve system
efficiency and ultimately save
them money.
Our wholesale business will benefit
from digital solutions that help us
better manage transactions and
automate more of our trading and
hydraulic management decisions to
achieve more efficient outcomes.
Similarly, for our Generation teams,
we’re starting to use data to better
target asset management and to
co-ordinate downtime with fewer
impacts on customers. As we
push our generation assets to do
more, the ability to make informed
decisions on asset management has
all sorts of potential payoffs in the
ways that we best use the natural
resources that power our business.
Ultimately, aligning our retail,
development, wholesale, ICT and
corporate functions is all about
synchronising the many moving
parts it takes to speed up our
delivery. One of our core values at
Meridian is to ‘Be in the waka’.
It signals we are one team and
when we all pull in the same
direction we create great outcomes.
Experienced leadership
We continue to have a stable,
experienced and highly capable
Executive team at Meridian. There
has been only one change in
our Executive Team in the past
year: Nic Kennedy resigned as
CEO of Meridian’s subsidiary,
Flux Federation. Meridian’s Chief
Information Officer, Bharat Ratanpal,
has been seconded as Interim CEO
to lead the Flux business through
the next phase of its development.
While Bharat works with the Flux
business, Edna Maddocks, one of
our ICT team leaders, has stepped
in to lead Meridian’s ICT team. We
would like to acknowledge Nic’s hard
work in getting Flux to this point.
The Board members are also highly
experienced governors with extensive
and varied sector experience that
enables them to bring a range of
perspectives to the oversight of
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Meridian’s strategy. For the Board,
we were pleased to welcome
David Carter as a Non-Executive
Director. Our thanks and best wishes
to Mark Cairns who, after a long
tenure, retired at our last Annual
Shareholder Meeting.
Everyone stands to gain
The strengthening of our commitment
to deliver on our strategy and help
decarbonise Aotearoa’s economy is
changing how we do business on
many fronts. Our teams are tackling
issues in new and refreshing ways.
The use of data is enabling much of
the change and helping us to enhance
our brand, our customer propositions
and our generation assets.
Extending demand response
opportunities to smaller business and
residential customers will incentivise
many Kiwis to change how they
manage power consumption whilst
assisting greatly with the management
of system demand peaks.
In a global trading environment
where energy use is under
increasing scrutiny, more than ever
we are convinced that Aotearoa’s
highly renewable electricity system
can be a significant source of
competitive advantage for our
country. New Zealand has a once-
in-a-generation opportunity to
grow our economy by leveraging
our renewable energy advantage
to build low carbon intensive
products for export, delivering
more high-value jobs and greater
prosperity for all Kiwis. At Meridian
we’re determined to play a role in
this transition by fostering long-term
partnerships with the iwi, industry,
customers and communities, who
remain the key to building a
shared future.
Finally, our investors should take
from our results that the pursuit
of our purpose can indeed be
achieved with competitive returns.
On behalf of the Board and the
Executive Team, ngā mihi to our
customers, the communities in
which we work, our partners and
our investors. And to our talented
Meridian team, thanks for doing
the mahi to ensure we continue
to deliver on our purpose and
aspiration to deliver “clean energy
for a fairer and healthier world”.
...our investors should take from our
results, the message that the pursuit
of our purpose can indeed be
achieved with competitive returns.
Solar installation at Waipuna Community Services, Ōtautahi Christchurch.
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The right resources
Meridian Energy is a 100% renewable energy
generator. We’re one of Aotearoa New Zealand’s
largest organisations, employing over 1,000 people.
WIND
WATER
SUN
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Highlights
NET ASSETS
FY24 OPERATING REVENUE
TOTAL MARKET CAPITALISATION
FY24 EBITDAF*
$8.2b
$4.9b
$16.3b
$905m
ONE OF AOTEAROA NEW ZEALAND’S LARGEST ORGANISATIONS
Kiwi
MAJORITY OWNED
BY THE NZ GOVERNMENT
NZX + ASX
LISTED
10%
LEGISLATED MAXIMUM
NON-CROWN OWNERSHIP
BY ANY PERSON
* 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.
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Our
strategy
Meridian’s purpose,
Clean Energy for a Fairer
and Healthier World,
means we are committed
to contributing meaningfully
to the transition to a net zero
and climate-resilient future.
Meridian’s business model is focused
on creating short-, medium- and long-
term value by generating electricity
from renewable energy sources (wind,
water and sun) and retailing electricity
to customers. We’ve continued to
build on our electricity-generation
heritage with further renewable
generation investments and targeted
decarbonisation offers to customers
to help reduce their emissions in
transport and process heat.
Climate-related risks and opportunities
for Meridian are driven by two factors:
physical impacts such as storms and
floods and more gradual climatic
changes; and the economic and
societal transitional effects of the
world moving towards a lower-carbon
future. We also see great potential in
the opportunities that transitioning
to a low-carbon economy will
provide for New Zealand. We’re in a
unique position here in Aotearoa, as
our renewable-energy abundance
gives us a significant advantage
when it comes to this transition. Our
climate-related disclosures provide
comprehensive analysis of the risks
and opportunities for Meridian’s
business as a result of the transition.
Climate-related Disclosures
bit.ly/3SzilVK
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Our strategy map
Te kaupapa
Our purpose
Clean energy for a fairer and healthier world
Te rautaki
Our strategy
An all-encompassing focus on climate action
Te kaupapa
matua
Our priorities
Grow renewable
generation
Deliver cleaner,
cheaper energy
Deliver operational
excellence
Grow capability
and culture
Te arotahinga
Our focus
To speed our path to a
resilient, net zero future
Through innovation that
unlocks value for customers
So everything we do aligns
to deliver on our goals
Because how we do the mahi is
what will make the real difference
Te mahi
Our key
initiatives
• Accelerate Aotearoa New Zealand’s
decarbonisation by delivering scale
energy projects at pace:
– Build renewable
generation options.
– Deliver on our 7 in 7.
– Secure long-term access
to water.
– Accelerate electrification of
transport and process heat.
• Grow system flexibility:
– Grow our dispatchable
MW capacity.
– Bring dispatchable
customer capacity to market.
• Develop an innovation culture
that delivers digital, and data
driven customer experiences.
• Expansion of the energy product
set that unlocks the value of
transport electrification, process
heat and demand flex.
• Continued investment in energy
hardship and community
programmes that promotes
equitable access to the benefits
of the energy transition.
• Policy advocacy that promotes
climate action and supports
New Zealanders through the
energy transition.
• Build operational flex and agility
while sustaining excellent asset
productivity.
• Modern data and digital systems
to promote collaboration,
operational efficiency, innovation
and data-driven decisions.
• Grow a diverse and inclusive,
skilled workforce that reflects
the country we live in.
• Nurture leadership capability to
support the cultural and digital
maturity of a future Meridian.
• Our developing understanding of
the Māori world view helps build
long term relationships with tangata
whenua and better outcomes for all.
• Safety leadership that grows in
maturity as we build into the
energy transition.
• Sustainability culture and leadership
that benefits people and planet,
inspires climate action, and attracts
investors.
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STRATEGIC PRIORITY
Grow renewable
generation
Harapaki Wind Farm in full operation, Hawke’s Bay.
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WHY READ THIS SECTION
Read this section to better
understand how we intend
to protect and expand our
renewable generation portfolio
to deliver clean energy for a
fairer and healthier world.
IN THIS SECTION
Our path to a resilient, net zero future
A new growth curve emerges
Delivering on 7 in 7
Increasing our national capacity
Continued net zero commitment supports
our strategy
Securing long-term access to water
Groundbreaking new contract with NZAS
Our partnership with Southern Green Hydrogen
Case study: Innovating how we meet peak demand
MATERIAL TOPICS
Renewable energy generation
Affordability
Ngā Tukinga o Te Ao Tūroa –
the impacts on the natural world
Climate-related impacts
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SUMMARY
On track with
our developments
~70,000
HOMES ABLE TO BE POWERED
BY HARAPAKI ANNUALLY
Harapaki
NOW OPERATIONAL
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SUMMARY
Ruakākā
BESS SCHEDULED TO BE
OPERATIONAL IN EARLY 2025
Mt
Munro
CONSENT LODGED
(HEARING IN SEPTEMBER)
Waitaki
RECONSENT APPLICATION
SUCCESSFULLY LODGED
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OUR PATH TO
A RESILIENT,
NET ZERO FUTURE
Electrification remains the most
obvious catalyst for Aotearoa
New Zealand to achieve a net
zero economy. With the long-
term viability of NZAS now certain
after the signing of a new 20-year
agreement, Meridian, and more
broadly the sector, can confidently
progress in developing our
renewable generation pipeline.
Undertaking the full electrification
of the Aotearoa New Zealand
economy will take a collective effort
and long-term partnerships with
customers large and small. From
an economic perspective, the long-
term target of Net Zero Emissions
by 2050 is expected to require
around $30 billion of investment
in new renewable generation from
the energy sector, with around
$10 billion from Meridian alone.
A NEW GROWTH
CURVE EMERGES
For more than a decade, electricity
consumption in our country has
been steady, with little or no growth
in demand. New Zealand currently
uses around 40 terawatt hours (TWh)
of electricity per year, but more
recently rising consumer demand
from the electrification of transport
and the conversion of industrial
processes has caused electricity
consumption predicted to rise
significantly, by as much as 70%
to 100% by 2050.
This level of growth over a relatively
short period of time would be the
greatest in our country’s history.
And to deliver on this increased
demand, the sector will need to
build the equivalent of three to four
medium-sized wind farms every year.
Fortunately there’s no shortage
of good renewable options and
capable, well capitalised businesses
wishing to develop them.
Meridian is well placed to support
Aotearoa’s transition to a low-carbon
society. We currently generate around
30% of the country’s electricity
and we’re the biggest supplier of
retail electricity. We aim to maintain
our leadership position and have
resourced up accordingly.
Configuring all our
energy for reliability
In addition to building new
generation options, a successful
transition to a low-carbon economy
requires the electricity generation
sector to enhance its existing
renewable-generation assets.
A critical challenge will be to secure
enough flexible resources and peak-
management products to ensure a
reliable transition. This flexibility sits
alongside and supports our ongoing
focus on managing dry-year risk.
Because wind and solar are
intermittent energy sources –
meaning that the amount of energy
they supply depends on whether it’s
windy or sunny – we’re adapting the
way we use our hydro assets to help
smooth the gaps.
Flexible generation assets and flexible
demand are as important as ever
ensuring that the system remains
reliable, especially in times of national
peak demand. Traditionally, gas
and coal have played key roles in
complementing the country’s hydro
and geothermal generation. But with
the carbon intensity of coal making
that less desirable and gas supplies
proving to be less dependable and
less immediately available than
expected, the whole sector is having
to think harder about how we
configure all our systems to be reliable
and flexible at the same time as
demand is increasing. Meridian’s first
Battery Energy Storage System (BESS)
will play a key role in managing this.
Hydrogen is an option for the
future that could enable another
scaled energy development to be
turned down or off to manage the
security of the country’s energy
supply. This makes it an important
potential addition to our demand-
flexibility portfolio and the country’s
electrification drive. At this stage,
that’s a little way off.
Flexible generation assets and flexible
demand are as important as ever in ensuring
that the system remains reliable, especially in
times of national peak demand.
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DELIVERING ON 7 IN 7
Our target is to complete the
equivalent of 20 wind farms – each
the size of our newest Harapaki Wind
Farm in Hawke’s Bay – by 2050.
We’ve made this more real for our
teams and the communities we serve
by committing to an ambitious goal
of 7 in 7, which will see seven new
large-scale renewable generation
developments underway by 2030.
Our pipeline of projects amounts
to 5 gigawatts (GW) (12TWh) of
development options. Those
projected developments include
wind generation at Mt Munro and
Te Rere Hau (a joint venture with
NZ Windfarms), Waiinu (Taranaki)
and solar capacity at Ruakākā,
Swannanoa, Waikato, Waiinu and
Western Bays (on the western
side of Lake Taupō).
We’ve checked that our renewable
development programme while
ambitious, is affordable and
compatible with delivering
attractive shareholder returns.
Most importantly we’re ramping
up our rate of build to ensure we
remain on target to deliver it.
A significant expansion
The Harapaki Wind Farm was
fully commissioned in July this
year and is now powering up to
70,000 households. We expect to
commission a 100MW peak and
200MWh (2 hours) grid-scale Battery
Energy Storage System (BESS) at
Ruakākā Energy Park near Whangārei
in early 2025. This is a little later than
our initial plan to commission the
project by the end of the calendar
year. The hold-up relates to the
challenge of connecting this new
infrastructure to the grid. The $186
million BESS will support stable grid
operations as it stores energy during
low-demand times of the day, then
injects that energy back into the grid
at peak times. We’ve worked through
the compatibility issues of integrating
the lithium-ion batteries with the
grid. While the batteries are the latest
versions of proven technology, they’re
new to us, and at this scale they’re
also new for the national grid.
We’ve lodged consent applications
for three more projects, including a
120MW solar farm at Ruakākā that
will share the BESS grid connection
infrastructure, and a new, 90MW
wind farm at Mt Munro, in Wairarapa.
We’ll lodge three more consent
applications in FY25, and aim to take
two new projects to final investment
decision (FID) stage during the year.
We’re progressing the detailed
design and procurement for Te Rere
Hau under the terms of the joint
venture with NZ Windfarms. We
expect to reach FID, on this project,
this financial year.
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INCREASING OUR
NATIONAL CAPACITY
Increasingly, our development,
generation, wholesale and retail
teams are working together to
innovate and develop new ways
to create greater capacity during
peak times and dry years.
Historically, generators have focused
on energy output and efficiency.
However, that focus is changing, as
intermittent sources like wind and
solar are becoming more available
and coal and gas generation is
being decommisioned or limited
by supply issues.
Our teams are looking at new ways
to increase the capacity of our
existing hydro assets and optimise
the associated maintenance work.
We’ve also introduced new initiatives
that have not only improved the
way customers consume electricity,
but saved them money and made
our grid more resilient – projects
like our virtual power plant, in which
customers with electric vehicles
(EVs) are rewarded for using energy
stored in those vehicles to help
us take pressure off the grid at
peak times. We believe that the
collective potential of these virtual
power plants will quickly add up
to something significant.
The future focus for our retail
business will be on providing cleaner,
cheaper solutions in homes that have
the added benefit of making our
electricity grid even more flexible.
Working with customers in this way
aligns with the improvements we’re
making at our renewable asset sites
like the Benmore and Manapōuri
Power Stations, and the work we’re
doing to smooth supply fluctuations
(adding what we call firming capacity)
through our Ruakākā grid battery
(BESS) project.
Undertaking work at Manapōuri Power Station, Fiordland.
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GENERATION (GWH)
KEY
Hydro
Wind
*
Waitaki Power Station total generation capacity updated following restoration.
** Benmore Power Station total generation capacity upgraded and Harapaki Wind Farm commissioned.
CAPACITY (MW)
KEY
Hydro
Wind
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CONTINUED NET ZERO
COMMITMENT SUPPORTS
OUR STRATEGY
The Government has reiterated its
commitment to achieving Net Zero
Emissions by 2050, with a doubling in
renewable electricity a contributing
goal. It seems likely that there’ll
continue to be separate approaches
to tackling methane and carbon
dioxide emissions.
Work on the NZ Battery Project,
including a pumped hydro scheme
at Onslow, has been cancelled.
The Government has stopped
further investment in the
Decarbonising Industry (GIDI) Fund
and removed clean car discounts
in favour of allowing the market
to deliver the solutions without
subsidies. The Government also
aims to accelerate its investment in
EV infrastructure, which includes
providing funding for a nationwide
public charging network.
The Government’s confirmation of
its continued commitment to the
2050 Net Zero Emissions target, the
expansion of renewable electricity,
the expansion of the EV infrastructure
and the policy developments relating
to resource consenting aligns directly
with our strategy, helping us to
proceed with confidence and at pace
with our electrification programme.
The removal of GIDI funding affected
some of our larger customers, given
that the underlying economics
of their projects were contingent
on access to the funding. These
opportunities will still be offered
but most likely they will be delayed
at least until the New Zealand and
international emissions trading
schemes start to project more
consistent and reliable future prices.
Time to change the
pace of decision-making
Ongoing hold-ups in resource-
consent processes are seeing
consent decisions for our projects take
considerable time. This is typical of the
challenges all New Zealand energy
developers are facing as they navigate
this country’s current Resource
Management Act 1991 (RMA). We
welcome the Government’s review
of the settings and believe the right
balance must be struck between
localised effects and community
views and the national and climate
advantages associated with large-
scale renewable-electricity projects.
While it will always be important
to work with communities, there’s
also a need to change the pace of
decision-making. We’ve submitted in
support of the Fast-track Approvals Bill
for infrastructure and development
projects with significant regional
or national benefits.
One of our 328 Zero EV charge points, Days Bay, Te Whanganui a Tara Wellington.
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SECURING LONG-TERM
ACCESS TO WATER
New Zealand is relying on its
renewable electricity system to
achieve its climate change, social
and economic goals, and provide
security of supply for homes and
businesses. The Waitaki Hydro
Scheme consists of eight power
stations from Lake Takapō to Lake
Pūkaki. Meridian owns and operates
six of these stations, making it a vital
part of this system, providing around
16% of the country’s electricity needs.
It’s so important to the country’s
energy system that it’s protected
under current legislation.
Given that the existing consent
conditions are set to expire in April
2025, we submitted an application to
Environment Canterbury to reconsent
the scheme for an additional 35
years in July 2023. Our existing
consents will remain in place until
the reconsenting application has
been granted and all appeals have
been determined. We’re only asking
for the operational flexibility we
currently have – not a drop more
water, but also not a drop less.
In preparing our application, Meridian
sought agreement from a number
of interested parties. Those with
which we worked included the three
Ngāi Tahu Waitaki Rūnaka (Moeraki,
Waihao and Arowhenua), Te Rūnanga
o Ngāi Tahu, the Department of
Conservation (DOC), Waka Kotahi
and Fish & Game New Zealand, all
of which share interests in this
important catchment.
These agreements set out plans for
us to work together in supporting
the long-term operation of New
Zealand’s largest renewable hydro
scheme, and achieve meaningful,
long-term environmental and cultural
outcomes for the catchment, such
as through our annual programme in
partnership with Ngāi Tahu to move
thousands of tuna (eels) by trapping
and transferring the elver (young
tuna) upstream from our dams and
moving the tuna heke (migrant adult
eels) back downstream to spawn.
Through this partnership, other
initiatives that will focus on improving
cultural and environmental outcomes
for iwi in their takiwā will be developed
over the 35-year period of the
consent. Many of these activities will
not only benefit iwi, but in their nature
be positive for all New Zealanders.
A fast-track process might become an
option in future if suitable amendments
can be integrated with the Fast-track
Approvals Bill to handle reconsenting
applications, but currently we believe
the existing RMA process best serves
all parties as we seek consent for the
Waitaki Hydro Scheme.
Our Integrated Report Data Pack
contains information on our use
of water, including for withdrawal,
discharge and consumption.
Integrated Report Data Pack
bit.ly/4devDzs
Aviemore Power Station, Waitaki Valley.
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GROUNDBREAKING
NEW CONTRACT
WITH NZAS
NZAS remains a significant customer,
drawing the equivalent of around
36% of our total generation output
and 12% of the national demand.
On 31 May 2024 we announced
that we had successfully negotiated
and signed a package of conditional
20-year contracts for part of the
NZAS Tiwai Point aluminium smelter’s
electricity needs. The package
includes a long-term, fixed-price
contract for electricity and a significant
demand response agreement that will
provide critical dry-year cover, further
supporting the decarbonisation of
New Zealand’s economy. The new
arrangements, which came into
force on 3 July 2024, will replace all
the current arrangements between
Meridian and NZAS.
The package is commercially
sustainable, delivers value for our
shareholders and removes significant
uncertainty for the electricity sector
and the people of Southland. It also
provides Meridian with confidence to
make the right investments to deliver
on its renewable energy goals.
The key terms of the long-term
contracts are:
• 472MW base load volume
from the date the contract
takes effect to the end of 2024
• 377MW base load volume
from 2025
• Pricing that begins on 1 July 2024,
with a 20-year term up to and
including 31 December 2044.
The pricing includes an
opportunity for annual price
escalation from the start of 2028
• Four demand response options
that incentivise the smelter to
reduce consumption, ranging
from 25MW to 185MW.
Demand response will
provide dry-year cover
The demand response element of
our new agreement with NZAS is
groundbreaking, not only for this
country but globally. The level of
flexible demand offered by NZAS
will support the electricity system
to become even more renewable,
while relying less on coal and gas
when the hydro lakes are low.
A maximum of approximately
800GWh of demand response is
available in any given year, with an
average of approximately 400GWh
per annum in the 20-year term of
the contract. This will be important
during periods of low lake inflows,
providing critical dry-year cover
to the electricity system.
When NZAS reduces its
consumption of electricity, that
power can effectively be made
available to other users. The net
result will be a reduction both in
carbon emissions from burning
less coal and the avoidance of
needing more expensive hydro
firming solutions.
We look forward to continuing
to work with NZAS in the years
ahead, and are very mindful of
the value of the Smelter to the
Southland region and the liveli-
hoods of many Southlanders.
OUR PARTNERSHIP
WITH SOUTHERN
GREEN HYDROGEN
Southern Green Hydrogen (SGH)
is a unique opportunity to leverage
New Zealand’s renewable resources
globally, supporting markets to
decarbonise their economies and
meet international commitments.
The SGH opportunity has faced some
headwinds in the past 18 months,
with global inflationary pressures
increasing the cost of renewable
energy, the key input to green
hydrogen production, and capital
costs relating to building hydrogen
facilities increasing substantially.
These factors have put pressure on
SGH economics, consistent with
challenges other hydrogen projects
are experiencing overseas. Markets
have been slow to resolve the
significant gap between the cost
of producing green hydrogen and
potential customers’ willingness to
pay for green hydrogen.
As a result, Meridian has decided to
put the project on hold. We have also
agreed to conclude our partnership
with Woodside. From here, Meridian
will continue to actively monitor our
target markets as we believe Southern
Green Hydrogen remains well placed
to be a competitive green project
opportunity in the future. We will
review the opportunity to progress
SGH when the time is right.
The level of flexible demand offered by
NZAS will support the system to become
even more renewable, while relying less on
coal and gas when the hydro lakes are low.
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Manapōuri Power Station, Fiordland.
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CASE STUDY
Innovating
how we
meet peak
demand
It began the way these things
often do, with two people chatting
after work on a Tuesday afternoon.
Manapōuri Power Station, Fiordland.
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The topic of conversation was how
to make the most of Manapōuri’s
capacity in order to meet demand
peaks – when consumer demand
for energy is highest.
“We knew that Manapōuri had
a greater capacity than we were
accredited for. The question was, with
managing winter peaking on both
our minds, could we somehow access
that?” says Mat Bayliss, Meridian’s
Head of Generation Strategy.
That exchange kicked off a
mechanical analysis to see if higher
output could indeed be achieved in
safe margins and what the effects
would be in terms of acceleration
on wear and tear. “We were literally
looking to redefine the parameters
within which Manapōuri could work,”
says Mat.
To do the work, they needed a
dispensation from Transpower to
operate above the connection code
conditions. Once that had been
granted, the Generation team was
able to start running the plant at
128MW per turbine, up from 125MW.
Today, and with the five turbines
currently operating, that amounts to
another 15MW of peaking capacity.
“That extra capacity makes a big
difference,” says Mat. “It dampens
high wholesale prices, which is
good for consumers, and it gives
us greater peaking capacity, which
is good for revenue. We estimate
that, in just over four months, we’ve
saved around 1,700 tonnes of carbon
that would otherwise have been
generated from coal and gas.”
Mat says that lifting the capacity and
remixing the way that hydro supports
solar and wind have transformed the
generation profile for Meridian. “It
works for customers and our investors
and it gives us access to additional
flexible capacity, which is just what
the country needs.”
Globally, the world is realising the
advantages of using hydro this way.
For Meridian, it provides unparalleled
flexibility in re-orienting the base
energy contribution and filling
peak-demand gaps. Mat says that
more capacity is possible, particularly
as Transpower implements its grid
upgrade strategy. “Seeing past what
we’ve assumed has been the key
to accelerating electrification,” he
says. “We’ve started an asset-by-
asset analysis, and fully expect to
be able to do more with the assets
we already have.”
“It works for customers and our
investors and it gives us access to
additional flexible capacity, which
is just what the country needs.”
Manapōuri Power Station, Fiordland.
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STRATEGIC PRIORITY
Deliver cleaner,
cheaper energy
Meridian customers embracing solar generation for their home and EV, Waitaki Valley.
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WHY READ THIS SECTION
In this section we discuss our
progress in electricity retailing,
our support for the electrification
of transport, and how and
why we link these to our
social licence to operate.
IN THIS SECTION
Evolving our retail role
Electrifying transport and heat
Our Decarbonisation Fund grows
Setting our compass on customers
and increasing social good
Digital and data-driven customer experiences
MATERIAL TOPICS
Customer decarbonisation
Affordability
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SUMMARY
Electrification
starts at home
328
ZERO NETWORK
EV CHARGE POINTS
1,400
HOUSEHOLDS OF OUR
TARGET ARE NOW PART
OF MERIDIAN’S ENERGY
WELLBEING PROGRAMME
1ST
POWERSHOP ONCE AGAIN
TOOK THE TOP SPOT IN
CONSUMER NZ’S PEOPLE’S
CHOICE AWARD
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SUMMARY
18,000
THE EQUIVALENT OF CARS
REMOVED FROM NZ ROADS
BY MERIDIAN’S PROCESS
HEAT ELECTRIFICATION
PROGRAMME THIS YEAR
2,030GWh
OF RENEWABLE ENERGY
CERTIFICATES HAVE
BEEN PURCHASED BY
191 COMPANIES
$3M
ON TRACK TO BE INVESTED IN
MERIDIAN’S DECARBONISATION
FUND IN THE NEXT TWO YEARS
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EVOLVING
OUR RETAIL ROLE
In the past 12 months our residential
brands have delivered a 2% growth
in customer connections and 4% in
customer sales volume (GWh).
We remain the country’s biggest
supplier of retail energy, with sales
in excess of 9,500GWh. This year
we’ve added around 6,000 new
connections, with connections for
Powershop rising by around 2,600
and connections for our Meridian
brand rising by around 3,700.
We now have 370,000 customer
connections, representing around
16% of Aotearoa New Zealand’s
households and businesses.
Making flexibility
valuable for customers
Given that electrification is a national
issue, it makes sense to broaden
the ways that Kiwis can participate
in, and interact with, the country’s
energy system. As we build more
generation, we’ll be better off if
we’re smarter about how we use
energy and manage capacity.
With our retail business continuing
to look for and find ways to pass
value on to customers, we’re looking
to expand our residential customer
base. The power of customers large
and small in being able to participate
actively in the electricity market,
and through more flexible energy
options, will support the delivery of
cleaner, cheaper electricity, support
our electricity system to become
even more renewable and reduce
the average cost to consumers.
ELECTRIFYING
TRANSPORT AND HEAT
Our Process Heat Electrification
Programme continued to deliver
this year, with a cumulative 525GWh
of process heat being converted
from fossil fuels to electricity for
big businesses under agreement
and further memorandums of
understanding being worked
through. This level of conversion
will prevent around 140,000tCO2e
annually being emitted into the
atmosphere, the equivalent of
removing around 69,000 cars from
our country’s roads.
The programme complements our
initiatives in demand flexibility,
enabling customers to be part of
the electrification solution by
rewarding their flexibility. This
year, Mataura Valley Milk has
commissioned an electric boiler.
Enabling demand flexibility in large
industries is critical to a smooth
transition. But it can’t stop there:
dynamic load control is about
offering households and small
businesses rewards for responding
to load demands, and using the
power they already have stored
in different ways.
This year we’ve been trialling a
demand-flexibility product that
enables households with EVs to be
paid for participating in a ‘virtual
power plant’ that will alleviate strain
on the grid during peak periods.
This smart-charging trial involves
50 Tesla and BMW EV owners
testing new vehicle-to-grid and
smart charging technology to
optimise how they charge their
EVs in response to market demand
and pricing. We’ve also been
trialling a bidirectional charger
at our Christchurch office that
highlights the huge potential from
the large number of EV batteries
that will be parked and available
during peak times, by showing
that the technical solution can be
incorporated into a fleet that is in
everyday use. We expect this to
become a solution that works well
for both customers and the energy
system as hardware becomes
more available and affordable.
The ability of EVs to store electricity
means there is energy potentially
available during peak periods that
could be replenished when there is
less pressure on the grid. The stored
power could also be combined with
the use of other customer-owned
sources, such as hot-water cylinders
and home solar and industrial
heating and cooling processes.
EV charging is an important element
in overall transport electrification.
Our Zero EV charging network is
the second largest in the country,
with 328 charge points available for
those using the Zero app, up from
235 Zero charge points last year. The
ongoing expansion of Zero is helping
to address a lack of EV charging
infrastructure nationally.
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CUSTOMER SATISFACTION (NET PROMOTER SCORE)*
KEY
Meridian
Powershop
NZ industry average**
*
Powershop New Zealand and Meridian New Zealand residential customers only. Net Promoter Score is
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. FY23 updated since last report.
FY24 data currently unavailable.
RETAIL CUSTOMER CONNECTIONS* (ICPs)
KEY
Meridian
Powershop
*
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.
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OUR DECARBONISATION
FUND GROWS
To date, over 191 companies have
signed up to purchase more than
2,030GWh of Renewable Energy
Certificates (RECs). Meridian’s Certified
Renewable Energy product allows our
customers to match the electricity they
use from the grid with an equivalent
amount of electricity produced by
some of Meridian’s hydro stations
and wind farms – which have been
independently verified as producing
100% renewable energy.
Meridian has committed to reinvest
all of the net proceeds that we
receive from customers when they
purchase RECs into a decarbonisation
fund. What’s more, the popularity of
Certified Renewable Energy has meant
we’re on track to invest more than
$3 million into our Decarbonisation
Fund over the next two years. This will
advance decarbonisation and energy-
efficiency projects nationwide.
Our first round of fund contributions
saw $333,310 awarded to Waipuna
Community, Youth and Child
Services, St John of God Hauroa
Trust, EcoMatters Bike Hubs, Ngā
Manu Nature Reserve, KidsCan and
South Island Rowing. Round two saw
$1,087,187 awarded to Satisfy Food
Rescue, Tread Lightly, Everybody Eats,
Electrifying Conservation (Southern
Lakes Sanctuary), Blue Light Youth
Driver, Te Ahi Kaa Training & Social
Services, Kairos Food Rescue,
Te Kāhu Tiu’s kōhanga, Ngā Manu
Nature Reserve, Rānui Apartments,
Ōtorohanga Kiwi House, EquiGEN,
Featherston Community Centre and
Northern Southland Community Pool.
You can access more information on
the fund and its impact on our website.
Impact and Transparency Report
bit.ly/3A8UiXx
Meridian has committed to reinvest
all of the net proceeds that we receive
from customers when they purchase
Renewable Energy Certificates into
a decarbonisation fund.
EcoMatters Bike Hub, Tāmaki Makaurau Auckland.
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SETTING OUR COMPASS
ON CUSTOMERS
AND INCREASING
SOCIAL GOOD
Aotearoa New Zealand’s electricity
industry is high performing by global
standards. The World Energy Council
ranks New Zealand 9th in the world
on measures of energy security,
energy equity and environmental
sustainability, and ours is the only
country outside Europe and
North America in the top 10.
Nevertheless, the cost of living,
including energy, has affected
regular household spending.
We’re proud to have fully complied
with the Electricity Authority’s
Consumer Care Guidelines; we build
them into all our customer processes,
especially in the way we support
medically dependent and financially
vulnerable customers to access the
electricity they need. Meridian’s
disconnections for non-payment
are consistently low compared with
the industry average. Disconnection
is a last resort and we will only
disconnect for non-payment where
a customer refuses to engage with
us. We aim to enable customers
to take control of their energy
through flexible payment products
such as LevelPay, and access usage
information on customer apps.
Goal to get 5,000
households out of hardship
The long-term, sustainable use
of energy in this country is about
balancing energy sustainability,
energy supply and energy equity –
helping people to get themselves
back on track and enabling them to
access the energy they need.
We’ve expanded our Energy
Wellbeing Programme beyond its
initial pilot, with a goal of helping
5,000 Meridian and Powershop
households in energy hardship via
a dedicated $5 million fund over a
minimum of two years. To do this,
we look at four things: energy supply;
housing quality; energy efficiency;
and financial situation.
The programme provides tailored,
flexible support to Meridian
customers who are experiencing
energy hardship. By partnering with
community energy organisations,
we aim to reduce the likelihood of
energy hardship in the future.
An independent ‘GoodMeasure
Report’ by ImpactLab, released
in November 2023, considered
the programme’s social return on
investment. The Report found that
for every $1 spent, we can provide
$5.20 of measurable good to
Aotearoa New Zealand.
GoodMeasure Report
bit.ly/3WSvmw8
We’ve now supported 1,467
households through the programme.
We’ve also established a dedicated
Hardship Team and broadened
our geographical coverage to
75% of the country, supported
by 12 community energy partners.
These partners provide energy
assessments, education and energy-
efficient goods such as light bulbs,
heaters and curtains, as well as large-
scale interventions such as insulation
and heat pumps in line with the EECA
Warmer Kiwi Homes programme.
Energy hardship itself is a complex
subject. What we’ve learnt through
the Energy Wellbeing pilot and
in the past year is that hidden
hardship is a very real barrier to
understanding the extent of energy
hardship in New Zealand, and that
deeper data will be needed if we’re
to better identify and quantify the
real situation.
We’ve also come to realise that
high levels of intervention and case
management are needed to support
people in the right ways with the
best interventions. This takes time –
in fact it can take up to six months to
assess, agree on and schedule the
work required.
Securing the services of partners
is helping us to identify energy
hardship situations and interventions,
and their long-term commitment is
needed for our Energy Wellbeing
Programme to be truly effective.
We’re proud to
have fully complied
with the Electricity
Authority’s Consumer
Care Guidelines; we
build them into all our
customer processes,
especially in the way
we support medically
dependent and
financially vulnerable
customers to access the
electricity they need.
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People’s Choice for
customer service
Consumer NZ released its annual
power company consumer
satisfaction survey in May. It’s been
a competitive year, with the cost
of living still on people’s minds and
big players from other sectors now
offering power. However, for the
seventh time in 10 years, Powershop
took the top spot in the survey,
earning it the People’s Choice award.
The Meridian satisfaction score
increased from 46% in 2023 to 57%
in 2024, putting it ahead of all the
other large retailers. Regardless of
the channel of choice, a Meridian
customer can expect to be supported
by a knowledgeable service agent
within an average of 45 seconds
of contacting us.
Campaign image from Powershop advertising.
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DIGITAL AND DATA
DRIVEN CUSTOMER
EXPERIENCES
It’s critical that our retail business
takes an agile and lean operating
approach that’s future fit and future
focused. This will deliver a stronger
retail performance and continue
improving customer experiences.
This year we’ve started building a
new technology architecture for
our customers. Our aim is to run a
world-class cost-to-serve model
that significantly lowers our costs
of acquiring new customers and,
through providing demand flexibility,
enables us to sell customers energy
when the price is low. This approach
will help us reduce the cost of
energy and enable us to work
closely with our customers as we
electrify transport and innovate
to meet their changing needs.
Generation Control at our Te Whanganui a Tara Wellington office.
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STRATEGIC PRIORITY
Deliver
operational
excellence
Our Te Whanganui a Tara Wellington office.
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WHY READ THIS SECTION
Read this section for more on how
we’re building operational flexibility
and agility into the ways we operate.
Aligning everything we do to deliver
on our goals requires clear policy
positions and, increasingly, the ability
to make data-driven decisions.
IN THIS SECTION
Hedging products in demand
Getting more from our assets
Advocating for the planet
Flux refocuses
Data is key to delivering competitive
market offerings
Case study: Harapaki is already proving a success
MATERIAL TOPICS
Renewable energy generation
Cyber security
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SUMMARY
Better, bigger,
more informed
100%
RENEWABLE
ENERGY TARGET
2.2%
INCREASED GENERATION
CAPACITY AT BENMORE
HYDRO STATION – FROM
540MW TO 552MW
AI
AND MACHINE LEARNING
BECOMING MAINSTREAM
ACROSS THE BUSINESS –
CAPTURING EFFICIENCIES AND
ENHANCING INNOVATIONS
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SUMMARY
15MW
MORE THAN 15MW OF
ADDITIONAL CAPACITY
AVAILABLE DURING
PEAK PERIODS
2.4%
INCREASED GENERATION
CAPACITY AT MANAPŌURI
HYDRO STATION – FROM
125MW TO 128MW
FLUX
BUSINESS REFOCUSES ON
AUSTRALASIAN MARKET
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HEDGING PRODUCTS
IN DEMAND
Overall, energy trading volumes
have been up this year, alongside
growth in solar and wind power.
While these trends are healthy for
the industry, they do mean the type
of energy being offered into the
market and the wholesale price of
electricity is becoming more volatile.
If there’s no wind or no sun, if capacity
is down because of planned outage
schedules or if there’s an issue with
transmission capacity, a supply
shortage could result, leading to a
rapid increase in wholesale prices.
To help smooth out this potential
instability, we’re able to use the
inherent flexibility in our hydro assets
to supply hedging products to help
industry participants cover their risks,
including flat and peak products.
Hedges work like a counterbalance
to spikes in market prices. They add
predictability to what participants
can expect to pay.
The demand for these products
has increased this year, in response
to dry-then-wet-then-dry weather
patterns that have added volatility
to peak-time pricing, and a faster-
than-expected reduction in gas
availability, which has been used
to help smooth out price spikes.
GETTING MORE
FROM OUR ASSETS
In addition to increasing capacity,
it’s important that we maximise
our use of existing assets. Our
goal, which we set last year, is to
deliver 500MW of restored and
new capacity from our generation
portfolio by the end of FY28.
There’s no doubt that our existing
hydro assets will play a critical, ever-
evolving role in the years ahead.
As demand ramps up and more
generation comes online, our hydro
stations will need to produce as
much reliable energy as possible
while being flexible enough to act as
energy stores for times when other
sources can’t deliver what’s required.
Achieving this requires rethinking
not just how we add capacity, but
also how we think about asset
health, how we schedule our
planned maintenance work and
outages and how we use data to
speed up decision making and
problem solving.
We’ve continued to grow and take
to market our dispatchable capacity
by increasing the installed capacity
of our power stations at Manapōuri
and Benmore.
Last year we reported problems with
two transformers at Manapōuri. They
had to be taken out of service, and
this meant two generating units were
unable to operate. This year we’ve
worked very hard, with the support
of the manufacturer, to investigate
the fault and see if we can undertake
repairs on site. Unfortunately though,
while on-site improvements have
been completed, they’ve not been
successful. A new transformer is due
to arrive at the end of calendar year
2024, and this will enable six units to
be operational. We’re also pursuing
options to purchase additional new
transformers to ensure we have
seven operational generating
units and a spare transformer.
This year we’ve successfully
reassessed the maximum capacity of
Benmore, from 540MW to 552MW.
This 12MW increase, which has been
available since May 2024, has been
made possible by the changes
we’ve made to the Benmore turbines
in recent years. The extra station
capacity will only be available when
all six Benmore units are operating.
Our overall station output is still
constrained by water discharge
limitations embedded in our
resource consents.
We’ve increased the capacity of
each of the seven Manapōuri units,
from 125MW to 128MW. These
enhancements have added the
equivalent of a mid-sized wind
farm to our outputs.
This year, we’ve also experienced
a prolonged outage of one of the
transformers at our West Wind
Farm. This means that its capacity
is currently constrained to 98MW
instead of the usual 143MW. We
expect to have this resolved by
mid-August 2025.
We’ve increased the capacity of
each of the seven Manapōuri units,
from 125MW to 128MW. These
enhancements have added the
equivalent of a mid-sized wind
farm to our outputs.
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ADVOCATING
FOR THE PLANET
A lot remains unresolved with
regards to policies that will promote
climate action and support New
Zealanders through the energy
transition. Pivotal to understanding
expectations is the second Emissions
Reduction Plan, which will be part of
the Government’s policy package to
achieve national emissions budgets
and targets.
Overall, we endorse the
direction and proposed pace for
decarbonisation identified by the
Climate Change Commission.
Looking beyond the ETS
The Emissions Trading Scheme
(ETS) alone is unlikely to be enough
to reduce emissions. The current
settings do not, in our view, provide
sufficient financial incentives for
change, and the withdrawal of the
GIDI Fund only adds hesitancy to
many looking to invest and convert
to electric. The ETS is supposed
to target emitters but seems to
encourage exotic forest planting
rather than carbon reduction.
The volume of exotic forestry
planting also affects the value of
New Zealand Units and has meant
that auction prices are not rising in
accordance with the Climate Change
Commission’s advice. The current
form of the ETS therefore raises a
number of questions, and clarification
is needed on whether the present
settings are working – or if New
Zealand wants to see more emission
reductions at source in line with
the Climate Change Commission’s
advice. We need to address the ETS
in a bipartisan way if we want to
avoid climate policy swings between
governments and a disorderly
transition. Meridian will continue
to advocate for the Government
adopting the Commission’s advice.
The Government’s support of the
electrification of transport is moving
away from the vehicles themselves
and towards charging networks.
Support for charging infrastructure
aligns with our aim to expand our
own Zero network, but with the
Clean Car Discount gone, EV uptake
has slowed.
RMA changes to our development
options are uncertain
Streamlining resource consenting
will help our assets to come online
and grow electrification nationally,
but how we’ll apply it across our
7 in 7 strategy remains to be seen.
For example, while fast-tracking
would be an attractive option for
the electricity infrastructure we’re
planning in Taranaki and Waikato,
two of our other developments – the
300GWh wind farm at Mt Munro, just
south of Eketāhuna, and the Ruakākā
solar project in Northland – are
already in the current RMA process.
Ongoing areas
of potential regulation
Financial hedges have caught the
attention of the Electricity Authority,
with a Risk Management Review
underway. The review will consider
whether the availability and pricing
of risk-management contracts, and
other risk-management options,
are creating any problems for
competition.
The Electricity Authority, New
Zealand’s electricity regulator, is
gathering data on hedge transactions
and other risk-management options.
We expect it to issue draft findings
for consultation later in the year, then
decide on whether any regulatory
settings should change. We think that
small retailers have the same access
to risk-management options as any
other retailers. Meridian already offers
a wide range of hedge products to
other parties, and anyone can invest
in physical generation as an alternative
to hedging.
Another area of investigation for the
Electricity Authority is the mandating
of its Consumer Care Guidelines, the
adoption of which has to date been
voluntary. The guidelines ask retailers
to deliver to minimum standards of
customer care. They also include
detailed rules on how to work with
consumers experiencing hardship
and for disconnection processes.
Meridian already meets the
proposed mandatory standards
and we welcome this development,
as it will ensure all retailers lift their
performance and deliver minimum
levels of support for all customers.
We need to address
the ETS in a bipartisan
way if we want to
avoid climate policy
swings between
governments and a
disorderly transition.
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Bharat Ratanpal, Interim
Chief Executive Flux Federation.
FLUX REFOCUSES
Our subsidiary Flux Federation
continues to offer its quality, flexible
billing platform to the New Zealand
and Australian energy markets.
The platform has strong security
credentials in the form of ISO 27001
certification and PCI compliance.
Until November 2023, Flux was
focused on building the Flux
platform as a global business.
However, following a review in May,
the Flux Board took the pragmatic
decision to focus Flux’s efforts back
on the Australasian market in service
of its existing customers. Meridian,
including Powershop, is the largest
customer of Flux and the platform
is critical for our service delivery.
Meridian’s Chief Information Officer,
Bharat Ratanpal, has been seconded
as Interim Chief Executive to lead the
business through this next phase.
DATA IS KEY TO
DELIVERING COMPETITIVE
MARKET OFFERINGS
A drive to use data smarter has
dominated Meridian’s efforts to
modernise our systems, with the
aims of promoting collaboration,
capturing operational efficiencies
and driving innovation. The use of
advanced technologies such as AI
and machine learning is becoming
mainstream across the business.
We’ve started using a data lake –
a large repository of continually
refreshing data – to process large
volumes of data and run innovative
data science models that are
changing our decision-making
at all levels.
For example, applying data science
helps us to better forecast how
quickly and in what volumes water
will shift from the hills to the lakes
after rainfall. Through this, we can
better determine the volume of
water we can expect for generation.
We’re using data to better model our
risks and the maintenance required
for our generation assets. Shifting
our wind turbine assessments
from manual inspections on site to
electronic inspections via computers
has reduced the time required and
the chances of human error, and
helped us to construct a more
fulsome view of the overall health
of our wind and hydro assets.
We’ve also started using generative
AI to humanise and simplify the
ways our people interact with our
technology. Our plan is to extend
this use to our customers so that
they can interact effectively with
our technology.
Data models are pivotal to our
evolving retail focus, through which
we’re looking to take to market
innovative products that will help
customers to improve energy
efficiency and increase savings.
We have systems to protect
customer and company data
Our strong focus on data will
improve our efficiencies and help us
provide better value – but to do that
responsibly, the data must be safe
and secure. Strong foundational data
combined with a data governance
framework will help with automation.
At Meridian, safeguarding customer
and company data is fundamental.
We adhere to industry regulations
and standards and proactively
manage cyber risks.
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Our comprehensive programme
fosters a culture of awareness and
resilience in ensuring the security of
our information and communications
technology and operational
technology infrastructure. Cyber
security is a component of Meridian’s
employee performance expectations,
as outlined in our Code of Conduct.
We enhanced our governance by
creating a dedicated Cybersecurity
Board Committee in June 2024.
Our FY24–25 cybersecurity road-
map aligns with the National Cyber
Security Centre’s Cyber Security
Framework and the Australian
Energy Sector Cyber Security
Framework as well as Meridian’s
strategy. The roadmap emphasises
risk assessment, governance, security
culture, awareness, incident response,
compliance and metrics.
We take a multi-layered approach
to cyber defence that includes
continuously monitoring our
environments. Our Managed Cyber
Defence provides real-time threat
detection and response. Third-party
vulnerability analysis and penetration
testing further strengthen our security
position. Our security incident
management is integrated with
the company-wide emergency
response framework to ensure swift
restoration during cyber incidents.
We have a supplier assurance
programme that ensures suppliers
adhere to our policies, which
include continuous monitoring
and robust supply chain security
risk management. Our internal
programme delivers comprehensive
education, training and awareness-
raising. Through e-learning modules
and phishing exercises, we foster a
proactive and positive cyber security
culture, with a clear escalation
process for reporting suspicious
events that has resulted in phishing
failure rates averaging below 1%.
In FY25 we’ll enhance our
information-protection controls,
asset management and identity
and access governance. Targeted
awareness and training programmes
will empower employees, and
collaboration across business teams
will strengthen our cyber defences
against evolving threats.
Undertaking an E-learning module.
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CASE STUDY
Harapaki
is already
proving
a success
The first of our 7 in 7 deliverables,
Harapaki, achieved full power in
July 2024. All the civil works at the
Hawke’s Bay site have now been
completed and the project village
has been removed.
Harapaki Wind Farm, Hawke’s Bay.
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One of the great advantages of
Harapaki was that we were able
to generate power from the time
the first turbine was successfully
installed, meaning we didn’t need
to wait until the end of the project
for it to start contributing to the grid.
In November, the first five turbines
were generating power. As of the
end of June, the pre-assembly of
all the turbines was complete and
36 turbines (154.8MW) were
available to generate electricity.
Total production to the end of
June was 134,861 kilowatt hours.
We introduced a number of
sustainability initiatives throughout
the project to lower our impacts
on the environment, including the
re-use of as much as we could from
the site within the community. This
was our most sustainable project yet.
Everything we learned from it will
be carried to the next project with
the support of a passionate team
of sustainability specialists.
On average, around 75% of the
waste that would once have gone to
landfill is instead being recycled or
reused within the local community.
On Harapaki we set key performance
indicators for local employment and
local spend for both Meridian and
our contractors.
The project exceeded its target for
local employment, which is currently
sitting at 49% after peaking at 57%
during civil works, against a target
of 40%. That’s around 1,400 local
employees.
The local spend was surpassed in
quite a dramatic style. Our goal was
to exceed $40 million in local spend
in the life of the project, and we’re
already around $100 million.
A novel foundation design that
required less concrete, coupled
with an on-site concrete plant,
significantly decreased the
transportation needs from Napier.
An avian monitoring team also
visited every six weeks during
construction, and will do so for
three years post construction
(the frequency is set at the end
of construction), a total of seven
years of monitoring.
Nominations are also open for panel
members and suitable projects for the
Power Up Harapaki community fund.
Harapaki exceeded its target for
local employment, which is currently
49% after peaking at 57% during
civil works, against a target of 40%.
That’s around 1,400 local employees.
Harapaki Wind Farm, turbine foundation under construction, Hawke’s Bay.
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STRATEGIC PRIORITY
Grow
capability
and culture
Our Te Whanganui a Tara Wellington office.
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WHY READ THIS SECTION
Read this section to find out about
our commitment to delivering a
culture and leadership that benefit
people and the planet, inspire
climate action and attract investors.
IN THIS SECTION
A culture of care
Investing in safety
Enriching our worldview
Sustaining our competitiveness
Forever Forests on track
MATERIAL TOPICS
People
Ngā Tukinga o Te Ao Tūroa –
the impacts on the natural world
Business emissions and waste
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SUMMARY
How we do the mahi is what
will make the real difference
75%
EMPLOYEE ENGAGEMENT
2024 RESPONSE – UP 2%
ON THE PREVIOUS YEAR
2024
LAUNCHED A WELLBEING
STRATEGY TO ENHANCE
SUPPORT FOR OUR PEOPLE
DOW
JONES
INCLUDED IN THE
DOW JONES SUSTAINABILITY
ASIA PACIFIC INDEX
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SUMMARY
~450k
TREES PLANTED IN OUR
FOREVER FORESTS BY
END OF FY24
$150,000
IWI FUND CREATED TO
SUPPORT THOSE IMPACTED
BY CYCLONE GABRIELLE
11
YEARS CELEBRATED AS
PRINCIPAL PARTNER OF
KIDSCAN AND 8 YEARS
SUPPORTING THE KAKAPO
RECOVERY PROGRAMME AS
THE NATIONAL PARTNER
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A CULTURE OF CARE
To deliver on our ambitious plans
in the context of a rapidly changing
sector, we need a strong, diverse
workforce that reflects the country
in which we live.
Our all-encompassing focus
on climate action requires us to
empower our people to deliver
powerful, cumulative change.
Knowing that our business
opportunities and challenges are
dynamic, our focus on culture is all
about tapping in to our ability to
deliver on our purpose and strategy.
Delivering value
through our people
To do that, we need to do three things:
1. Ensure our workforce is diverse
and sustainable, with gender and
ethnic diversity that reflects our
country’s demographics, including
Māori representation.
2. Make sure our people have the
capability and support to achieve
our business aspirations.
3. Be deliberate in the way our
culture evolves through change,
by considering how we reward
and recognise behaviours and
performance, foster wellbeing
and connect to Te Ao Māori as
a bicultural organisation.
Employee engagement increases
The overall employee engagement
in the Meridian Group (excluding
Flux) has increased again this year,
to 75%, which means we’re firmly
in the top quartile of New Zealand
companies of a comparable size.
We were pleased to see a very high
voluntary response rate of 95%,
which signals that our people
value this process and know
their feedback will be heard.
Working differently
Change has become a constant in
this environment, so to succeed we
need to think differently about how
work is organised. We’re continuing
to embed a new operating model in
the Generation team, which focuses
on building a culture of innovation
and experimentation.
Following a successful trial this year
in Retail, we’re building greater
business agility into the design of
our Retail operating model to enable
a more focused, flexible, engaged
workforce that will work iteratively
to deliver what our customers need.
Wellbeing is our commitment
This year we’ve formalised an
approach to wellbeing that focuses
on thriving employees, families and
communities. Our wellbeing focus
addresses four risks: the design and
prioritisation of work; change; complex
projects; and social connectivity in a
hybrid world.
In addition, we continue to ensure
that many of our wellbeing services
are available to the whānau of our
employees, as we acknowledge the
importance of family and community
for our people. This industry-leading
strategy is another way in which
we’re setting our people up to
succeed, as well as attracting new
talent, so that we can continue to
work towards a net zero future.
Our Ōtautahi Christchurch office.
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EMPLOYEE ENGAGEMENT*
KEY
Meridian
Global Top 25%
NZ Top 25%
DIVERSITY BY GENDER**
KEY
Female
Male
DIVERSITY BY ETHNICITY**
KEY
Māori
Pacific Peoples
Asian
Middle Eastern/Latin American/African
European
Other
No information stored
*
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).
** Includes casuals and Flux UK.
Our Integrated Report Data Pack contains
more information on our workforce
Integrated Report Data Pack
bit.ly/4devDzs
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INVESTING IN SAFETY
Protecting our people, including
our contractors, is our first priority.
Our people – particularly those
involved in building new renewable
projects and maintaining our existing
assets – often work in technically
challenging environments. Keeping
our teams safe as we grow our
business requires us to address all
risks and potential hazards, which
range in frequency, consequences
and probability.
Reportable injuries steady
Our reportable injuries have held
steady this year. Our total recordable
injury frequency rate for employees
and contractors per 200,000 hours
worked was 1.81 (compared with
1.76 in FY23), with 18 people hurt (10
contractors and 8 employees). The
main types of injury were once again
sprains, strains and superficial injuries.
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 determine the
significance of non-compliance with
reference to the severity of impacts
and sectoral benchmarks. There
were also no significant instances
of injury that required reporting.
A multi-level
approach to safety
We continue to grow and strengthen
our safety culture. This requires us
to use a mix of safety leadership,
shared responsibilities and improve
outcomes through learning to further
mature our approach. It also involves
having shared attitudes, beliefs and
values when it comes to safety and
motivating and inspiring our people
to work safer. To this end, we’ve
established a Safety Leadership Forum
with our Generation team that brings
representatives together to share
We continue to
strengthen our safety
culture. This requires
us to use a mix of
safety leadership,
shared responsibilities
and improve
outcomes through
learning to further
mature our approach.
TOTAL RECORDABLE INJURY FREQUENCY RATE (TRIFR*)
KEY
Meridian employees
Meridian onsite contractors
Meridian onsite employees and contractors combined
*
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.
***Restated due to an error in previous reporting period. Previously reported as 1.76.
Our Integrated Report Data Pack contains more
information on our health and safety metrics
Integrated Report Data Pack
bit.ly/4devDzs
learnings and improve our overall safe
practice. Our site committees continue
to meet every month to identify
hazards and share learnings.
Turbines bring inherent risk to our
wind farms, because their operation
and maintenance see teams working
at height and in tight spaces. We
use our Critical Risk Framework to
examine situations like this, especially
where there is real potential for
serious injury or worse, and look
to reduce any inherent risks. Firstly,
we provide education and risk
assessments, and implement safety
controls to reduce the risks of
working in these spaces. Secondly,
the teams themselves examine their
work protocols to identify ways to
make every day on site as safe as
possible. This includes identifying
new opportunities to reduce risks
– for instance, using physiotherapy
to support people’s musculoskeletal
health when they’re working in
tight spaces in turbines. We’re
now expanding our occupational
health service to include proactive
physiotherapy to support our people
undertaking this type of work.
As our business continues to evolve,
we’re also factoring in new risks to our
Risk Framework. For example, installing
EV chargers and implementing solar
projects create new risks that sit
alongside established risks, such
as those around public safety, lakes,
waterways and access.
Learning Teams go from
strength to strength
Our Learning Team process, with its
focus on learning and improving,
is proving to be a successful way to
bring everyone together to improve
our collective safety knowledge and
processes. Involving all those doing
the work, including our contractors, it
lifts our understanding of how issues
arise and how we can respond with
safety improvements.
Our goal is to normalise reporting as
a safe and encouraged process within
our culture. Our Safety Observation
system, in addition to our network
of health and safety representatives,
encourages our people to be active
safety observers and to initiate
conversations if they see anything
that concerns them or if they
encounter situations where they see
opportunities for improvement.
Mesh as a source of truth
A year since it was introduced, our
health and safety management
system, Mesh, has become a
powerful source of truth. The
software is configured to enable
us to better capture information,
report events, make observations
and identify hazards across the
organisation (including work by
our contractors), then share that
information with our people
quickly and easily.
We also remain an active member
of and contributor to StayLive, an
electricity industry forum focused
on working together.
National approach to dam safety
The introduction of a nationally
consistent approach to dam safety
this year means the country now has
an operative dam safety framework.
The new dam safety regulations
require owners of some dams to
have in place effective Dam Safety
Assurance Programmes including
regular inspection, review and
emergency response plans.
Dams that exceed certain height and
storage volume criteria are required
to be registered with the relevant
Regional Authority. These dams
must also be classified in terms of
their potential to cause harm in the
event of failure. Owners of dams
classified as having medium to
high potential impacts are required
to have appropriate Dam Safety
Assurance Programmes for each dam.
Compliance with elements of the
dam safety assurance programme
will be independently audited
annually from 2026.
As a responsible dam owner
Meridian has Dam Safety Assurance
Programmes that include covering
all its hydro dams since its inception.
This programme aligns with the
requirements of the Building (Dam
Safety) Regulations 2022, the NZ
Dam Safety Guidelines and the
New Zealand Society of Large
Dams’ Dam Safety Guidelines.
All of Meridian’s hydro dams and
canals are classifiable dams in terms
of the Dam Safety Regulations, and
most are High Potential Impact
Classification dams, so will be
registered. Meridian is also reviewing
all dam structures located on our
wind farm sites to determine if any
are required to be registered.
Work is underway to establish the
process required to allow annual
independent audits of each of
Meridian’s dams and their associated
Dam Safety Assurance Programmes.
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ENRICHING OUR
WORLDVIEW
We continue to develop strong
working partnerships with iwi. To
ensure we do these relationships
justice, it’s important that we build
a deep understanding of the
Māori world view. Strengthening
our understanding will help us to
meet the expectations of Māori
and improve the way we think
about the use of, and access to,
precious natural resources. We have
a company-wide cultural education
programme that aims to lift our
collective perspectives, and we’re
on a journey to apply what we learn
to different areas of our business.
We’d like to acknowledge and
thank those with whom we have
partnerships.
• We work with Ngāti Hineuru
and the Maungaharuru-Tangitū
Hapū at the Harapaki Wind Farm.
• We’ve engaged with local
hapū Patuharakeke at Ruakākā
in Northland, and Te Parawhau
hapū who are working as cultural
monitors for the project.
• 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-
affiliated director on our Board.
• Four Murihiku rūnaka, who
collectively are the Murihiku
Hapū, hold mana whenua and
mana moana over the Murihiku/
Southland region. We work
closely with local Murihiku
rūnunga (Awarua, Hokonui,
Ōraka Aparima and Waihōpai)
through Te Ao Marama and
the Waiau Working Party.
• We work closely with Waitaki
rūnaka (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.
This year we’ve begun developing a
Te Tiriti approach for the organisation,
and establishing ways to support
social wellbeing and economic
development for our iwi partners.
You can find the scope of our
focus in our recently published
Code of Conduct.
Code of Conduct
bit.ly/4dvYpuU
An example of this commitment
in action was the creation of the
Cyclone Recovery Fund, created for
iwi residing in the wake of Cyclone
Gabrielle. The $150,000 fund
provided practical financial support
for clean-up activities for those
directly affected by the cyclone.
Deep Cove, Fiordland National Park.
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Funds were allocated to help with
the recovery and restoration of
taonga from the devastated Tangoio
marae in Hawke’s Bay and to support
efforts to provide emergency food
and shelter in Wairoa.
We also expanded the criteria for
our Power Up Harapaki community
fund to provide a more active
representation of the iwi on the
panels that allocate the funding,
and greater access for iwi who are
affiliated with the area but may not
reside there, so they can apply for
projects in their official takiwa.
Our Kōkiri Tangata workstream is
looking at how we can best grow our
understanding of tikanga Māori and
weave this mātauranga (knowledge)
into our people processes. As well
as reviewing our processes, we
have re-established the Matakahi
cadetship programme with Ngāi
Tahu to introduce Ngāi Tahu cadets
to our business in the year ahead.
For iwi in our new development
areas, we’ve been learning about
and identifying the initiatives in
which they’re most interested –
be they training, Forever Forests
partnerships, scholarships or work
opportunities. Of course different iwi
will always have different aspirations,
but our goal is to provide enough
opportunities to encourage dialogue
and find ways to work together.
Powerful Partnerships
We’ve worked with partners to deliver
our Forever Forests programme: one
with the Christchurch Foundation
for our Tūī Corridor Christchurch
plantings, others with private
landowners near our wind farms,
and iwi-based trusts.
We signed a new agreement for
the Waitaki catchment biodiversity
mitigation programme with DOC
and Fish & Game New Zealand
alongside co-funder Genesis Energy.
We celebrated eight years of
supporting the Kākāpō Recovery
programme in partnership with
DOC and Ngāi Tahu, doubling the
kākāpō population in this time.
Our 11th year as principal partner of
KidsCan has also been a privilege
as we support tamariki living in
hardship to reach their full potential.
We celebrated eight
years of supporting
the Kākāpō Recovery
programme in
partnership with DOC
and Ngāi Tahu...and our
11th year as principal
partner of KidsCan
Guy Waipara, GM Development Meridian and Justin Tipa, Kaiwhakahaere (Chair) of Te Rūnanga Ngāi Tahu.
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SUSTAINING OUR
COMPETITIVENESS
Since committing to only renewable
generation, we’ve evolved our
sustainability focus to prioritise climate
action and recognise the social,
environmental and economic factors
that underpin our success. Our Climate
Action Plan includes ambitious targets
for growing renewable electricity
generation, increasing customer
decarbonisation and managing our
own resilience and emissions. Our
climate-related disclosures cover
these targets, as well as the risks
and opportunities for Meridian as a
result of the transition to net zero.
Climate Action Plan
bit.ly/4fyAbBZ
Climate-related Disclosures
bit.ly/3SzilVK
As part of our continuous
improvement, our Code of Conduct
has been updated to sharpen our
focus on conduct, ethics and human
rights and align with the principles
of Te Tiriti. We’ve also introduced a
new environment policy.
Code of Conduct
bit.ly/4dvYpuU
Environment Policy
bit.ly/3YtqxKT
Ambitious goal
for ESG performance
We were again included in the
Dow Jones Sustainability Asia Pacific
Index, an independent global
Standard & Poor’s (S&P) index that
ranks our environmental, social and
governance (ESG) performance
against like companies in our region.
We performed well in the renewables
and governance categories. Our
work to advance how we deliver
on our Nature Positive ambition will
grow our focus on biodiversity, while
also supporting us to increase our
ranking in the Index. Our near-term
goal is to move from the Asia Pacific
Index to the Global Index, which sets
the highest standards and provides
further independent validations of
our ESG performance for investors
and other stakeholders.
Aiming for net zero
We’ve set our long-term emission
reduction targets this year which have
been submitted for independent
Net Zero verification. This is a natural
extension of our Half by 30 business
emissions-reduction target, and we’ll
build out the plan to achieve this
ambitious goal in the year ahead.
During the year we’ve focused on
embedding sustainability priorities
into our business planning process
with the Board and the Executive
Team, engaging leadership teams
in further focusing on performance
objectives, and continuing to
provide coaching and learning and
development support. See our
Climate Action Plan and Climate-
related Disclosures for information
on reaching this target.
Climate Action Plan
bit.ly/4fyAbBZ
Climate-related Disclosures
bit.ly/3SzilVK
Being nature positive
We know that Aotearoa New
Zealand is highly vulnerable to the
impacts of climate change, having
one of the world’s highest rates of
habitat loss and degradation, and
the highest proportion of native
species at risk of extinction.
Our Land 2024, MFE
bit.ly/4chEw9U
Following the setting of our
biodiversity and deforestation
commitment, and our nature positive
ambition, we developed a roadmap
to guide our choices from here.
Biodiversity Commitment
bit.ly/3A56Ui8
This work will have a multi-year
focus, using different approaches
to better define our impacts and
dependencies on nature. Ultimately
we want communities, customers
and investors to better understand
our impacts on nature and the
actions we’re taking to mitigate
those impacts. These actions will
increasingly become part of our
licence to operate. Our nature
focus will support our consenting
processes and give communities
confidence in us as a leader in
sustainability and a developer of
new renewable generation.
During the year we focused on
embedding sustainability priorities
into our business planning process with
the Board and the Executive Team...
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Upholding human rights
Human rights speak to the inherent
value of all people, regardless of
background, and span everything
from the right to live to the right to
work and the right to rest and leisure.
This year we’ve finished our first
human rights risk assessment. This
has helped us to reflect on our current
practices, identify areas on which
to focus our attention and identify
ways to build on the practices and
commitments we have in place. This
programme of work has broadened
the due diligence around modern
slavery that we’ve had in place for a
number of years to mitigate the risks
of impacts on people, particularly
those in our global supply chain. Our
Modern Slavery Statement contains
our reporting on our modern slavery
due diligence.
Modern Slavery Statement
bit.ly/3LUdSJw
Setting our sights on supply
chain improvements
We’ve also initiated a dedicated
supply chain – good energy
programme to enhance sustainability
outcomes throughout our supply
chain. This project aims to give our
suppliers confidence in our direction
and encourage collaboration, so we
can realise this objective together.
Having set up the programme, we’ll
spend the year ahead looking at
emissions and climate risks, training
for our key buyers and strengthening
our contracts. We’ll then start a
multi-year journey in which we’ll
review the project annually to
determine progress and next steps.
Half by 30 targets elusive
Half by 30 is the part of our
Climate Action Plan that focuses
on reducing emissions.
Our ability to hit our Half by 30 goal
is uncertain. We’re doing everything
we can to get there, but some
actions, such as managing flights and
commuter emissions and reducing
supply-chain emissions are proving
challenging due to the growth that
our business and the sector are
experiencing.
We’ve signed a deal with Swedish
company Candela to bring the
world’s first electric hydro-foiling
ferry to Lake Manapōuri. The ferry
will provide daily transport for
staff and contractors servicing the
country’s largest hydro power station.
It’ll save 240 tonnes of carbon
emissions annually and is expected
to begin operating in 2025.
We’ve also focused on lowering
emissions and reducing our need for
highly potent greenhouse gases like
SF6 (sulfur hexafluoride), which are
found in things like our transformers.
Eradicating these is not something
we can achieve on our own, so we’ll
be looking to collaborate with the
industry to make these wider changes
possible more quickly. For more
detail, see our Climate Action Plan.
Climate Action Plan
bit.ly/4fyAbBZ
Simulation of our electric hydro-foiling ferry currently under construction.
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HALF BY 30 EMISSIONS PROGRESS (tCO2e)
KEY
Adverse movement to forecast
Positive movement to forecast
Forecast trajectory (prior to FY24)
Abatement required across all focus areas
Horizon 1
Horizon 2
Horizon 3
This chart shows performance to date and movement against Horizon 1 targets.
New spend-based emissions factors became available in FY24 (previously
published in 2023, and now updated annually). The adoption of these factors
resulted in a >5% change of our total emissions for the base year, driven by
impact to balance emissions. As a result we have restated Balance emissions
for each year using these factors (an increase in FY21 and FY22, and decrease
in FY23), and our Horizon 2 and 2030 target accordingly.
MERIDIAN GROUP GHG EMISSIONS
tCO2e
FY21
FY22
FY23
FY24
Scope 1
1,020
643
1,191
1,060
Scope 2 (market based)
14
2
2
2
Scope 3 operational
31,812
33,920
32,156
36,848
Total Group operational emissions*
32,846
34,565
33,349
37,910
Scope 3 one-time construction and upgrades
284
8,242
14,295
75,291
Total Group value chain emissions**
33,130
42,807
47,644
113,201
*
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, FY22 and FY23 operational emissions were restated in FY24 due to change in source for
spend-based emission factors.
** Group emissions are offset, using Gold Standard Voluntary Emissions Reductions (GS VERS) after taking into
account credits cancelled by suppliers against their own emissions.
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TOTAL OPERATIONAL GHG BY SCOPE (tCO2e*)
KEY
Scope 1
Scope 2 (market based)
Scope 3 operational
Meridian’s generation emissions intensity is zero (tCO2e/GWh of total
generation). As a generator of 100% renewable energy, the fuel source
for the electricity generated has no emissions.
*
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, FY22 and FY23 emissions were restated in FY24 due to a change in
source for spend-based emission factors.
FOREVER FORESTS
ON TRACK
Since 2019 we’ve invested in
planting permanent forests in
Aotearoa through our Forever
Forests programme, to create
our own carbon sink for our
operational emissions out to 2030.
Forever Forests is deliberately sized
to soak up the carbon that’s left
after we’ve removed all we can
against our Half by 30 target.
We remain on track to deliver on
our target of growing the carbon
credits we need for offtake in 2030.
Currently our operational emissions
are offset via Gold Standard Verified
Emission Reduction units. In taking
responsibility for the carbon in our
operational footprint, of which more
than 95% is from our suppliers, we’re
helping them to take climate action
and we’re leaving a lasting legacy in
nature for future generations.
Climate Action Plan
bit.ly/4fyAbBZ
Forever Forest planting at West Wind Farm, Te Whanganui a Tara Wellington.
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GROW CAPABILITY AND CULTURE
The power
to make
a difference
We harness nature to
generate electricity through
Wind, Water and Sun.
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An overview of
our operations
GENERATION
OPERATION
30%
We generate around 30% of
New Zealand’s electricity through:
• 7 Hydro stations
• 6 Wind farms
• 1 Grid-scale solar array underway.
936
We have 936 employees –
124 at our power stations and
development sites – throughout
5 offices across New Zealand.
CUSTOMERS
FLUX
16%
We have 370k customer
connections, around 16%
New Zealand’s households
and businesses (Meridian
Energy and Powershop).
126
A presence in 3 countries
(Australia, NZ and UK).
126 Employees.
Te Uku
Mill Creek
Te Rere Hau
(joint venture)
West Wind
Auckland
Christchurch
White Hill
Manapōuri
Wellington
Te Āpiti
Harapaki
Mt Munro (consenting)
Ruakākā
(BESS construction,
solar consenting)
Benmore
Ōhau A
Ōhau C
Aviemore
Waitaki
Ōhau B
Twizel
Waitaki
Hydro Scheme
MERIDIAN ASSET KEY
Wind Farm
Hydro Station
Battery storage
Solar Array
Meridian Offices
Powershop Office
Masterton
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Our Board
GRAHAM COCKROFT
NAGAJA SANATKUMAR
TANIA SIMPSON
JULIA HOARE
DAVID CARTER
MICHELLE HENDERSON
MARK VERBIEST
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Chair and
Independent Director
Our Directors’ biographies
bit.ly/3YxZQ7Y
v
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v
Our Executive Team
LISA HANNIFIN
GUY WAIPARA
CLAIRE SHAW
MIKE ROAN
BHARAT RATANPAL
Chief Customer Officer
General Manager Development
General Manager Corporate Affairs & Sustainability
Chief Financial Officer
Chief Information Officer
JASON WOOLLEY
NEAL BARCLAY
TANIA PALMER
CHRIS EWERS
JASON STEIN
General Counsel & Company Secretary
Chief Executive
General Manager Generation
General Manager Wholesale
Chief People Officer
Our Executive Team's biographies
bit.ly/3WzB5ph
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HOW WE CREATE VALUE
Meridian generates electricity
through 100% renewable sources –
wind, water and sun. We believe it’s
the only way forward for people
and the planet.
The ways in which Meridian uses
the natural forces at its disposal and
takes care of its customers, people,
local communities, iwi and the
environment are helping to renew
our future, both as a business and
collectively. Our approach strengthens
Meridian’s ability as a significant
publicly listed company to deliver
attractive shareholder returns and to
deliver value to all our stakeholders
and the planet.
We’re a vertically integrated company
and our Group’s activities range from
the generation and development of
new assets to retail.
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OUR COMMITMENT TO
EFFECTIVE GOVERNANCE
Our Board closely monitors the way
we manage 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 directors to question and
challenge the Executive Team on
the direction it wishes to take the
business. These occasions provide
opportunities to advance the Board’s
collective knowledge on sustainable
development, which is highly relevant
to Meridian’s operations and strategy
given our commitment to helping
shift Aotearoa to a net zero future.
Our commitment to sustainable
development is embedded at a
governance level through policies
such as our new Environment
Policy. Our approach to managing
our impacts on the economy, the
environment and people is evident
throughout this report.
Environment Policy
bit.ly/3YtqxKT
The Board sets Meridian’s overall
appetite for risk and approach to risk
management. Our FY24 Corporate
Governance Statement summarises
our key risks.
Corporate Governance Statement
bit.ly/3Wy4sse
Meridian complies with the NZX
Corporate Governance Code
recommendations in all material
respects (with the exception of
recommendation 3.6).
Corporate Governance Code,
NZX bit.ly/3WwBatS
Processes for managing conflicts
of interest are found in the Board
Charter and supported by the
Meridian Whistleblowing Policy.
The number of Code of Conduct
breaches is disclosed annually in our
Corporate Governance Statement.
Our key governance charters and
policies are on our website.
A wide range of internal stakeholders
are typically involved in the design
and iteration of Meridian policies
such as the Code of Conduct and
Whistleblowing. All Meridian policies
are subject to regular review and
iteration in the light of feedback from
stakeholders across the business.
Our Human Rights programme
will look to continuously improve
our grievance and remediation
processes, including how we engage
stakeholder feedback in their design,
operation and improvement.
Whistleblowing Policy
bit.ly/3LRXIjT
Code of Conduct
bit.ly/4dvYpuU
Governance Charters
bit.ly/3LU0WDA
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 require it,
our Board has a view that the
relationship with Ngāi Tahu, which
has mana whenua (authority) 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 is always considered.
This role is currently undertaken by
Tania Te Rangingangana Simpson.
Biographies of our directors and
the Management team are available
on our website. All directors are
independent.
Meridian Directors’ biographies
bit.ly/3YxZQ7Y
Further information on the skills,
composition and tenure of Board
members can be found in the FY24
Corporate Governance Statement.
More information on the nomination
and selection process, including
the criteria used, for Board and
committee appointments is provided
in the Meridian constitution and
Board Charter.
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OUR MATERIAL IMPACTS
Meridian is committed to identifying
both positive and negative, actual
and potential impacts that we have
on the environment, society and the
economy, including human rights.
We take a double materiality
approach, which means we
consider our impacts on society,
the environment and stakeholders
as well as their potential impacts
on our bottom line.
Governance
Our Board approves our material
topics annually. This is done through
the Safety and Sustainability
Committee and at a subsequent
Board meeting. In addition, progress
updates on key initiatives related
to our management of material
impacts are provided in our quarterly
Safety and Sustainability Committee
meetings.
How we measure
material impacts
We measure our actual and potential
material impacts in line with the
updated Global Reporting Index
(GRI) Standards. We begin the
process by taking a high-level
view of our business activities and
business relationships (including
our joint ventures and suppliers).
We also consider the sustainability
context in which they occur and
the stakeholders affected (including
their human rights).
We then use a mix of internal and
external stakeholder engagements
to help us identify the impacts
that are important to Meridian
and our stakeholders. It is from this
stakeholder engagement, and a
review of internal processes such as
grievance mechanisms and internal
risk assessments, that we identify
our most significant potential and
actual impacts and our involvement
with those impacts (whether we
cause them, contribute to them or
are directly linked to them). Closely
related material impacts are grouped
into material topics.
Our material topics for FY24 are:
• Renewable energy generation
• Ngā Tukinga o Te Ao Tūroa –
impacts on the natural world
• Customer decarbonisation
• Climate-related impacts
• Affordability
• Cyber security
• People
• Business emissions and waste
• Supporting communities.
Forever Forest planting at West Wind Farm, Te Whanganui a Tara Wellington.
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Our scoring methodology to
assess the most significant
impacts for reporting
We prioritise impacts by determining
their significance. The significance of
each impact is scored by considering
its severity and likelihood. For
severity, we consider the scale
(how grave the impact is), scope
(how widespread it is) and each
impact’s irremediable character
(how hard it is to put the impact
right). Potential impacts are then
multiplied by the likelihood of their
impact occurring.
In addition to impact materiality, we
determine a significance score for
financial materiality. We do this by
surveying a mix of internal impact,
finance and risk experts to rate the
potential financial implications of
each impact over time.
In order to prioritise impacts for
reporting we apply a minimum
threshold to the significance scores.
Impacts that exceed the threshold
for either financial materiality or
impact materiality are reported in
the Integrated Report.
4
FY23 stakeholder engagement included: customers, customer insights researchers, tangata whenua,
community groups, regional economic development agencies, energy industry experts and researchers,
environmental regulators and equity analysts
Our FY24 material impacts
(review year)
To review our FY24 material
impacts, we:
• Conducted internal surveys
with subject matter, financial
and risk experts in order to
score significance (as per the
methodology described). We
also considered the stakeholder
feedback from the most recent
round of stakeholder engagement
(in this case FY23)4 for ranking
the impacts.
• Conducted a workshop with all
impact owners to discuss any
changes to our business and
market context, and validate the
outcomes of the survey scores
(i.e. new rankings of impacts).
• Obtained the approval of the
Safety and Sustainability Committee
and Meridian Board for the topics
to be included in this report.
• The material topics that were
reported in FY23 but did not meet
the FY24 threshold for reporting
were: ‘Ethics, Governance and Trust’,
‘Supply Chain’ and ‘Sustainability
Thought Leadership’.
MATERIALITY MATRIX
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POLICIES, COMMITMENTS AND TARGETS’ PROGRESS TABLE
The table below outlines our material impacts for the year ending 30 June 2024 in a prioritised form. Material topics (used to group related impacts) are also identified in the table.
100% RENEWABLE GENERATION
MATERIAL TOPIC: RENEWABLE ENERGY GENERATION
Impact Description
Relevant Policies and Commitments
SDG
Meridian directly minimises New Zealand’s greenhouse gas emissions by generating 100% renewable
energy, which represents approximately 30% of New Zealand’s total electricity consumption.
Committed to only generating electricity from 100% renewable sources
•
Committed to improving and sustaining the health of our renewable
generation assets
•
Committed to delivering operational flexibility while sustaining asset productivity.
Key Actions in FY24
Targets and Progress
We’ve undertaken a range of initiatives to maximise the availability of our assets. These have included:
•
Returning to service approximately 20MW of failed turbines at our White Hill Wind Farm
•
Returning to service 15MW from Unit 2 at our Waitaki Hydro Station after a generator failure
•
Returning to service 43MW at Manapōuri Power Station by mitigating the impacts of a de-rating applied
to Unit 4
•
Returning 6MW of capacity for Unit 6 at Ōhau A, which had been de-rated following bypass value issues
•
Flexible and off-peak outage scheduling
•
Approximately 58 fewer annual routine outage days through maintenance innovation, review
and rationalisation
Also see:
•
Getting more from our assets (page 46).
To maintain generation market share of at least 30% (30% achieved in FY24).
To achieve the following levels of plant availability:
•
Hydro 94% (89% achieved in FY24)
•
Wind 92% (90% achieved in FY24).
To increase peak supply from existing assets:
•
Deliver 500MW of capacity from our current generation portfolio by end
of FY28 from a FY23 baseline.
Also refer to the GRI index (page 174).
INCREASING RENEWABLE GENERATION
MATERIAL TOPIC: RENEWABLE ENERGY GENERATION
Impact Description
Relevant Policies and Commitments
SDG
Meridian is directly helping New Zealand to make further emission reductions by building new energy
generation and storage assets.
•
Committed to having seven generation projects underway by 2030
(one per year from 2023).
Key Actions in FY24
Targets and Progress
Construction and commissioning of Harapaki Wind Farm on track for full commissioning in July 2024.
Construction of Ruakākā battery on track for completion in early 2025.
Consent application lodged for Ruakākā solar farm.
Progression of consenting processes for Mt Munro Wind Farm.
Signed 50-50 joint venture with New Zealand Wind Farms to redevelop Te Rere Hau Wind Farm
(already partially consented).
Inclusion of two large-scale projects on the Government’s fast-track list (pending passing of
fast-track legislation).
Achieved increases in the installed capacity of our hydro power plants
•
Additional 21MW from Manapōuri
•
Additional 30MW from Benmore.
As included in our Strategy Map (page 17).
Grow Renewable Generation:
•
2,000GWh p.a. of new renewable generation and 200MW of BESS capacity delivered
by FY31 (176MW Harapaki Wind Farm and 100MW Ruakākā battery on track for completion
in early 2025)
•
Deliver 500MW of capacity from our current generation portfolio by end of FY28 from a
FY23 baseline (up to 20MW achieved in FY24).
Also refer to the GRI index (page 174) and see our FY24 Climate Related Disclosure for our
targets and progress against these in FY24.
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Key Actions in FY24 continued
Targets and Progress
Also see:
•
Delivering on 7 in 7 (page 23)
•
Continued net zero commitment supports our strategy (page 26)
•
Time to change the pace of decision making (page 26)
•
Increasing our national capacity (page 24).
IMPACT ON CULTURAL WELLBEING
MATERIAL TOPIC: NGĀ TUKINGA O TE AO TŪROA – IMPACTS ON THE NATURAL WORLD
Impact Description
Relevant Policies and Commitments
SDG
Meridian is directly helping New Zealand to make further emission reductions by building new energy
generation and storage assets.
Meridian directly affects the cultural wellbeing of some iwi and their relationships with the land, water,
biodiversity and other taonga through the construction and operation of generation assets.
•
Committed to meaningfully engagement with mana whenua in
asset catchments to address cultural and environmental impacts
•
Meridian’s Biodiversity 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
•
Inclusion of a commitment to Te Tiriti o Waitangi in the FY24 update of
the Employee Code of Conduct.
Key Actions in FY24
Targets and Progress
Began implementation of the 35-year agreement (Kawenata) signed in FY23 with Waitaki Rūnaka.
Also see:
•
Securing long-term access to water (page 27).
Engaged with local hapū at Ruakākā and Harapaki, including as cultural monitors for development projects.
Evolved the criteria of our Power Up Harapaki community fund to provide more active representation
of iwi on the panels that allocate the funding, and greater access for iwi who are affiliated with the area but
may not reside there.
Updated our Employee Code of Conduct to include a commitment to Te Tiriti o Waitangi, which
we believe will help support social wellbeing and economic development among our iwi partners.
Continuation of our mitigation elver trap and transfer programme.
Continuation of our mitigation and remediation partnership commitment to the Te Waiau Mahika Kai Trust.
Also see:
•
Enriching our world view (page 60).
As included in our Strategy Map (page 17).
Grow capability and culture:
•
By FY29 to have achieved tangible outcomes of the Kawenata, with key actions
of value identified, shared and carried over to other iwi relationships.
For progress, refer to the GRI index (page 174).
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IMPACTS ON RIVER SYSTEMS
MATERIAL TOPIC: NGĀ TUKINGA O TE AO TŪROA – IMPACTS ON THE NATURAL WORLD
Impact Description
Relevant Policies and Commitments
SDG
Meridian directly impacts the health of certain river systems (including impacts on biodiversity) as a result of
modified water flows caused by hydro structures and water management.
Meridian’s operations do not introduce any contaminants (chemicals or heat) to the water systems. As hydro
generation impacts the water flow and water levels of waterways, there is an indirect impact on the ability of
the water body to dilute the contaminants from other sources (for example, land-use runoff and dairy effluent).
•
Committed to minimising our impact on biodiversity by applying avoidance,
remediation, mitigation, offsetting, restoration and compensation approaches,
in line with all environmental legislation and resource consent conditions, as
per Meridian’s Biodiversity Commitment
•
Committed to complying with all applicable local and international
environmental laws and regulations, as per Meridian’s Environment Policy.
Key Actions in FY24
Targets and Progress
Maintained full compliance with consented and regulatory requirements regarding water use.
Continuation of our mitigation elver trap and transfer programme.
Continuation of our mitigation and remediation partnership commitment to the Te Waiau Mahika Kai Trust.
Submitted an application to Environment Canterbury to reconsent the Waitaki power scheme for
an additional 35 years with no increase in our current water flows.
Seeking resource consent for a deeper channel behind Manapōuri Lake Control Structure to improve
flushing flow delivery to the lower Waiau River.
Also see:
•
Enriching our world view (page 60)
•
Securing long-term access to water (page 27).
100% compliance with consented and regulatory requirements regarding water use
(achieved in FY24).
By FY29 tangible outcomes of kawenata with Ngāi Tahu are in play. Key actions of value
are identified, shared and carried over to other iwi relationships (on track).
Also refer to the GRI index (page 174).
REDUCING CUSTOMER EMISSIONS
MATERIAL TOPIC: CUSTOMER DECARBONISATION
Impact Description
Relevant Policies and Commitments
SDG
Meridian is directly helping customers to reduce their emissions by creating new products and/or
supporting the introduction of technology to replace fossil fuels or improve energy efficiency.
•
Committed to a focus on transport, distributed generation and storage,
demand flexibility, process heat and Certified Renewable Energy to enable
customer decarbonisation (as per our Climate Action Plan).
Key Actions in FY24
Targets and Progress
Key initiatives included:
•
Continued process heat electrification programme
•
Expanded Zero public EV charging network
•
Development of home and business EV charging solution
•
Increased sales of Renewable Energy Certificates and used our Community Decarbonisation Fund to
distribute the net proceeds to support customer and community group decarbonisation projects.
Also see:
•
Electrifying transport and heat (page 36)
•
Our Decarbonisation Fund Grows (page 38)
•
T01 in our FY24 Climate Related Disclosure.
As included in our Strategy Map (page 17).
Grow renewable generation:
•
1,000GWh of process heat under contract by 2030 .
Deliver cleaner cheaper energy:
•
Install additional 75 fast chargers by the end of FY25
•
Increase Community Decarbonisation distributions to $1.5m in FY25.
For progress, see our FY24 Climate Related Disclosure (T01).
Also see our FY24 Climate Action Plan.
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GREATER SECURITY OF SUPPLY
MATERIAL TOPIC: CLIMATE-RELATED IMPACTS
Impact Description
Relevant Policies & Commitments
SDG
Meridian has a direct ability to enhance New Zealand’s security of supply through how we manage
operational risks related to climate change (e.g. physical damage to generation infrastructure).
•
Committed to annually assessing, managing and disclosing our climate-
related risks in compliance with the Aotearoa New Zealand Climate Standards.
Key Actions in FY24
Targets and Progress
Published a comprehensive disclosure on risks related to climate-related impacts and associated
management actions (see our FY24 Climate Related Disclosure).
Note PR1 (flood events), PR3 (severe weather events) and PR4 (supply chain disruptions).
See our FY24 Climate Related Disclosure (PR1, PR3 and PR4) for our targets
and progress against them in FY24.
MORE AFFORDABLE ENERGY
MATERIAL TOPIC: AFFORDABILITY
Impact Description
Relevant Policies & Commitments
SDG
Meridian can directly reduce the overall cost of energy through new products and innovations.
•
Committed to creating a more flexible energy system that enables a
smarter use of electricity in a way that delivers value for customers.
Key Actions in FY24
Targets and Progress
Started building a new flexible technology architecture and operating model to meet
customers evolving energy needs.
Trialled a Virtual Power Plant demand-flexibility product in households using EVs.
Also see:
•
Electrifying transport and heat (page 36)
•
FY24 Climate Action Plan.
As included in our Strategy Map (page 17).
Grow renewable generation:
•
20,000 residential customers using on-demand flex products by end of FY26.
Also:
•
Virtual power plant live by FY25 (completed trial in FY24).
In addition, refer to the GRI index (page 174) and our FY24 Climate Action Plan.
REDUCED CYBER SECURITY IMPACTS
MATERIAL TOPIC: CYBER SECURITY
Impact Description
Relevant Policies & Commitments
SDG
Meridian can directly lessen the impacts of cyber attacks on its operations, customers,
suppliers and business partners through its cyber security approach.
•
Commitment to aligning with Australian energy sector and New Zealand
National Cyber Security Centre cyber security frameworks
•
Committed to adhering to industry regulations and standards, and
proactively managing cyber risks.
Relevant policies:
•
Cyber Security Policy for Third Parties
•
Information Classification & Protection Policy.
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Key Actions in FY24
Targets and Progress
As per our Cyber Security Strategy 2024–2025, our key actions in FY24 were:
•
Strengthening security governance by creating a dedicated Cyber Security Board Committee
•
Enhancing our third-party and supply-chain cyber security risk programme to ensure suppliers adhere
to our policies and that Meridian continually monitors and manages supply chain security risks
•
Advancing our security culture and awareness through industry best practices and a security
awareness maturity model that ensures Meridian continually improves its security posture and
human-cyber risk management
•
Conducted a cyber security crisis simulation exercise.
Also see:
•
We have systems to protect customer and company data (page 48).
Number of serious cyber security incidents (KPI 0 cases, progress 0 cases).
Number of notifiable privacy breaches (KPI 0 cases, progress 0 cases).
Refer also to the GRI index (page 174).
SUPPORTING CUSTOMERS IN HARDSHIP
MATERIAL TOPIC: AFFORDABILITY
Impact Description
Relevant Policies and Commitments
SDG
Meridian is directly improving the wellbeing of customers experiencing energy hardship.
•
Commitment to supporting 5,000 customers in hardship through our
Energy Wellbeing Programme
•
Committed to continued connection for customers in debt who are actively
engaging with us in line with our Consumer Care Policy
•
Committed to full alignment with Electricity Authority Consumer
Care Guidelines.
Key Actions in FY24
Targets and Progress
Maintained full compliance with the Consumer Care Guidelines.
Formed a partnership with the Community Energy Network, expanding our Energy Wellbeing
Programme’s coverage to 75% of the nation.
Enabled customers to take control of their energy through flexible payment products such
as LevelPay and the use of information available on customer apps.
Also see:
•
Setting our compass on customers and increasing social good (page 39).
As included in our Strategy Map (page 17).
Deliver cleaner cheaper energy:
•
Support 5,000 customers in hardship by June 2028 (1,467 at 30 June 2024).
Also:
•
Full compliance with the Consumer Care Guidelines (100% compliance in FY24)
In addition, refer to the GRI index (page 174).
ENHANCED EMPLOYEE WELLBEING
MATERIAL TOPIC: PEOPLE
Impact Description
Relevant Policies and Commitments
SDG
Meridian may directly enhance the physical and mental wellbeing of staff and contractors
through its health, safety, employment and wellbeing practices.
•
Committed to world-class performance in safety, health and wellbeing
•
Committed to alignment with ISO 45003 (risk management for
psycho-social risk)
•
Committed to alignment with ISO 45001 (occupational health and safety
management system).
Relevant policies:
•
Safety and Wellbeing Policy
•
People Policy.
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Key Actions in FY24
Targets and Progress
Key initiatives in FY24 included:
Safety:
•
Embedded a comprehensive health and safety management system
•
Introduced new forums to enable greater levels of worker participation
•
Embedded Learning Teams as the preferred method for investigating incidents and near misses.
Wellbeing:
•
New Wellbeing Strategy approved by the Board
•
Refreshed employee benefits to include free health insurance, unlimited ‘Wellbeing Leave’
and continued counselling services.
As included in our Strategy Map (page 17).
Grow capability and culture:
•
By end FY25 grow the maturity of the Safety Culture through improvements in lead
indicators while managing lag indicators (new target for FY25)
•
Deliver new Wellbeing Strategy in FY25 (new).
Also:
•
Positive improvement in Engagement Surveys results by June 2025 from a FY24
baseline (new)
•
Reduction in high risk potential of our safety events related to our Critical Risks due
to effective controls by June 2025 from a FY24 baseline (new).
IMPACTS OF EMISSIONS AND WASTE
MATERIAL TOPIC: BUSINESS EMISSIONS AND WASTE
Impact Description
Relevant Policies and Commitments
SDG
Meridian directly causes environmental harm from greenhouse gas emissions and waste to landfill
as a result of its construction, generation and corporate activities.
•
Half by 30 commitment, including waste reduction targets (see Climate Action Plan)
•
Long-term emission reduction targets (submitted to Science Based Targets
initiative for Net Zero verification)
•
Committed to offsetting 100% of business emissions (see FY24 Greenhouse
Gas Inventory)
•
Committed to having emission and waste reduction KPIs included in the
Sustainability Management Plans of all development and construction projects.
Relevant policy:
•
Environment Policy.
Key Actions in FY24
Targets and Progress
Implemented a range of emission-reduction initiatives in a range of focus areas, including:
•
Setting and monitoring travel emission budgets for all business units
•
Signing a deal with Swedish company Candela to bring the world’s first electric hydrofoiling ferry
to Lake Manapōuri (for staff transport)
•
Undertaking work to reduce our need for highly potent greenhouse gases like SF6 (found in transformers)
•
Appointing a Farming Engagement and Climate Action lead to work on farm emission reductions.
Repurposed, re-used and recycled materials from a failed transformer at West Wind Farm, including
36,000 litres of oil being regenerated.
Set sustainability KPIs relating to carbon impact reports, waste diversion, transport emissions targets and
the delivery of continuous improvement initiatives.
See our FY24 Climate Action Plan for more initiatives.
As included in our Strategy Map (page 17).
Grow capability and culture:
•
Half FY21 emissions by 30 (Half by 30). See FY24 Climate Action Plan for detailed
progress against targets by focus area.
Delivery against waste KPIs in project-specific Sustainability Management Plans:
•
Harapaki – 75% waste diversion (currently 89%)
•
Ruakākā Battery – 80% waste diversion (currently 99%).
Delivery against project-specific emission KPIs. See our FY24 Climate Related Disclosure
(reduction of emissions for one-off renewable energy projects) for our targets and progress
on each construction project.
SUPPORTING COMMUNITIES
MATERIAL TOPIC: SUPPORTING COMMUNITIES
Impact Description
Corresponding Material Topic
Relevant Policies and Commitments
We directly enhance the wellbeing of communities in which we operate
through employment opportunities and by supporting initiatives and
groups that foster community wellbeing.
Supporting communities
•
Committed to having Sustainability Management Plans for all development
and construction projects, including KPIs for local employment and local spend
•
Committed to maintaining our Power Up fund, which supports local not-for-
profit projects in the areas near our generation assets.
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Key Actions in FY24
Targets and Progress
Distributed $557,999 and supported 85 projects through our Power Up funds in FY24.
Delivered the Sustainability Management Plans for the Harapaki Wind Farm and Ruakākā battery,
and developed plans for Te Rere Hau and Ruakākā Energy Park.
Supported active recreation events around our assets, including Meridian Swim Ruataniwha in Twizel,
Meridian Twizel Hard Labour Weekend and Meridian Hydro Half Marathon in Fiordland.
Full allocation of Power Up funds (all funds fully allocated in FY24).
Delivery against KPIs in Sustainability Management Plans:
Harapaki:
•
Local Employment KPI 40% (achieved 47%)
•
Local Spend KPI >$40m (exceeded $110m).
Ruakākā Battery:
•
Local Employment KPI 50% (currently 95%)
•
Local Spend KPI 15% (currently 8.86%).
Also see:
•
Harapaki is already proving a success (page 50).
EQUAL EMPLOYMENT OPPORTUNITIES
MATERIAL TOPIC: PEOPLE
Impact Description
Relevant Policies and Commitments
SDG
Meridian can directly enhance the opportunities available within the company to individuals
from under-represented communities (e.g. based on gender, ethnicity or sexual orientation).
As outlined in Meridian’s Belonging Strategy, we are committed to:
•
Accessibility – to welcome people with disabilities and neurodiversity
•
Gender – to achieve gender balance with a focus on leadership and
senior roles
•
Rainbow – to encourage LGBTQIA+ diversity
•
Ethnicity – to encourage ethnic diversity
•
Inclusion – in our culture, people, systems, processes and procedures.
Relevant policies:
•
Belonging Policy
•
People Policy
•
Remuneration Policy
•
Gender Identity Expression and Sexual Diversity Guidelines
•
Non-Discrimination and Anti-Harassment Policy.
Key Actions in FY24
Targets and Progress
We formalised an approach to wellbeing that focuses on thriving employees, families and communities.
See A culture of care (page 56).
In FY24 we also:
•
Continued to promote development options to support lifting our female leaders in the business
•
Gained Gender Tick accreditation, receiving ‘advanced’ accreditation
•
Refreshed our benefits package to include:
•
Free period products for all sites and offices
•
Flexible working arrangements
•
New wellbeing leave (including for menopause and gender transitioning)
•
Enhanced parental leave policy.
As included in our Strategy Map (page 17).
Grow capability and culture:
•
30% women in senior roles by FY26, from a 21.4% baseline.
Also:
•
Maintain new placements/recruits at Meridian at 40% female, 40% male
and 20% any gender (FY24 performance: 49% female, 51% male)
•
Increase proportion of women in leadership roles to 40% (40% in FY24)
•
To be representative of the ethnic make-up of Aotearoa, benchmarked against 2018
census data (2018). See the diversity and inclusion page of our website for progress.
Also refer to the GRI index (page 174).
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Remuneration
Report
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.
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REPORT FROM THE
CHAIR OF THE PEOPLE,
REMUNERATION AND
CULTURE COMMITTEE
Dear Shareholders
As Chair of Meridian’s People,
Remuneration and Culture
Committee, I am pleased to
present our Remuneration Report
for the year ended 30 June 2024.
Remuneration Report content
In December 2023 the NZX
released a suggested template for
the remuneration sections of listed
companies’ Annual Reports, to which
Meridian had provided some input.
Our previous Remuneration Reports
had already contained most of the
content suggested in the 2023
NZX template. However, for 2024
we have followed the content and
layout recommended in the NZX
template, and continued to provide
additional disclosures to meet other
external requirements, e.g. those
of the New Zealand Shareholders
Association, the Global Reporting
Initiative and the Dow Jones
Sustainability Index. We believe
this year’s Remuneration Report
represents a further positive step in
transparent and consistent reporting.
This report outlines Meridian’s strategy
and approach to remuneration for
Meridian employees generally, and in
particular for its Chief Executive
and Executive Team, and Directors.
I would like to highlight a few areas
of particular focus this year.
Remuneration Policy
Meridian’s Remuneration Policy has
continued to stand us in good stead
in terms of its overarching principles.
These principles have continued to
guide all elements of our Employee
Value proposition, including
remuneration and how it is applied.
Attracting, retaining and motivating
talented people, and rewarding
them for delivering desired
business performance and long-
term shareholder value, are key to
Meridian’s success.
However, during 2024, and following
external advice, the Board approved
an addition to the Remuneration
Policy so that it now covers more
explicitly how Chief Executive and
Executive Team remuneration
is determined and reviewed. As
Meridian is a major listed company
in New Zealand, the Board has
determined that it is appropriate for
Chief Executive and Executive Team
remuneration to be set in reference
to relevant market information on
fixed and total remuneration for
comparable roles within NZX-listed
companies of comparable scale
and complexity to Meridian, and
including similar organisations in the
same sector. We have agreed that
the fixed remuneration for the Chief
Executive and Executive Team roles
will normally be within an 80%–120%
range of the median for comparable
New Zealand roles, dependent
also on individual capability and
experience and other relevant factors.
For Chief Executive and Executive
Team roles, Meridian targets the
upper quartile of the market for
total remuneration, in the context
of strong organisational and
individual performance.
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.
Chief Executive remuneration
increase for FY24
In early FY24 the Board agreed on a
salary increase to be applied to the
Chief Executive from July 2023, based
on the relevant and conservative
market data that was available at the
time. However, further into the FY24
year we requested an independent
external review of Meridian Chief
Executive remuneration against our
Remuneration Policy for the Chief
Executive role, and against the latest
publicly available remuneration
disclosures for comparable Chief
Executive roles. The result showed
clearly that the Meridian Chief
Executive remuneration had fallen
well behind the level of remuneration
payable for Chief Executive roles in
relevant major listed companies. In
light of this, and in recognition of the
Chief Executive’s strong performance
in leading Meridian, the Board
approved a revised remuneration
increase for the Chief Executive,
which was backdated to July 2023.
This is outlined in the Chief Executive
remuneration table on page 90.
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Chief Executive
remuneration elements
With external remuneration input,
the Board has been considering
the growing international trend in
Chief Executive remuneration of
introducing a deferred element
into the Chief Executive short-term
incentive (STI) plan including ESG
measures in the long-term incentive,
and introducing a mandatory
shareholding requirement. However,
advice received to date is that such
practices are not yet prevalent
or appropriate within the New
Zealand market context for Chief
Executive packages, so the Board has
decided not to make such changes
to the Meridian Chief Executive
remuneration package at this stage.
The Board will, however, continue
to review market Chief Executive
remuneration practices in the New
Zealand context, and may change
the structure of Chief Executive
remuneration in the future.
Flexing our
remuneration practices
Meridian’s workforce is made up of a
diverse range of role types – people
leadership, engineering and technical
trades, financial trading, contact
centre support, sales, IT and various
other professions – all of which
currently share a largely common
remuneration framework.
During 2024, Meridian took
the brave step of making our
remuneration ranges transparent to
our people, so that they now know
their role levels, the remuneration
ranges applicable to them and the
remuneration ranges available for
other roles. This was only achievable
after considerable planning and
preparation and included investing
in upskilling our leaders to be
confident in understanding Meridian’s
remuneration, framework, and
managing it well. This transparency
further demonstrated our
commitment to being as open as
possible with our people about
their employment.
Management also revisited the
appropriateness of our current
practice of offering STIs to
employees at all levels of the
organisation rather than just
senior employees in an economic
environment where cost-of-living
pressures remain challenging for
people. We have retained this
element of our remuneration, as
incentives are still seen as a useful
lever for employee attraction,
performance and engagement.
In the year ahead and beyond,
Meridian will consider the extent to
which we need to build further flex
into our remuneration framework
to meet the emerging new ways
of working, new types of roles,
new work challenges, changing
market and talent environments
and diverging business needs.
Tania Simpson
Chair People, Remuneration
and Culture Committee
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REMUNERATION GOVERNANCE
The Meridian People, Remuneration and Culture Committee comprised the
following members, for the following durations, during FY24. All Committee
members are independent directors. Management only attends Committee
meetings by invitation.
Name of directors
Period of People, Remuneration
and Culture Committee membership
From
To
Tania Simpson (Chair)
5 October 2021
(Chair, effective
17 October 2022)
30 June 2024
Mark Verbiest
28 April 2016
30 June 2024
Graham Cockroft
26 July 2022
30 June 2024
Nagaja Sanatkumar
1 January 2020
30 June 2024
The Committee operates under
a written Charter, and has
responsibilities and processes
as outlined in the charter.
People, Remuneration and
Culture Committee Charter
bit.ly/4cfu8Qb
The internal governance policy
that provides context for the
remuneration outcomes is the
Remuneration Policy.
Remuneration Policy
bit.ly/3yqFjaK
Meridian’s Corporate Governance
Statement outlines how Meridian
meets the requirements of the
NZX Corporate Governance Code,
and in particular its Principle 3.3
(Remuneration Committee) and
Principles 5.1–5.3. (Director, Chief
Executive and Executive Team
Remuneration).
Corporate Governance Statement
bit.ly/3Wy4sse
Meridian’s Trading in Securities
Policy ensures that Meridian and
its subsidiaries’ directors, senior
managers, employees, contractors
and secondees comply with the law
prohibiting insider trading and that
all dealings in Meridian Securities
and Other Financial Products by
such persons are beyond reproach.
Trading in Securities Policy
bit.ly/4d8CvhH
Meridian does not require a
mandatory minimum shareholding
for directors, the Chief Executive
or Executives. However, all are
encouraged to purchase and hold
Meridian shares. The Chief Executive
and Executives have all been issued
performance share rights under
the Meridian Long Term Incentive
scheme which will convert to shares
upon vesting in accordance with that
scheme. The Meridian shareholdings
of the Meridian Chief Executive and
Executives is provided on page 94.
REMUNERATION POLICY
Meridian’s Remuneration Policy
covers remuneration for Directors, its
Chief Executive and the nine other
members of the Meridian Executive
Team, and all Meridian employees.
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 Team balanced
scorecard objectives, company
financial performance targets and
outcomes on an annual basis.
In 2024 an additional section was
added to the Remuneration Policy
to make it more explicit about the
parameters for the determination
of Chief Executive and Executive
remuneration.
Remuneration Policy
bit.ly/3yqFjaK
External and independent advice
The People, Remuneration and Culture
Committee refers to external and
independent remuneration market
information provided by EY and PWC
in order to gauge actual and forecast
movements within the market, and to
assess the levels of fixed and target
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total remuneration to pay its Chief
Executive and Executive Team.
Meridian also seeks market
remuneration information from
independent external sources to
guide processes for determining
the remuneration of all other
Meridian employees.
Fixed remuneration
Fixed remuneration includes base
salary and matched KiwiSaver
contributions of up to 4%. It’s
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.
The People, Remuneration and
Culture Committee reviews and
approves proposed remuneration
packages for the Executive Team.
Remuneration for the remainder
of the employees is determined
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
inform these remuneration decisions.
Individual performance
assessment
All employees, including the Chief
Executive and Executive Team, have
performance objectives aligned to
the organisation’s business plan and
priorities, and individual performance
is formally assessed at least annually.
Chief Executive performance is
assessed and approved by the Board,
Executive performance is assessed by
the Chief Executive and approved by
the People, Remuneration and Culture
Committee. For all other employees,
performance is assessed by the one-
up manager, and approved by the
next level of management.
Variable pay
Meridian has an STI scheme and LTI
plan, which are variable, performance-
based incentives awarded only if
specific financial and non-financial
performance hurdles are met, and
at the discretion of the Board.
Short-term incentive (STI)
The Chief Executive, Executive
Team, and all permanent employees
may participate in variable pay via
an STI scheme at the discretion
and invitation of the Board. The STI
opportunity within Total Remuneration
reflects the complexity and level of the
roles. In FY24 the Chief Executive had
an STI opportunity of 50% of salary,
and the other Executives STI
opportunity was 30%. The employee
STI opportunity is 10–25% of salary
depending on role level.
The STI is an at-risk incentive, which
may be offered for a specific year by
invitation from the Board. Potential
STI payments are wholly discretionary
and reflect the achievement of
pre-determined Board-approved
company profit levels, individual
achievements of performance
objectives aligned to business strategy
and goals, and employee behaviour
compliant with the Meridian Code of
Conduct. If criteria are met, payment
is made in cash after the end of the
qualifying company year. Payment
is not made in shares, and is not
deferred for a subsequent period.
Long-term incentive (LTI)
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. An LTI plan is
not otherwise available to Meridian
employees.
Meridian has a policy that ensures
participants in the LTI plan are not
able to enter transactions (whether
through the use of derivatives or
otherwise) that limit the economic
risk of their participating in the Plan.
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 plan is
contingent on their 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
(Performance Share Rights) to eligible
participants who accept the offer
to participate in the LTI plan. Each
Performance 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 that 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 Performance 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 companies
(Performance Hurdles).
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• Whether the participant continues
to be employed by Meridian
during the vesting period
(Employment Condition).
LTI Performance Hurdles
As at 30 June 2024, there were
three LTI plan cycles underway.
These plans have performance
period which end as follow:
• The FY22 Plan: 30 June 2024
• The FY23 Plan: 30 June 2025
• The FY24 Plan: 30 June 2026.
The three plans have slightly
different performance hurdles,
as the market has evolved over
this period.
The peer group against which relative
TSR performance was measured for
the FY22 Plan comprised AGL Energy,
Origin Energy, Contact Energy,
Mercury NZ, Manawa Energy and
Genesis Energy. The vesting period
for the FY22 LTI scheme ends on
31 October 2024.
The following applies to the FY22
Plan, the performance period for
which ends on 30 June 2024:
• Absolute Return Performance
Share Rights
• Relative Return Performance
Share Rights.
Performance Share Rights lapse if
the holder ceases to be employed by
Meridian during the vesting period,
subject to the Board’s discretion.
For Absolute Return Performance
Share Rights to vest, the company’s
TSR must be greater than the
absolute TSR benchmark that
was 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
Performance 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
Performance 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 Performance
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
Performance 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 TSR of Meridian and
the peer group of companies along
with the outcome on the progressive
vesting scale. Performance 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).
Employee benefits
Meridian offers a wide range of
other benefits and provisions for
all permanent Meridian employees,
including for the Chief Executive
and Executive Team. Benefits
include an employee share scheme,
company-funded employee life,
income protection, trauma and
healthcare insurances, enhanced
parental leave provisions, wellbeing
leave, three days company leave,
the ability to purchase additional
leave, access to purchasing discounts
and various part-time, remote and
hybrid working arrangements where
possible. These benefits are an
important aspect of our Employee
Value Proposition, enabling us
to attract and retain our highly
engaged workforce in a highly
competitive market.
Other disclosures
Neal Barclay has been employed on
an ongoing basis by Meridian Energy
since July 2008, and was appointed
by the Board to the position of Chief
Executive from November 2017.
Pursuant to the employment
agreement, the Chief Executive
and Meridian have mutual rights of
termination on the provision of six
months’ written notice. Meridian
may also terminate the Chief
Executive’s employment on the
grounds of redundancy or serious
misconduct or where an act of
bankruptcy is committed.
With the support of the Board,
Meridian’s practice is that for Chief
Executive and Executive Team roles:
• no ‘clawbacks’ are required except
if salary overpayment occurs
• no retirement benefits are payable
• no sign-on bonuses are offered
• termination payments –
redundancy compensation is
payable to permanent employees
whose employment is terminated
as a result of redundancy.
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KEY PERFORMANCE
SUMMARY
As outlined in other sections of
this Integrated Report, FY24 was a
pleasing year for Meridian, with major
achievements in asset development
and a strong financial performance.
The above performance led to,
and was reflected in the following
remuneration outcomes for the
Chief Executive and Executive Team.
Short-term incentive
Financial performance
For FY24, Meridian’s financial
performance impacted 60% of
the FY24 STI for the Chief Executive
and Executive Team. The measure,
EBITDAF less capital charge,
exceeded target for FY24.
As a result, the Board approved
an FY24 outcome of 140.7% for
this component of the STI.
Scorecard performance
For FY24, a Board-approved
scorecard impacted 40% of the
STI for the Chief Executive and
Executive Team. The scorecard
included a mix of measures, outlined
below. It illustrates that a large
proportion of the remuneration of
the Chief Executive and Executive
Team is directly impacted by their
management of the organisation,
and its impact on the economy,
environment and people.
Based on outcomes and
achievements of the scorecard
measures, for FY24 the Board
approved a scorecard outcome of
85%. A summary of the scorecard
targets follows. A breakdown of the
scoring on each measure is included
under Chief Executive Remuneration
STI Outcomes, page 92.
FY24 was a pleasing year for
Meridian, with major achievements
in asset development, and a strong
financial performance.
Our Twizel office.
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FY24 Executive Scorecard Measures
Measure
FY24 Target
Weighting
(of 40% of STI)
NZAS closure
mitigation
Have confidence in 1,000GWh of new
consumption while finding ways to conclude
NZAS and support meaningful progress of a scale
hydrogen facility in Southland.
20%
(8% of STI)
Decarbonisation-
led growth
Complete Harapaki project and deliver the FY24
stage of the Ruakākā battery project within the
revised cost, time and quality envelope (while
completing the project safely). Lodge two more
consents and have a clear line of consent paths for
other development sites.
20%
(8% of STI)
Customer
Meet Retail EBITDAF, customer number targets
(including targets for those on an energy
innovation offers or products), retention rate and
cost per ICP (retail customer connection) targets.
Demonstrate clear business improvement that was
driven by a change in data utilisation.
20%
(8% of STI)
Optimise
business
performance
Meet targeted lift in peaking capacity across
wind and hydro fleet in FY24, deliver a prioritised
list of generation asset capacity and operational
flexibility options, initiate a trial predictive
management system and demonstrate clear
business improvements driven by a change in
data utilisation.
20%
(8% of STI)
Sustainability
DJSI ranking trending upwards in the Asia index
and towards a ‘top global company position’
position by end of FY26.
Target climate action plan milestones to be met.
10%
(4% of STI)
Investment
stability
Regulatory influence shapes continued
decarbonisation of the economy at speed through
electricity market.
Land demonstrable progress with the Te Ao Māori
programme.
10%
(4% of STI)
The sum of the above may also be varied based
on workplace safety culture, overall workplace
engagement and individual performance.
Long-term incentive
Despite changing and challenging
economic conditions in the FY22–24
period, Meridian met the absolute
and relative Total Shareholder
Return target against its Australia
and New Zealand energy company
competitor group.
• Absolute Return Performance
Share Rights vest if the
company’s TSR is greater than the
Absolute TSR Benchmark on a
compounding annual basis over
the Performance Period. For the
FY22 scheme the Absolute TSR
Benchmark was 7.35% cost of
equity plus 1% compounded over
3 years (27.20% Total Absolute
TSR Benchmark).
• Relative Return Performance
Share Rights vest if the company’s
TSR is greater than or equal to
the 50th percentile (median) TSR
of the Peer Group. In addition to
exceeding the 50th percentile TSR
of the Peer Group, the Relative
TSR outcome was greater than the
75th percentile TSR of the Peer
Group, so 100% vesting applied.
As both the above hurdles were
met, the LTI available to the Chief
Executive and eligible Executive Team
participants for this three-year period
ended June 2024 will be payable. For
the LTI plan performance period to the
end of June 2024, the level of vesting
was 100% (2023: 0%). Therefore
418,384 shares (excluding shares for
dividends) will be transferred to the
eligible participants for the FY22 LTI
plan (2023: 0 shares vested).
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REMUNERATION REPORT
FIVE-YEAR SUMMARY – THREE-YEAR ROLLING TSR
PERFORMANCE (MERIDIAN ENERGY VS PEER GROUP*)
KEY
Meridian
Peer group median
This graph shows Meridian’s
historical TSR performance,
against a peer group of companies
between 30 June 2020 and 30
June 2024. TSR performance
outcomes are independently
validated by external experts.
Up until FY24, for LTI scheme
calculations, Meridian’s total
shareholder return was assessed
with a peer group of New Zealand
and Australian listed energy
companies.* Since FY23, with
changes in the New Zealand energy
market and Meridian’s withdrawal
from Australia, the Board has
determined that a comparison
against the NZX 50 Index is
more appropriate. Like many
companies worldwide, Meridian’s
TSR performance was negatively
impacted by the economic
downturn in FY22 and FY23.
*
The peer group comprised AGL Energy, Origin Energy, Contact Energy, Mercury NZ, Manawa Energy and Genesis Energy.
CHIEF EXECUTIVE REMUNERATION
Chief Executive remuneration outcomes
(a) Overall FY24 and FY23 remuneration
Fixed remuneration earned
Variable cash-based
remuneration earned
Other
remuneration
earned
Long Term incentive earned
Total
remuneration
earned
Year
Base salary
KiwiSaver on
base salary
Total fixed
remuneration
Short term
incentive
earned
(including
KiwiSaver)
Amount
earned
as a % of
maximum
award
Total
variable
cash-based
remuneration
earned
MyShare
Number of
shares vested
% of maximum
awarded
for the
performance
period
Market
price of
vested shares
at 30 June
LTI plan value
Fixed
remuneration
+ STI plan
+ Other
remuneration
+ LTI plan
Earned
FY24
$1,377,885
$55,115
$1,433,000
$848,479
83.4%
$848,479
$2,500
153,049
100%
$6.29
$962,678
$3,246,657
FY23
$1,136,250
$45,450
$1,181,700
$690,467
82.3%
$690,467
$2,500
–
–
–
–
$1,874,667
•
Taxable benefits within Fixed Remuneration are 4% company KiwiSaver contributions on salary.
•
Fixed remuneration is salary plus company KiwiSaver contributions.
•
MyShare is gross value of award shares received in the applicable period.
•
STI is the potential payment based on performance achieved for the applicable period and includes 4% company KiwiSaver contributions.
•
The vesting period for the FY22 LTI scheme ends on 31 October 2024. Share rights lapse if a holder ceases to be employed by Meridian during the vesting period subject to the Board’s discretion.
•
The STI and LTI amounts above were earned during the FY24 and FY23 periods above, but paid in the following applicable periods (i.e. FY25 and FY24).
The Chief Executive is entitled to receive a matching employer KiwiSaver contribution of 4% of gross taxable earnings. The company’s KiwiSaver
contributions for the Chief Executive that were paid within the FY24 period (including on the FY23 STI plan which was paid in FY24) were $81,922.
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CHIEF EXECUTIVE FY24 REMUNERATION SCENARIOS
KEY
Fixed remuneration
Annual variable
LTI
The chart shows how the amounts and proportions of the Chief Executive’s
total remuneration may vary under various scenarios. Note, however, that the
LTI value depends on share price, and the resulting LTI remuneration may
exceed the illustrative scenario.
CHIEF EXECUTIVE FIVE-YEAR
REMUNERATION SUMMARY
Year
Single figure
remuneration
% STI against
maximum
% vested LTIs
against maximum
Span of LTI
performance period
FY24
$3,246,658
83.4%
100.0%
FY22–FY24
FY23
$1,874,667
82.3%
0.0%
FY21–FY23
FY22
$2,134,372
78.9%
48.8%
FY20–FY22
FY21
$2,308,446
66.7%
100.0%
FY19–FY21
FY20
$2,039,841
78.7%
100.0%
FY18–FY20
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(b) FY24 CEO STI outcomes earned
(with payment in August 2024,
which is within FY25)
For the FY24 year, the Chief
Executive had an STI opportunity
of 50% of base salary, with the
potential STI payment being a
maximum of 142% of the target
STI opportunity
• 60% was based on Meridian
financial performance
• 40% was based on
scorecard performance.
The full amount of STI earned
and approved was paid as cash
remuneration in August FY25, as
calculated below, resulting in an STI
payment of 118% of target.
The STI payment earned for FY24
equated to 59.2% of salary (58.4% for
FY23), and 83.4% of the maximum
possible STI award (82.3% for FY23).
STI
component
Measure
STI Target
Outcome
STI Earned
and Awarded
Weighting
%
$*
Achievement on STI Target
%
awarded
for STI
measure
$
awarded
for STI
measure*
Financial
EBITDAF less
capital charge
60% $429,900 EBITDAF less capital charge achieved was 114.5%
of target, resulting in a 140.7% outcome against the
financial measure.
140.7% $604,869
Scorecard
of other
STI
measures
NZAS closure
mitigation
8%
$57,320 The successful finalisation of New Zealand’s Aluminium
Smelter contract now provides some commercial certainty
in place of a previous inherent risk. In addition, process heat
demand has been secured.
100%
$57,320
Decarbon-
isation-led
growth
8%
$57,320 The successful completion of the Harapaki wind project and
additional Te Rere Hau (Wind) development. The Ruakākā
battery project will be commissioned in early 2025.
Other consents are progressing.
75%
$42,990
Customer
8%
$57,320 All measures were delivered ahead of plan.
100%
$57,320
Optimise
business
performance
8%
$57,320 Peaking capacity has lifted, and progress is being made
on portfolio capacity. The predictive trial has been deferred
until FY25.
75%
$42,990
Sustainability
4%
$28,660 Meridian’s Dow Jones Sustainability Index overall rating for
FY23 reduced, although we retained our position on the Asia
Pacific index. We took actions to improve this position for FY24.
Progress was made on our Half by 30 initiatives, including
strategic projects to achieve scope 3 emissions abatement
later in the decade. But overall, our FY24 emissions exceeded
our end of year target (driven by scope 3 increases).
50%
$14,330
Investment
stability
4%
$28,660 The current regulatory setting was stable and provides
for continuing decarbonisation and the deployment of
Meridian’s development options.
Our Te Ao Māori education programme delivered by
Education Perfect tracked well within the business.
100%
$28,660
Scorecard
subtotal
40% $286,600 The Board considered that the requirements for a
workplace safety culture, overall workplace engagement
and individual performance were met, and therefore
no adjustment of the scorecard result was applied.
STI Scorecard achievement
85% $243,610
Total STI target
100% $716,500
Total STI payment against target (Incl KiwiSaver)
118% $848,479
*Including Kiwisaver
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(c) FY24 CEO LTI Outcomes (Awarded)
For the three-year period ended
FY24, the Chief Executive was
eligible for an LTI based on a grant
of Performance Share Rights set at
40% of base salary at the start of the
three-year performance period (1
July 2022). The vesting of shares at
the end of the vesting period was
subject to TSR performance hurdles,
at right.
Performance hurdles
LTI weighting Outcome
Weighted
Outcome
Absolute TSR – Must be greater than the company’s cost of equity
benchmark on a compounding basis
50% Hurdle met
100%
Relative TSR against the peer group*:
• 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.
Share rights lapse if the holder ceases to be employed by Meridian
during the vesting period, subject to the Board’s discretion
50% Relative TSR was greater
than the 75th percentile TSR
of the peer group
100%
* The peer group comprises AGL Energy, Origin Energy, Contact Energy, Mercury NZ, and Genesis Energy. The vesting period for the FY22 LTI scheme ends on 31 October 2024.
Upon vesting, each Performance Share Right is eligible for one ordinary share, which is issued from Treasury Shares to
the Chief Executive.
Performance Share Rights [PSRs] held by the Chief Executive (as at 30 June 2024)
Grant
name
PSR
Award date
Vesting date
Balance
of PSRs at
30 June
2023
Awarded during the
reporting period
PSRs
lapsed
during the
reporting
period
PSRs Vested during
the reporting period
Shares issued/transferred
during the reporting period
Balance
of PSRs at
30 June
2024
PSRs
awarded
Market
price at
award
PSRs
vested
Market
price at
vesting
date
Vesting
date
Shares
issued
Market
price at
issue date
Issue
date
FY21 LTI
9 March 2021
11 October 2023
142,759
–
–
(142,759)
–
– 11/10/2023
–
–
–
–
FY22 LTI
21 October 2021
21 October 2024
136,984
–
–
–
–
–
–
–
–
–
136,984
FY23 LTI
3 November 2022 3 October 2025
166,165
–
–
–
–
–
–
–
–
–
166,165
FY24 LTI
24 October 2023
24 October 2026
–
142,180
5.45
–
–
–
–
–
–
–
142,180
Meridian has a policy to ensure that the participants of 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.
REMUNERATION REPORT
MERIDIAN INTEGRATED REPORT 2024
MENU
93
MERIDIAN SHARE OWNERSHIP
Chief Executive
and Executive Team
Meridian does not have a share
ownership requirement for the Chief
Executive and Executive Team, but
the Board does encourage them to
have Meridian Energy shareholdings.
The Chief Executive and Executives
have all been issued performance
share rights under the Meridian Long
Term Incentive scheme which will
convert to shares upon vesting in
accordance with that scheme.
The current individual shareholdings
are affected by employee tenure,
with longer-serving Executives having
had longer timeframes in which to
accumulate Meridian shares.
The current individual Meridian
shareholdings of the Chief Executive
and two of the longer-serving
Executive Team members is below.
Number of Meridian
shares owned
(excludes Performance
Share Rights)
Value of
shares as at
30 June 2024
Value of
shares as a
% of
FY24 Salary
Chief Executive
530,925
$3,339,518
242%
Chief Financial Officer
254,303
$1,599,566
244%
General Manager
Development
290,913
$1,829,843
332%
Remainder of Executive
Team, combined
196,636
$1,236,840
39%
Employee share ownership
Employees are invited to join
Meridian’s employee share ownership
plan, MyShare. Under MyShare,
Meridian shares are purchased for
participating employees, 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). From the start of FY24, 54% of
employees participated in MyShare.
For FY25, 55% of employees have
enrolled to MyShare.
ESG DISCLOSURES
Chief Executive/
Employee pay gap
This pay gap represents the number
of times greater the Chief Executive’s
remuneration is than the remuneration
of the median of all Meridian
employees.
For the purposes of determining
median employee pay, all
permanent full-time, permanent
part-time and fixed-term employees
below the Chief Executive are
included, with part-time employee
remuneration adjusted to a full-
time-equivalent amount.
As at the balance date (30/6/24),
the Chief Executive’s base salary
of $1,377,885 was 12.5 times the
median employee salary of $109,995
per annum (FY23 11.2 times).5
The Chief Executive’s Total
Remuneration, including STI Earned
and LTI Vested, of $3,246,658 was
26.8 times the median employee
total remuneration of $121,311 (FY23
16 times).5
5
Median employee Salary and Total Remuneration excludes Flux UK and casual employees.
Chief Executive/Other employee
remuneration increase ratio
The Chief Executive’s salary
increased by 21% between FY23
and FY24 (for commentary about
the rationale for this, see page 82).
The median employee salary in FY24
increased by 8.2% from the median
employee salary in FY23, resulting
in a ratio of 2.58:1 Chief Executive to
median employee salary increase
(FY23 0.34:1).
The Chief Executive’s Total
Remuneration earned increased
by 73% from FY23 to FY24, largely
due to there being no LTI award
for FY23, but 100% vesting in
FY24. Median employee Total
Remuneration in FY24 increased by
8.2% from the median employee
Total Remuneration in FY23. This
resulted in a ratio of 16.9:1 Chief
Executive to median employee Total
Remuneration increase (FY23 -1.04:1).
REMUNERATION REPORT
MERIDIAN INTEGRATED REPORT 2024
MENU
94
Gender Pay Gap
The table below shows the difference
between full-time, full-year
equivalent median and average base
salaries and the total remuneration
of Meridian employees by gender –
regardless of the nature or seniority
of work. The overall FY24 gender pay
gap, while still large, has improved
from FY23.
Meridian has an ongoing focus
on increasing the number and
proportion of women at senior,
higher-paying levels of the
organisation. This will help to address
the overall current gender pay gap,
which is largely an outcome of
gender representation differences
in roles at different levels.
Meridian also reviews its salary
data to ensure that there is no
inappropriate pay gap (i.e. not due
to performance, skills, experience
etc) between men and women
doing roles of similar size, type and
seniority. Comparing the median
salary of men and women in roles
of a comparable size and nature,
Meridian has a minimal (<2.5%)
gender pay gap at most job levels.
All
employees
(excluding
CEO)
Males
(excluding
CEO)
Females
Gender Pay
Gap FY24
Previous year
Gender Pay
Gap FY23
Median salary
$109,995
$125,535
$84,000
33.1%
35.2%
Average salary
$118,292
$132,514
$103,056
22.2%
25.4%
Median Total
remuneration
$121,311
$146,510
$94,952
35.2%
39.0%
Average Total
Remuneration
$138,930
$156,932
$119,641
23.8%
26.8%
Pay gap: 1 – (Females $ / Males $)
REMUNERATION BANDS
The following table notes the
number of employees and former
employees of Meridian and its
subsidiaries, not being directors of
the issuer, who, during the reporting
period, received remuneration and
any other benefits in their capacity as
employees, the value of which was
or exceeded $100,000 per annum,
in brackets of $10,000.
They include 181 employees who are
no longer employed by Meridian
Energy Limited and its subsidiaries.
$10k band
Total Group
100,000–109,999
72
110,000–119,999
56
120,000–129,999
57
130,000–139,999
51
140,000–149,999
81
150,000–159,999
52
160,000–169,999
48
170,000–179,999
25
180,000–189,999
24
190,000–199,999
20
200,000–209,999
22
210,000–219,999
18
220,000–229,999
11
230,000–239,999
10
240,000–249,999
6
250,000–259,999
6
260,000–269,999
1
270,000–279,999
2
280,000–289,999
5
290,000–299,999
4
300,000–309,999
2
$10k band
Total Group
310,000–319,999
4
320,000–329,999
4
330,000–339,999
5
340,000–349,999
4
350,000–359,999
1
360,000–369,999
1
410,000–419,999
2
420,000–429,999
1
430,000–439,999
1
440,000–449,999
1
450,000–459,999
1
500,000–509,999
1
530,000–539,999
1
560,000–569,999
2
670,000–679,999
1
680,000–689,999
1
710,000–719,999
1
730,000–739,999
1
900,000–909,999
1
2,120,000- 2,129,999
1
608
REMUNERATION REPORT
MERIDIAN INTEGRATED REPORT 2024
MENU
95
DIRECTOR
REMUNERATION
Approved director
remuneration for FY24
As Meridian is an NZX-listed
company, directors fees (Board
remuneration) must be approved by
a majority of shareholders voting at
a shareholders’ meeting. Meridian
amended its Remuneration Policy
to include how the remuneration
of directors is set. A copy of the
Remuneration Policy is on our
website.
Remuneration Policy
bit.ly/3yqFjaK
Shareholders are kept informed of
any changes in the way the company
allocates the pool of approved
director fees. Refer Corporate
Governance Statement.
Corporate Governance Statement
bit.ly/3Wy4sse
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 consultants PwC to
prepare a benchmarking report of
Meridian’s director fees against those
of comparable companies. Further
details of that report are available
on the NZX website.
Benchmarking summary
report, NZX bit.ly/4ccj9a0
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. Consistent
with LR 2.11.3 and the resolution,
the director fee pool was increased
in FY23 to pay Kenneth Tunnicliffe
and Jodi Mitchell. Mike Roan is the
other director of Flux Federation
(appointed by Meridian) and does
not receive additional remuneration
for that role.
During FY24, the Board reverted to
having only Meridian executives on
the Flux Board. Kenneth Tunnicliffe
and Jodi Mitchell resigned with effect
from 14 June 2024 and were replaced
by Neal Barclay and Jason Woolley,
neither of whom receive additional
remuneration for the role.
The total pool for Board fees is set out in the following table.
Annual director fee pool
FY23
FY24 to
14 June 2024
FY24 from
15 June 2024
Board fees
$1,090,000
$1,090,000
$1,090,000
Committee fees
$109,000
$109,000
$109,000
Flux Board fees
$134,000
$134,000
–
Total pool
$1,333,000
$1,333,000
$1,199,000
From 1 July 2024 the fees allocated to Directors will increase by $146,200.
This will be funded from within the existing Director fee pool of $1,199,000
approved by shareholders in 2021.
REMUNERATION REPORT
MERIDIAN INTEGRATED REPORT 2024
MENU
96
Director remuneration received in FY24
Name of director
Board fees
Audit and
Risk Committee
People, Remuneration
and Culture Committee
Safety and
Sustainability Committee
Additional ad hoc
committees
Total remuneration
Mark Verbiest6 (Chair)
$212,000
–
–
–
$10,000
$222,000
Mark Cairns7
$38,917
–
–
$7,000
$3,000
$48,917
David Carter8
$109,633
–
–
$8,921
$5,000
$123,554
Graham Cockroft
$116,750
$10,500
$9,500
–
$5,000
$141,750
Michelle Henderson
$116,750
$10,500
–
$9,500
–
$136,750
Julia Hoare
$116,750
$25,000 (Chair)
–
–
$5,000
$146,750
Nagaja Sanatkumar9
$116,750
–
$9,500
$18,125 (Chair)
–
$144,375
Tania Simpson
$116,750
–
$21,000 (Chair)
$9,500
–
$147,250
Total
$944,300
$46,000
$40,000
$53,046
$28,000
$1,111,346
Directors are reimbursed for all reasonable and properly documented expenses incurred in performing their duties as Meridian directors.
No additional payments, shares or benefits were received by directors in FY24.
Individual Meridian Board-approved annual fee breakdown
6
Does not receive additional fees for committee membership.
7
Ceased to be a director, effective 12 October 2023.
8
Appointed to the Board, effective 25 July 2023.
9
Appointed as Chair of the Safety and Sustainability Committee, effective 12 October 2023,
so does not represent a full year.
Position held
FY23
FY24
Chair
$212,000
$212,000
Director
$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
Flux Board annual fee breakdown
Position held
FY23
FY24
Flux Chair
$84,000
$84,000
Flux independent director
$50,000
$50,000
Flux director remuneration received
Name of director
FY23
FY24
Kenneth Tunnicliffe (Chair)10
$49,000
$84,000
Jodi Mitchell10
$29,167
$50,000
Mike Roan (Meridian Executive)
–
–
Neal Barclay (Meridian Executive)11
–
–
Jason Woolley (Meridian Executive)11
–
–
Total
$78,167
$134,000
Meridian employees appointed as directors of Meridian subsidiaries do not
receive any directorship fees.
10 Kenneth Tunnicliffe and Jodi Mitchell resigned with effect from 14 June 2024.
11
Neal Barclay and Jason Woolley appointed with effect from 4 June 2024.
REMUNERATION REPORT
MERIDIAN INTEGRATED REPORT 2024
MENU
97
Further
Disclosures
Further disclosures required
by the NZX Listing Rules,
the Companies Act 1993 and
other legislation and rules.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
MENU
98
Meridian Energy
The table outlines the current directors of Meridian Energy Limited. During
FY24 there were two changes to the directors of Meridian Energy Limited:
Mark Cairns ceased to be a director; and David Carter was appointed as
a director.
Company name
Directors
Meridian Energy Limited
David Carter, Graham Cockroft, Michelle Henderson, Julia
Hoare, Nagaja Sanatkumar, Tania Simpson, Mark Verbiest
The Board has determined that as at
30 June 2024, all Meridian directors
are independent. The factors
relevant to this determination are
that no director:
• is currently, or has been within the
past three years, employed in an
executive role by the issuer or any
of its subsidiaries;
• is currently deriving, or has within
the past 12 months derived a
substantial portion of their annual
revenue from the issuer;
• is currently, or has in the past 12
months been 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 has in the past three
years been employed by the
external auditor to the issuer or any
of its subsidiaries;
• currently has, or has had 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 a person otherwise associated
with, a substantial product holder
of the issuer;
• is currently, or within the last
three years, has been 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; 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 2024 is:
As at 30 June 2024
As at 30 June 2023
Female
Male
Gender
diverse
Female
Male
Gender
diverse
Number of directors
4
3
–
4
3
–
Percentage of directors
57%
43%
0%
57%
43%
0%
Number of officers
4
7
–
4
7
–
Percentage of officers
36%
64%
0%
36%
64%
0%
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
MENU
99
Meridian subsidiaries
The following tables list the
subsidiaries of Meridian Energy
Limited during the accounting
period, the subsidiaries of those
subsidiaries, and any changes to
those subsidiaries and among the
people who held office as directors.
New Zealand subsidiaries
Company name
Company number
Directors
Further information
Dam Safety Intelligence Limited
6152623
Neal Barclay, Jason Stein
No changes
Flux Federation Limited
6292491
Michael Roan, Neal Barclay,
Jason Woolley
Neal Barclay was appointed
director on 4 June 2024
Jason Woolley was appointed
director on 4 June 2024
Kenneth Tunnicliffe ceased to
be a director on 14 June 2024
Jodi Mitchell ceased to be a
director on 14 June 2024
Meridian Energy Captive
Insurance Limited
1612020
Neal Barclay, Michael Roan
No changes
Meridian Energy International Limited
1114014
Neal Barclay, Michael Roan
No changes
Meridian Limited
863312
Neal Barclay, Michael Roan
No changes
Powershop New Zealand Limited
8184062
Neal Barclay, Michael Roan
No changes
Kōkako SPV Ltd
8967098
Michael Roan, Guy Waipara
Registered on the Companies
Office register on 18 October 2023
UK subsidiary
Company name
Directors
Further information
Flux-UK Limited
Nicola Kennedy, Rush Bhatt,
Bharat Ratanpal
Bharat Ratanpal was appointed
director on 10 June 2024
Rush Bhatt was appointed director
on 10 June 2024
Kenneth Tunnicliffe ceased to
be a director on 14 June 2024
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
MENU
100
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 lists the general disclosures
of interest by directors of Meridian
Energy Limited.
Name
Position
Disclosures
Mark Cairns
Director, Meridian Energy Limited
(ceased to be a director on
12 October 2023)
Auckland Airport International Limited, Director
Freightways Limited, Chair
David Carter
Director, Meridian Energy Limited
(appointed as a director on
25 July 2023)
Beca Group Limited, Director and Employee*
Beca Group Holdings Limited, Director*
Beca Insurance Company Pte Limited, Director*
BGL Depositary No. 2 Limited, Director*
BGLIR Trustee Limited, Director*
BGL Nominees Limited, Director*
BGCF Trustee Limited, Director*
OMI Beca Limited, Director**
Beca Holding (Thailand) Co., Ltd, Director*
Beca (Thailand) Co., Ltd, Director*
Beca – PT Bimatekno Karyatama Konsultan, President Commissioner*
Graham Cockroft
Director, Meridian Energy Limited
AGL Energy Limited, Director
Tuatahi First Fibre Limited, Director
UFF Holdings Limited, Director
First Fibre MidCo Limited, Director
First Fibre BidCo Limited, Director
Michelle Henderson
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 Holding Limited, Director
*
Entries added by directors and effective during the year ended 30 June 2024.
**
Entries removed by directors during the year ended 30 June 2024.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
MENU
101
Particulars of entries in the
interests register made during
the accounting period continued
Name
Position
Disclosures
Julia Hoare
Director, Meridian Energy Limited
Auckland International Airport Limited, Director
Comvita Limited, Director
Port of Tauranga Limited, Director
Northport Limited, Director
Primeport Timaru Limited, Director
Nagaja Sanatkumar
Director, Meridian Energy Limited
Cawthron Institute, Director
Foodstuffs North Island Limited, Director
Groov Ltd, Director**
Imagen8 Limited, Director
New Zealand Post Limited, Director
Southern Cross Healthcare Limited, Director*
Southern Cross Medical Care Society, Director*
Southern Cross Health Trust, Trustee*
Tuatahi First Fibre Limited, Director
First Fibre Midco Limited, Director
First Fibre Bidco NZ Limited, Director
UFF Holdings 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
Waste Management NZ Limited, Director*
Tui Topco Limited, Director*
Tui Bidco Limited, Director*
WMNZ Holdings Limited, Director*
Mark Verbiest
Director, Meridian Energy Limited
MBIE Crown Monitor for Worksafe**
Summerset Group Holdings Limited, Chair
Willis Bond & Co Limited, adviser to Property Income Fund Limited
*
Entries added by directors and effective during the year ended 30 June 2024.
**
Entries removed by directors during the year ended 30 June 2024.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
MENU
102
Particulars of entries in the interests
register made during the accounting
period – subsidiaries
In accordance with sections 140 and
211(1)(e) and (2) of the Companies
Act 1993, the table lists the general
disclosures of interest by directors of
Meridian Energy Limited’s subsidiaries.
Name
Position
Disclosures
Neal Barclay*^
Employee – Chief Executive
Meridian Energy Limited
Mike Roan*^
Employee – Chief Financial Officer
Meridian Energy Limited
Jason Woolley^ (director of Flux Federation Limited)
Employee – General Counsel
Meridian Energy Limited
Jason Stein^ (director of Dam Safety Intelligence Limited)
Employee – Chief People Officer
Meridian Energy Limited
Guy Waipara^ (director of Kōkako SPV Limited, appointed
on incorporation on 18 October 2023)
Employee – GM – Development
Meridian Energy Limited
Bharat Ratanpal^ (director of Flux-UK Limited, appointed
10 June 2024)
Employee – Chief Information
Officer and Interim Chief Executive
of Flux Federation Limited
Meridian Energy Limited
Nicola Kennedy^ (director of Flux-UK Limited)
Employee – Chief Executive
Flux Federation Limited
Rush Bhatt (director of Flux-UK Limited, appointed 10 June 2024)
Employee – Chief Financial Officer
Flux Federation Limited
Jodi Mitchell
(director of Flux Federation Limited, ceased 14 June 2024)
Independent director
Flux Federation Limited
Ken Tunnicliffe
(director of Flux Federation Limited, ceased 14 June 2024)
Independent director
Flux Federation Limited
*
This person is a director of more than one Meridian Energy Limited subsidiary, see the ’Meridian subsidiaries’ section above.
^
This person has equity holdings in Meridian Energy Limited, see ’Executive Team equity holdings’ below.
During FY24, 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
David Carter
Beneficial interest
1 August 2023 –
Initial disclosure
Acquisition
Shares
18,000
n/a
Julia Hoare
Legal interest
22 September 2023
Acquisition –
Dividend Reinvestment Plan
Shares
164
$5.2039
Legal interest
26 March 2024
Acquisition –
Dividend Reinvestment Plan
Shares
78
$5.7681
Tania Simpson
Beneficial interest
4 September 2023
Acquisition
Shares
849*
$5.269
Mark Verbiest
Beneficial interest
22 September 2023
Acquisition – Dividend
Reinvestment Plan
Shares
1,104
$5.1953
Beneficial interest
26 March 2024
Acquisition – Dividend
Reinvestment Plan
Shares
526
$5.7644
*
Rounded to the nearest whole number.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
MENU
103
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 2024,
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 $2,032,363
during FY24. Meridian does not
make donations to political parties.
All donations must be approved
by the Board.
Auditor
Meridian’s auditor is the Auditor-
General who has appointed Mike
Hoshek of Deloitte to carry out the
audit of the Meridian Energy Ltd
and its subsidiaries on behalf of
the Auditor-General.
The fees for other services
undertaken by Deloitte during
FY24 totalled $0.3 million (2023:
$0.2 million). 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, agreed-upon procedures
for insurance purposes, vesting
of the Executive Team 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 $69,200 for climate
related disclosure gap analysis,
$11,000 for cyber security services
and $14,000 (2023: $14,000) 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.
Interests in
Meridian securities
In accordance with NZX Listing
Rule 3.7.1(d), as at 30 June 2024
Meridian Energy Limited directors
had the following relevant interests
in Meridian Energy Limited Quoted
Financial Products:
Director
Number
of shares*
Number
of bonds
David Carter**
18,000 100,000
Graham Cockroft
40,000
–
Michelle Henderson 7,335*
–
Julia Hoare
8,406
–
Nagaja Sanatkumar 8,769*
–
Tania Simpson
5,140
–
Mark Verbiest
49,828
–
*
Rounded to the nearest whole number.
** David Carter, appointed director on 25 July 2023.
Executive Team
equity holdings
As at 30 June 2024, the Executive
Team had relevant interests in
Meridian Energy Limited shares
as follows:
Executive
Team
Number
of shares
Unvested
Performance
Share Rights
Neal Barclay
530,925
445,328
Chris Ewers
42,088
118,611
Lisa Hannifin
20,304
138,487
Nic Kennedy
14,449
–
Tania Palmer
20,348
145,960
Bharat Ratanpal
19,905
77,552
Mike Roan
254,303
183,985
Claire Shaw
13,259
102,795
Jason Stein
81,506
101,764
Guy Waipara
290,913
149,906
Jason Woolley
–
104,745
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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104
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 2024.
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
1,321,595,587
51.01
HSBC Nominees (New Zealand) Limited – NZCSD
158,571,794
6.12
HSBC Nominees (New Zealand) Limited A/C State Street – NZCSD
123,650,989
4.77
JPMorgan Chase Bank NZ NZ Branch-Segregated Clients Acct – NZCSD
114,327,875
4.41
Citibank Nominees (New Zealand) Limited – NZCSD
94,186,838
3.63
Custodial Services Limited
87,947,496
3.39
BBP Paribas Nominees (NZ) Limited – NZCSD
81,708,735
3.15
Accident Compensation Corporation – NZCSD
46,643,610
1.80
HSBC Nominees A/C NZ Superannuation Fund Nominees Limited – NZCSD
30,481,228
1.17
TEA Custodians Limited Client Property Trust Account – NZCSD
26,686,005
1.03
JBWere (NZ) Nominees Limited
26,597,522
1.02
New Zealand Depository Nominee Limited
18,696,224
0.72
ANZ Wholesale Australasian Share Fund – NZCSD
17,843,344
0.68
BNP Paribas Nominees (NZ) Limited – NZCSD
16,668,854
0.64
Forsyth Barr Custodians Limited
16,334,246
0.63
FNZ Custodians Limited
15,044,700
0.58
Simplicity Nominees Limited – NZCSD
12,452,897
0.48
PT (Booster Investments) Nominees Limited
9,894,449
0.38
ANZ Custodial Services New Zealand Limited – NZCSD
7,754,447
0.29
HSBC Custody Nominees (Australia) Limited
7,471,777
0.28
*
Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
FURTHER DISCLOSURES
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105
The table opposite lists the
company’s 20 largest registered
holders of MEL050 retail fixed-rate
bonds as at 30 June 2024.
Names
Number of bonds
% of issued bonds
Custodial Services Limited
41,722,000
20.86
Forsyth Barr Custodians Limited
26,170,000
13.08
FNZ Custodians Limited
22,659,000
11.32
TEA Custodians Limited Client Property Trust Account – NZCSD
19,384,000
9.69
BNP Paribas Nominees (NZ) Limited – NZCSD
11,900,000
5.95
ANZ Fixed Interest Fund – NZCSD
5,500,000
2.75
BNP Paribas Nominees (NZ) Limited – NZCSD
5,409,000
2.70
HSBC Nominees (New Zealand) Limited – NZCSD
4,877,000
2.43
JBWere (NZ) Nominees Limited
4,610,000
2.30
Citibank Nominees (New Zealand) Limited – NZCSD
4,577,000
2.28
Investment Custodial Services Limited
4,335,000
2.16
MT Nominees Limited – NZCSD
4,000,000
2.00
Forsyth Barr Custodians Limited
3,671,000
1.83
NZX WT Nominees Limited
3,318,000
1.65
ANZ Wholesale NZ Fixed Interest Fund – NZCSD
3,000,000
1.50
Forsyth Barr Custodians Limited
2,397,000
1.19
FNZ Custodians Limited
1,306,000
0.65
JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct – NZCSD
1,200,000
0.60
JBWere (NZ) Nominees Limited
1,000,000
0.50
Dunedin City Council
800,000
0.40
*
Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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106
The table opposite lists the
company’s 20 largest registered
holders of MEL060 retail fixed-rate
bonds as at 30 June 2024.
Names
Number of bonds
% of issued bonds
Custodial Services Limited
44,612,000
22.30
Forsyth Barr Custodians Limited
34,809,000
17.40
JBWere (NZ) Nominees Limited
18,955,000
9.47
FNZ Custodians Limited
18,655,000
9.32
HSBC Nominees (New Zealand) Limited – NZCSD
12,300,000
6.15
BNP Paribas Nominees (NZ) Limited – NZCSD
8,777,000
4.38
Investment Custodial Services Limited
4,968,000
2.48
Queen Street Nominees ACF Pie Funds – NZCSD
4,800,000
2.40
Southland Building Society – NZCSD
3,800,000
1.90
Forsyth Barr Custodians Limited
2,821,000
1.41
HSBC Nominees (New Zealand) Limited A/C State Street –NZCSD
2,020,000
1.01
ANZ Fixed Interest Fund – NZCSD
1,825,000
0.91
JBWere (NZ) Nominees Limited
1,800,000
0.90
MT Nominees Limited – NZCSD
1,700,000
0.85
JBWere (NZ) Nominees Limited
1,500,000
0.75
ANZ Wholesale NZ Fixed Interest Fund – NZCSD
1,500,000
0.75
PIN Twenty Limited
1,400,000
0.70
FNZ Custodians Limited
1,368,000
0.68
NZX WT Nominees Limited
1,321,000
0.66
Adminis Custodial Nominees Limited
1,255,000
0.62
*
Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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107
The table opposite lists the
company’s 20 largest registered
holders of MEL070 retail fixed-rate
bonds as at 30 June 2024.
Names
Number of bonds
% of issued bonds
Custodial Services Limited
71,898,000
23.96
Forsyth Barr Custodians Limited
37,512,000
12.50
BNP Paribas Nominees (NZ) Limited – NZCSD
29,104,000
9.70
NZPT Custodians (Grosvenor) Limited – NZCSD
21,730,000
7.24
FNZ Custodians Limited
19,267,000
6.42
Generate KiwiSaver Public Trust Nominees Limited NZCSD
15,714,000
5.23
TEA Custodians Limited Client Property Trust Account – NZCSD
14,343,000
4.78
JBWere (NZ) Nominees Limited
11,400,000
3.80
ANZ Fixed Interest Fund – NZCSD
10,300,000
3.43
HSBC Nominees (New Zealand) Limited – NZCSD
9,540,000
3.18
Citibank Nominees (New Zealand) Limited – NZCSD
7,920,000
2.64
BNP Paribas Nominees (NZ) Limited – NZCSD
7,320,000
2.44
ANZ Wholesale NZ Fixed Interest Fund – NZCSD
7,270,000
2.42
Forsyth Barr Custodians Limited
5,085,000
1.69
HSBC Nominees (New Zealand) Limited A/C State Street –NZCSD
2,900,000
0.96
Investment Custodial Services Limited
2,120,000
0.70
Mint Nominees Limited – NZCSD
2,075,000
0.69
Dunedin City Council
2,070,000
0.69
JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct – NZCSD
1,593,000
0.53
MT Nominees Limited – NZCSD
1,590,000
0.53
*
Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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108
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 2024 was 2,590,459,452.12
12
As at 30 June 2024, the total number of ordinary shares was 2,588,594,444, which excludes 1,865,008 ordinary shares held by Meridian as treasury stock.
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
1,321,595,587
51.01
6 July 2015
Distribution of share-
holders and holdings
as at 30 June 2024
The table opposite provides
information on the distribution
of shareholders and holdings of
Meridian Energy Limited ordinary
shares as at 30 June 2024.
Size of holding
Number of holders
%
Number of shares
Holding quantity %
1 to 1,000
7,836
18.86
5,259,549
0.20
1,001–5,000
20,081
48.34
54,323,948
2.10
5,001–10,000
7,497
18.04
56,616,218
2.19
10,001–50,000
5,553
13.36
108,119,556
4.17
50,001–100,000
380
0.91
26,664,559
1.03
100,001–500,000
146
0.35
28,125,504
1.09
>500,000
60
0.14
2,311,350,118
89.22
Total
41,553
100
2,590,459,452
100
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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109
The table opposite provides
information on the distribution
of MEL050 retail fixed-rate
bonds as at 30 June 2024.
Size of holding
Number of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
1,001 to 5,000
29
5.28
145,000
0.07
5,001 to 10,000
92
16.76
856,000
0.43
10,001 to 50,000
298
54.29
8,313,000
4.16
50,001 to 100,000
72
13.11
5,540,000
2.77
100,001 to 500,000
28
5.1
6,328,000
3.16
>500,000
30
5.46
178,818,000
89.41
Total
549
100
200,000,000
100
The table opposite provides
information on the distribution
of MEL060 retail fixed-rate
bonds as at 30 June 2024.
Size of holding
Number of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
1,001 to 5,000
31
5.48
155,000
0.08
5,001 to 10,000
156
27.56
1,443,000
0.72
10,001 to 50,000
267
47.17
6,559,000
3.28
50,001 to 100,000
46
8.13
3,483,000
1.74
100,001 to 500,000
33
5.83
7,450,000
3.73
>500,000
33
5.83
180,910,000
90.45
Total
566
100
200,000,000
100
The table opposite provides
information on the distribution
of MEL070 retail fixed-rate
bonds as at 30 June 2024.
Size of holding
Number of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
1,001 to 5,000
21
5.85
104,000
0.03
5,001 to 10,000
39
10.86
372,000
0.12
10,001 to 50,000
208
57.94
6,097,000
2.03
50,001 to 100,000
37
10.31
2,738,000
0.91
100,001 to 500,000
32
8.91
8,448,000
2.82
>500,000
22
6.13
282,241,000
94.09
Total
359
100
300,000,000
100
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
MENU
110
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 2024 are
available on Meridian’s website
NZX Waivers
bit.ly/3LPqwJM
Non-standard designation
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.
13
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.
Credit rating as
at 30 June 2024
S&P Global Ratings reaffirmed
Meridian Energy Limited’s credit
rating of BBB+/stable/A-2 on
1 November 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.
ASX disclosures
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.
• 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).
Shareholding restrictions
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 or voting securities.
51% holding
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’s holding falling
below this 51% holding.
10% Limit
No person (other than the Crown)
may have a ‘relevant interest’13 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, 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.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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111
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.
Effect of exceeding the 10% Limit
A person who is in breach of
the 10% Limit must:
• comply with any notice that
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
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.
If a relevant interest is held in any
shares in breach of the 10% Limit, then,
for as long as that breach continues:
• 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.
Trustee corporations
and nominee companies
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.
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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112
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.
NZX Corporate
Governance Code
Meridian complied with the NZX
Corporate Governance Code
recommendations in all material
respects during FY24, 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 or necessary
for Meridian to adopt a takeover
protocol, although there are
protocols to ensure compliance
with the constitution. Meridian has
a separate Corporate Governance
Statement available on its website.
The Corporate Governance
Statement outlines in detail
Meridian’s compliance with the
NZX Corporate Governance Code
and is current as at 28 August 2024.
Corporate Governance Statement
bit.ly/3Wy4sse
FURTHER DISCLOSURES
MERIDIAN INTEGRATED REPORT 2024
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113
Financial
performance
Tasman River delta running in to Lake Pukaki.
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
MENU
114
Meridian Energy has reported
operating cash flows of $667 million
for the year ending 30 June 2024,
up from $509 million the previous
year, with net profit after tax up
from $95 million to $429 million.
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
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115
Financial performance contents
GROUP FINANCIAL
STATEMENTS
117
Income Statement
The income earned and operating
expenditure incurred by the
Meridian Group during
the financial year.
117
Comprehensive
Income Statement
Items of income and operating
expense, that are not recognised
in the income statement and
hence taken to reserves in equity.
118
Balance Sheet
A summary of the Meridian
Group assets and liabilities at the
end of the financial year.
119
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.
120
Statement of Cash Flows
Cash generated and used
by the Meridian Group.
NOTES TO THE GROUP
FINANCIAL STATEMENTS
122
About this report
124
S
Significant matters
in the financial year
128
A
Financial performance
A1.
Segment performance
A2.
Income
A3.
Expenses
A4.
Taxation
135
B
Assets used to generate
and sell electricity
B1.
Property, plant
and equipment
B2.
Intangible assets
140
C
Managing funding
C1.
Capital management
C2.
Share capital
C3.
Earnings per share
C4.
Dividends
C5.
Cash and cash equivalents
C6.
Trade receivables
C7.
Borrowings
C8.
Green financing
C9.
Lease liabilities
C10.
Commitments
150
D
Financial instruments
used to manage risk
D1.
Financial risk management
162
E
Group structure
E1.
Subsidiaries and
other interests
163
F
Other
F1.
Share-based payments
F2.
Related parties
F3.
Auditor’s remuneration
F4.
Contingent assets
and liabilities
F5.
Subsequent events
F6.
Changes in financial
reporting standards
168
Signed report
Independent auditor’s report
KEY
Subsequent events
Key judgements
and estimates
Risks
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
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116
Income Statement
FOR THE YEAR ENDED 30 JUNE 2024
Note
2024
$M
2023
$M
Operating revenue
A2
4,856
3,222
Operating expenses
A3
(4,102)
(2,397)
Depreciation and amortisation
A3
(334)
(294)
Asset related adjustments
A3
(18)
(10)
Net change in fair value of energy hedges
D1
253
(375)
Finance costs
A3
(69)
(55)
Interest income
A2
12
11
Net change in fair value of treasury hedges
D1
(4)
24
Net profit before tax
594
126
Income tax expense
A4
(165)
(31)
Net profit after tax attributed
to the shareholders of the parent company
429
95
Earnings per share (EPS) attributed to
ordinary equity holders of the parent
Cents
Cents
Basic and diluted EPS
C3
16.6
3.7
Comprehensive Income Statement
FOR THE YEAR ENDED 30 JUNE 2024
Note
2024
$M
2023
$M
Net profit after tax
429
95
Other comprehensive income
Items that will not be reclassified to profit or loss:
Asset revaluation
S3, B1
3,152
1,111
Deferred tax on the above item
A4
(883)
(311)
2,269
800
Items that may be reclassified to profit or loss:
Net (loss)/gain on cash flow hedges
(7)
(11)
Income tax on the above items
2
3
(5)
(8)
Other comprehensive income for the year, net of tax
2,264
792
Total comprehensive income for the year, net of tax
attributed to shareholders of the parent company
2,693
887
The notes to the Group financial statements form an integral part of these financial statements.
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
MENU
117
Balance Sheet
AS AT 30 JUNE 2024
Note
2024
$M
Restated*
2023
$M
Current assets
Cash and cash equivalents
C5
221
212
Trade receivables
C6
536
334
Customer contract assets
12
13
Financial instruments
D1, S2
233
86
Other assets
49
47
Total current assets
1,051
692
Non-current assets
Property, plant and equipment
B1
12,192
8,989
Intangible assets
B2
62
73
Financial instruments
D1, S2
224
186
Other assets
14
–
Total non-current assets
12,492
9,248
Total assets
13,543
9,940
Note
2024
$M
Restated*
2023
$M
Current liabilities
Payables and accruals
S2
565
293
Employee entitlements
21
20
Customer contract liabilities
10
14
Current portion of borrowings
C7
234
214
Current portion of lease liabilities
C9
3
3
Financial instruments
D1, S2
86
75
Current tax payable
85
46
Total current liabilities
1,004
665
Non-current liabilities
Borrowings
C7
1,113
1,022
Deferred tax
A4
2,949
2,103
Lease liabilities
C9
27
24
Financial instruments
D1
142
111
Term payables
S2
62
28
Total non-current liabilities
4,293
3,288
Total liabilities
5,297
3,953
Shareholders’ equity
Share capital
C2
1,729
1,700
Reserves
6,517
4,287
Total shareholders’ equity
8,246
5,987
Total liabilities and shareholders’ equity
13,543
9,940
*
The Balance Sheet has been restated due to a change in presentation in the current year.
Refer to the Significant matters section Note S2 for more information.
For and on behalf of the Board of Directors who authorised
the issue of the financial statements on 27 August 2024.
Mark Verbiest
Chair
27 August 2024
Julia Hoare
Chair, Audit and Risk Committee
27 August 2024
The notes to the Group financial statements form an integral part of these financial statements.
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
MENU
118
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2024
$M
Note
Share
capital
Share
option
reserve
Revaluation
reserve
Cash flow
hedge
reserve
Retained
earnings
Total
equity
Balance at 1 July 2022
1,671
2
5,079
13
(1,242)
5,523
Net profit for the 2023 financial year
–
–
–
–
95
95
Other comprehensive income
Asset revaluation
B1, S3
–
–
1,111
–
–
1,111
Net gain (loss) on cash flow hedges
–
–
–
(11)
–
(11)
Income tax relating to other comprehensive income
A4
–
–
(311)
3
–
(308)
Total other comprehensive income, net of tax
–
–
800
(8)
–
792
Total comprehensive income for the year, net of tax
–
–
800
(8)
95
887
Share-based transactions
C2, F1
(1)
1
–
–
–
–
Dividend reinvestment plan
C4
30
–
–
–
–
30
Dividends paid/reinvested
C4
–
–
–
–
(453)
(453)
Balance at 30 June 2023 and 1 July 2023
1,700
3
5,879
5
(1,600)
5,987
Net profit for the 2024 financial year
–
–
–
–
429
429
Other comprehensive income
Asset revaluation
B1, S3
–
–
3,152
–
–
3,152
Net gain (loss) on cash flow hedges
–
–
–
(7)
–
(7)
Income tax relating to other comprehensive income
A4
–
–
(883)
2
–
(881)
Total other comprehensive income, net of tax
–
–
2,269
(5)
–
2,264
Total comprehensive income for the year, net of tax
–
–
2,269
(5)
429
2,693
Recycling of asset revaluation to retained earnings
–
–
(5)
–
5
–
Income tax relating to recycling of asset revaluation reserve
–
–
2
–
–
2
Share-based transactions
C2, F1
(2)
–
–
–
1
(1)
Dividend reinvestment plan
C4
31
–
–
–
–
31
Dividends paid/reinvested
C4
–
–
–
–
(466)
(466)
Balance at 30 June 2024
1,729
3
8,145
–
(1,631)
8,246
The notes to the Group financial statements form an integral part of these financial statements.
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
MENU
119
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2024
Note
2024
$M
2023
$M
Operating activities
Receipts from customers
4,614
3,354
Interest received
12
11
Payments to suppliers and employees
(3,719)
(2,637)
Interest paid
(80)
(65)
Income tax paid
(160)
(154)
Operating cash flows
C5
667
509
Investing activities
Sale of property, plant and equipment
–
2
Purchase of property, plant and equipment
(281)
(316)
Purchase of intangible assets
(40)
(13)
Sale of subsidiaries
8
–
Purchase of other assets
(14)
–
Investing cash flows
(327)
(327)
Financing activities
Borrowings drawn
C7
467
255
Borrowings repaid
C7
(357)
(160)
Lease liabilities repaid
C7
(3)
(3)
Dividends paid
C4
(436)
(423)
Shares purchased for long-term incentive
C2
(2)
(2)
Financing cash flows
(331)
(333)
Net increase/(decrease) in cash and cash equivalents
9
(151)
Cash and cash equivalents at beginning of year
212
363
Cash and cash equivalents at end of year
C5
221
212
The notes to the Group financial statements form an integral part of these financial statements.
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
MENU
120
Harapaki Wind Farm, Hawke’s Bay.
FINANCIAL PERFORMANCE
MERIDIAN INTEGRATED REPORT 2024
MENU
121
Notes to the Group financial statements
About this report
IN THIS SECTION
The notes to the financial
statements include information
which is considered relevant
and material to assist the reader
in understanding changes in
Meridian’s 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 Energy Limited (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
Level 2, 98 Customhouse Quay,
Wellington. 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, it 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 IFRS Accounting
Standards issued by the International
Accounting Standards Board, and
the New Zealand equivalents, 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.
Basis of consolidation
The Group financial statements comprise
the financial statements of Meridian and
its subsidiaries and controlled entities,
outlined in Note E1 Subsidiaries and
other interests.
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.
ABOUT THIS REPORT
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
122
Foreign currency
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 2024.
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 is British
pounds; the closing rate at 30 June 2024
was 0.4814 (30 June 2023: 0.4822).
A full list of international subsidiaries and
their functional currencies are provided
in Note E1 Subsidiaries and other interests.
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 which are
considered material to understanding
the performance of Meridian are
found in the following notes:
• A2: Income;
• B1: Property, plant and equipment;
and
• D1: Financial risk management
SIGNIFICANT MATTERS IN THE FINANCIAL YEAR
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
123
S Significant matters in the financial year
IN THIS SECTION
This section outlines significant
matters that have impacted
Meridian’s financial performance.
S1 New Zealand
Aluminium Smelter (NZAS)
On 31 May 2024, Meridian announced
that it has signed a package of
conditional, 20-year contracts with
NZAS, for part of NZAS electricity
needs. On 26 June 2024, Meridian
announced the contracts were
unconditional and would come into
effect from 3 July 2024 (meaning the
old NZAS contracts would come to an
end at midnight on 2 July 2024).
The new contract package includes
a long-term fixed price contract for
wholesale electricity price cover (base
contract) and a demand response
agreement (DRA).
Key terms of the contracts are as follows:
• 472MW base contract volume from
3 July 2024 to 31 December 2024, then
377MW from 1 January 2025 onward;
• four demand response options,
ranging from 25MW to 185MW. Three
quarters of a called option will come
off Meridian contracted volume;
• pricing that begins 1 July 2024, up
to and including 31 December 2044;
• pricing includes links to Consumer
Price Inflation (CPI) from 1 January
2028 subject to London Metal
Exchange Aluminium prices in the
previous year being higher than the
year before the previous year; and
• a termination clause, whereby
NZAS may provide two years’
notice of termination any time from
31 December 2032 onwards, but
must make an irrevocable payment
of $180 million to Meridian when
providing that notice.
Meridian will account for these as follows:
• the base contract will be accounted
for as a derivative, with its impacts
presented on Balance Sheet within
financial instruments and in the
Income Statement in net change in
fair value of energy hedges;
• the DRA will be accounted for as an
executory contract, meaning that
premium payments will be recognised
in the Income Statement in
Operating expenses as incurred;
• an embedded derivative will be
recognised in respect of the CPI
pricing terms in the DRA, with its
impacts presented on Balance Sheet
within Financial instruments and in
the Income Statement in Net change
in fair value of energy hedges; and
• hedge accounting will not be applied
to either the base contract or the DRA
embedded derivative.
SIGNIFICANT MATTERS IN THE FINANCIAL YEAR
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
124
This will mark a significant change in
Meridian’s accounting for the NZAS
contracts. In recent years, Meridian
has accounted for the NZAS contracts
as follows:
• the old base contract has been
accounted for as an executory
contract, meaning that fixed-price
receipts from NZAS were recognised
in the Income Statement in Operating
income as incurred, and floating price
payments to NZAS were recognised
in the Income Statement in Operating
expenses as incurred; and
• the old DRA has been accounted
for as a derivative asset (in respect
of future call value to Meridian),
with accompanying amortised cost
liability (in respect of premiums
payable to NZAS). Each period, the
derivative asset unwinds to the Income
Statement in Net changes in fair value
of energy hedges and the amortised
cost liability reduces as premium
payments are made to NZAS.
In terms of impact to the current financial
year, the most material impact is on
our valuation of generation structures.
Meridian holds generation structure
assets at fair value, and until 31 May 2024
that fair value was calculated on the
assumption NZAS would cease operating
by 31 December 2024. The new contracts
mean that the assumed end date shifts
to 31 December 2044 and the forward
curve assumptions used in our valuation
includes the impact of the new contract
pricing. Refer to notes S3 and B1 for
more information on the fair value of
generation structures.
For future financial years, the new
contracts will mean the following impacts
compared to previous financials years:
• in the Income Statement, Operating
income and Operating expenses will
reduce, as the NZAS base contract
related components of these cease
to exist;
• in the Income Statement, Operating
expenses will increase, as DRA
premium expenses and DRA call fee
expenses are recorded as incurred;
• in the Income Statement, Net
changes in fair value of energy
hedges may become more volatile,
impacted by realised settlements
on the base contract, unrealised
fair value movements on the base
contract, and remeasurements of the
DRA embedded derivative; and
• in the Balance Sheet, Financial
instrument balances will become
more volatile, impacted by unrealised
fair value movements on the base
contract, and remeasurements of
the DRA embedded derivative.
S2 Restatement of presentation of
Financial Transmission Rights (FTRs)
Meridian has amended its balance
sheet presentation of FTRs. FTRs are
Level 1 energy hedges used to manage
locational price risk. Meridian previously
disclosed FTRs gross, with:
• acquisition cost classified as a liability
(in Payables and accruals for current
amounts due, and in Term payables
for non-current amounts due); and
• the hedge value classified as assets
(in Financial instruments).
As FTRs are net settled, the Group has
changed its Balance Sheet presentation
in the current period and restated the
prior year. The effects of this change in
presentation on the consolidated balance
sheet are shown in the following table.
BALANCE SHEET
2023
Restated
$M
2023
$M
Change
$M
Financial instruments (current asset)
86
141
(55)
Financial instruments (non current asset)
186
213
(27)
Financial instruments (current liability)
75
71
4
Payables and accruals
293
352
(59)
Term payables
28
55
(27)
SIGNIFICANT MATTERS IN THE FINANCIAL YEAR
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
125
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.
At 30 June 2024, a valuation of
Meridian’s generation structures and
plant assets has been undertaken to
determine the fair value of the assets as
at this date. The valuation has resulted
in a net increase of $3,152 million (2023:
increase of $1,111 million). As noted earlier
in the Significant Matters section, the
rise in value is driven mainly by the
change in price forecast and a reduction
in Meridian’s Weighted Average Cost
of Capital (WACC). Since 2021, the
price path used for valuation purposes
was based on NZAS closing the Tiwai
Point Aluminium Smelter, whereas it
is now based on NZAS keeping that
smelter open. Management calculates a
valuation on which the Board’s ultimate
decision is based. The valuation is set
using discounted cashflow (DCF) analysis
and assumes NZAS continues to operate
until 31 December 2044.
Refer to Note B1 Property, plant and
equipment for more information.
West Wind Farm, Te Whanganui a Tara Wellington.
SIGNIFICANT MATTERS IN THE FINANCIAL YEAR
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
126
Significant matters in the financial year
IN THIS SECTION
This sections sets out significant
matters which have impacted
Meridian’s financial performance
and an explanation of non-GAAP
measures within the notes to the
financial statements.
Non-GAAP measures
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
below, including note references for
reconciliations to the financial statements.
EBITDAF
Earnings before interest, tax, depreciation,
amortisation, unrealised changes in fair
value of hedges, impairments and gains
or losses on sale of assets.
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
Energy margin provides a measure of
financial performance that, unlike total
revenue, accounts for the variability of
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 Meridian’s
segmental financial performance 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.
SIGNIFICANT MATTERS IN THE FINANCIAL YEAR
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
127
FINANCIAL PERFORMANCE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
128
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:
accounting policies,
judgements and estimates
that are relevant for
understanding items
recognised in the Income
Statement; and
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:
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 Retail segment and to large
industrial customers, including NZAS
representing the equivalent of 37%
(30 June 2023: 36%) of Meridian’s
New Zealand generation production.
• Development of renewable
electricity generation opportunities
in 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
$133 per megawatt hour (MWh)
(2023:$104 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”.
Other and unallocated
• Other operations, that are not
considered reportable segments,
include licensing of the Flux
developed electricity and gas
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.
FINANCIAL PERFORMANCE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
129
A1 Segment performance continued
Wholesale
Retail
Other and
Unallocated
Inter-segment
Total
2024
$M
2023
$M
2024
$M
2023
$M
2024
$M
2023
$M
2024
$M
2023
$M
2024
$M
2023
$M
Contracted sales, net of distribution costs and hedging
633
530
1,363
1,208
–
–
–
–
1,996
1,738
Cost to supply customers, net of hedging
(3,487)
(1,549)
(1,326)
(1,006)
–
–
1,507
1,065
(3,306)
(1,490)
Net cost of other hedges
285
(121)
–
–
–
–
–
–
285
(121)
Generation spot revenue, net of hedging
2,319
1,020
–
–
–
–
–
–
2,319
1,020
Inter-segment electricity sales
1,507
1,065
–
–
–
–
(1,507)
(1,065)
–
–
Virtual asset swap margins
(9)
(7)
–
–
–
–
–
–
(9)
(7)
Other market revenue/(costs)
(9)
(9)
–
1
–
–
–
–
(9)
(8)
Energy margin (see reconciliation on next page)
1,239
929
37
203
–
–
–
–
1,276
1,132
Other revenue
4
3
18
16
23
23
(9)
(13)
36
29
Energy transmission expenses
(73)
(80)
–
–
–
–
–
–
(73)
(80)
Hosting expenses
–
–
–
–
(4)
(3)
–
–
(4)
(3)
Electricity metering expenses
–
–
(49)
(46)
–
–
–
–
(49)
(46)
Gross margin
1,170
852
6
173
19
20
(9)
(13)
1,186
1,032
Employee expenses
(31)
(27)
(38)
(36)
(65)
(56)
–
–
(134)
(119)
Other operating expenses
(67)
(65)
(40)
(34)
(48)
(38)
8
7
(147)
(130)
EBITDAF
1,072
760
(72)
103
(94)
(74)
(1)
(6)
905
783
Depreciation and amortisation
(334)
(294)
Asset related adjustments
(18)
(10)
Net change in fair value of energy hedges (see reconciliation on next page)
102
(333)
Finance costs
(69)
(55)
Interest income
12
11
Net change in fair value of treasury hedges
(4)
24
Net profit before tax
594
126
Income tax expense
(165)
(31)
Net profit after tax attributed to the shareholders of the parent company
429
95
FINANCIAL PERFORMANCE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
130
A1 Segment performance continued
RECONCILIATION OF ENERGY MARGIN
Note
2024
$M
2023
$M
Energy sales to customers
A2
2,487
2,140
Generation revenue
A2
2,333
1,053
Energy expenses
A3
(2,956)
(1,331)
Energy distribution expenses
A3
(739)
(688)
Realised energy hedges (see below)
151
(42)
Energy margin
1,276
1,132
RECONCILIATION OF EBITDAF
Note
2024
$M
2023
$M
Operating income
A2
4,856
3,222
Operating expenses
A3
(4,102)
(2,397)
Realised energy hedges (see below)
151
(42)
EBITDAF
905
783
RECONCILIATION OF NET CHANGE IN FAIR VALUE OF ENERGY HEDGES
2024
$M
2023
$M
Realised energy hedges shown within energy margin (see above)
151
(42)
Unrealised changes in the fair value of energy hedges (as noted on previous page)
102
(333)
Net change in fair value of energy hedges, per the Income Statement
253
(375)
FINANCIAL PERFORMANCE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
131
A2 Income
OPERATING REVENUE
2024
$M
2023
$M
Energy sales to customers
2,487
2,140
Generation revenue
2,333
1,053
Energy-related services revenue
11
10
Other revenue
25
19
Total operating revenue
4,856
3,222
2024
$M
2023
$M
Interest income
12
11
Operating revenue
All revenue was generated in New Zealand.
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.
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.
Revenue
Electricity consumption
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.
Supply contract with NZAS
The current 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.
Refer to the Significant Matters
section on how this will change
under the new NZAS contracts.
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.
FINANCIAL PERFORMANCE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
132
A3 Expenses
OPERATING EXPENSES
2024
$M
2023
$M
Energy expenses
2,956
1,331
Energy distribution expenses
739
688
Energy transmission expenses
73
80
Hosting expenses
4
3
Employee expenses
134
119
Energy metering expenses
49
46
Other expenses
147
130
Total operating expenses
4,102
2,397
DEPRECIATION AND AMORTISATION
Note
2024
$M
2023
$M
Depreciation of property, plant and equipment
B1
304
266
Amortisation of intangibles
B2
30
28
Total depreciation and amortisation
334
294
FINANCE COSTS
Note
2024
$M
2023
$M
Interest on borrowings
83
67
Interest on electricity option premiums
1
1
Interest on lease liabilities
C9
2
2
Less: Capitalised interest
(17)
(15)
Total finance costs
69
55
ASSET RELATED ADJUSTMENTS
2024
$M
2023
$M
Impairment of property, plant & equipment and other assets
18
8
Write down of inventory to net realisable value
–
2
Loss on disposal of property, plant & equipment
8
–
(Gain) on sale of subsidiaries
(8)
–
Total
18
10
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.
Energy metering expenses
The cost of electricity meters, meter
reading and data gathering of retail
customer electricity consumption.
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 (largely KiwiSaver) were $5 million
in 2024 (30 June 2023: $5 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
5.53% (2023: 5.36%).
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.
The current year impairment expense
relates to software assets, refer to Note B2
Intangible assets for more information.
FINANCIAL PERFORMANCE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
133
A4 Taxation
TAX EXPENSE
2024
$M
2023
$M
Current income tax expense
198
167
Other permanent differences
–
4
Adjustments to tax of prior years
–
(3)
Total current tax expense
198
168
Deferred tax
(34)
(131)
Adjustments to tax of prior years
1
(6)
Total tax
165
31
Reconciliation to profit before tax
Profit before tax
594
126
Income tax at applicable rates
166
35
Expenditure not deductible for tax
(2)
–
Income tax (over)/under provided in prior year
–
(3)
Other
1
(1)
Tax expense
165
31
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%
(2023: 28%).
FINANCIAL PERFORMANCE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
134
A4 Taxation continued
DEFERRED TAX LIABILITIES
2024
$M
2023
$M
Balance at beginning of year
2,103
1,932
Temporary differences in income statement:
Depreciation and amortisation
(66)
(59)
Term payables
3
5
Financial instruments
29
(86)
Customer contract assets
(1)
(1)
Other payables and receivables
1
4
(34)
(137)
Temporary differences in other comprehensive income:
Revaluation reserve movements
883
311
Other
(3)
(3)
Balance at end of year
2,949
2,103
Made up of:
Property, plant and equipment
2,899
2,084
Term payables
(9)
(12)
Financial instruments
47
19
Customer contract assets
3
4
Other payables and receivables
9
8
Deferred tax liability
2,949
2,103
Total deferred tax
2,949
2,103
Deferred tax liabilities
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 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.
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.
During the reporting period, the New
Zealand government passed legislation to
remove commercial building depreciation
for tax purposes. This did not have a
material impact on Meridian’s deferred tax
liability balance or income tax expense.
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.
Pillar Two
Meridian is within the scope of the
Organisation for Economic Co-operation
and Development Pillar Two Model
Rules on Base Erosion and Profit Shifting.
The intention of the Pillar Two rules is to
ensure a minimum global effective tax
rate of 15% is paid across all jurisdictions
and is expected to apply to Meridian
from 1 July 2024.
Meridian has applied the exception to
recognising and disclosing information
about deferred tax assets and liabilities
related to Pillar Two income taxes. The
Pillar Two rules are enacted in countries
in which Meridian operates but not
yet in effect. Since Meridian does not
have significant operations in low-tax
jurisdictions, the rules are not expected
to have a material impact.
B Assets used to generate and sell electricity
IN THIS SECTION
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:
property, plant and
equipment; and
intangible assets.
B1 Property, plant and equipment
$M
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
Total
Cost or fair value
7,472
56
148
48
232
7,956
Less accumulated depreciation
–
(7)
(105)
(12)
(2)
(126)
Net book value at 30 June 2022
7,472
49
43
36
230
7,830
Additions
–
–
–
–
328
328
Transfers – work in progress
5
1
10
–
(16)
–
Adjustment of Right of use lease assets
–
–
–
(1)
–
(1)
Disposals
–
–
(1)
–
–
(1)
Impairments
–
–
(3)
(9)
–
(12)
Generation structures and plant revaluations:
Increase (decrease) taken to revaluation reserve
1,111
–
–
–
–
1,111
Depreciation expense
(254)
(1)
(9)
(2)
–
(266)
Net book value at 30 June 2023
8,334
49
40
24
542
8,989
Cost or fair value
8,334
55
139
35
544
9,107
Less accumulated depreciation14
–
(6)
(99)
(11)
(2)
(118)
Net book value at 30 June 2023
8,334
49
40
24
542
8,989
Additions
–
–
–
7
368
375
Transfers – work in progress
426
11
12
–
(449)
–
Adjustment of Right of use lease assets
–
–
–
(3)
–
(3)
Disposals
(10)
(4)
(3)
–
–
(17)
Impairments
–
–
–
–
–
–
Generation structures and plant revaluation:
Increase (decrease) taken to revaluation reserve
3,152
–
–
–
–
3,152
Depreciation expense
(293)
(1)
(8)
(2)
–
(304)
Net book value at 30 June 2024
11,609
55
41
26
461
12,192
Cost or fair value
11,609
60
120
39
461
12,289
Less accumulated depreciation14
–
(5)
(79)
(13)
–
(97)
Net book value at 30 June 2024
11,609
55
41
26
461
12,192
At 30 June 2024, 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
$1.4 billion (30 June 2023: $1.2 billion).
14
Includes the reversal of accumulated
depreciation on generation structures
and plant at revaluation date.
ASSETS USED TO GENERATE AND SELL ELECTRICITY
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
135
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.
Included in work in progress at cost
in 2024 are costs in relation to the
reconsenting of Meridian’s Waitaki Hydro
Scheme which provide for mitigation of
environmental effects under agreements
entered into with various stakeholders
as part of the reconsenting process.
This reflects Meridian’s long term
commitment to the region and aims
to address existing and future adverse
effects on those stakeholders of the
continuing ongoing operation of the
Waitaki Hydro Scheme.
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.
Where a generation asset is partly
completed over a reporting period,
revaluation is only applied to the
completed portion of the generation
asset. Value relating to uncompleted
assets remains in work in progress and
is held at cost.
Meridian performed a valuation
assessments of its plant assets at
30 June 2024.
The revaluation resulted in a net
increase of $3,152 million (2023: increase
of $1,111 million) in the carrying value
of our generation structures and plant
assets. The impact of the revaluation
was recognised as an increase of
$3,152 million (2023: increase of
$1,111 million) in the revaluation reserve.
As a consequence of the revaluation,
accumulated depreciation on generation
assets is reset to nil. There was no
depreciation impact of this revaluation
in the Income Statement.
ASSETS USED TO GENERATE AND SELL ELECTRICITY
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
136
B1 Property, plant and equipment continued
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, current and forecast
reconsenting costs and NZAS continuing
to operate until 31 December 2044.
The forward curve assumptions used in
our valuation include the impact of the
new NZAS contract pricing.
The DCF valuation was prepared using
a 35 year time period (2023: 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, both
physical in nature (such as hydrological
seasonality and variability) and
transitional (such as energy demand
changes as New Zealand decarbonises).
As part of its valuation process, Meridian
ensures that the inputs used are in line
with the anticipated impacts identified
as part of its climate-related risk and
opportunity assessment.
The table below describes the key
inputs and their sensitivity to changes.
2024
2023
Key input to
measure fair value
Description
Range of
unobservable inputs
Sensitivity
Impact on
valuation
Range of
unobservable inputs
Sensitivity
Impact on
valuation
Future NZ wholesale
electricity prices
The price received
for NZ generation
$68MWh to $129MWh between
FY25 and FY59 (in real terms)
+$3MWh
-$3MWh
$444M
($444M)
$43MWh to $150MWh between
FY24 and FY43 (in real terms)
+$3MWh
-$3MWh
$456M
($456M)
New Zealand
generation volume
Annual generation
production
13,232 GWh p.a. to
13,732 GWh p.a.
+250GWh
-250GWh
$333M
($333M)
13,304 GWh p.a. to
13,804 GWh p.a.
+250GWh
-250GWh
$210M
($210M)
Operating expenditure
(excluding electricity
purchase costs or
transmission charges)
Meridian’s cost
of operations
Inflated at appropriate
escalation rates
+$10M
-$10M
($134M)
$134M
$154M in FY24, $163M in FY25
(in real terms) and inflated at
appropriate escalation rates
from FY26 onward
+$10M
-$10M
($116M)
$116M
Weighted Average
Cost of Capital (WACC)
The discount rate
considers the time value
of money and relative
risk of achieving the
cash flow forecast
7.68%
+0.75%
-0.75%
($1,187M)
$1,523M
8.40%
+0.5%
-0.5%
($585M)
$683M
Sensitivities show the movement in fair value as a result of a change in each input (keeping all other inputs constant).
ASSETS USED TO GENERATE AND SELL ELECTRICITY
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
137
B1 Property, plant and equipment continued
Depreciation
Depreciation of property, plant
and equipment assets, other than
freehold land, is calculated on a
straight-line basis. This allocates
the cost or fair value 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.
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.
Benmore Power Station, Waitaki Valley.
ASSETS USED TO GENERATE AND SELL ELECTRICITY
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
138
B2 Intangible assets
$M
Software
Cost or fair value
224
Less accumulated amortisation
(139)
Net book value at 30 June 2022
85
Additions
18
Impairment
(2)
Amortisation expenses
(28)
Net book value at 30 June 2023
73
Cost or fair value
236
Less accumulated amortisation
(163)
Net book value at 30 June 2023
73
Additions
37
Impairment
(18)
Amortisation expenses
(30)
Net book value at 30 June 2024
62
Cost or fair value
263
Less accumulated amortisation
(201)
Net book value at 30 June 2024
62
Software
Acquired computer software licences
(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.
The current year impairment is in relation
to Flux Federation Limited’s billing
platform and the Flux Board’s decision
to refocus global efforts back to the
Australasian market.
Useful lives
Meridian uses its judgement in
determining the remaining useful lives
and residual value of intangible assets,
which are:
• electricity and gas 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.
ASSETS USED TO GENERATE AND SELL ELECTRICITY
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
139
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
140
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:
equity and dividends;
net debt;
receivables and payables;
and
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.
Note
2024
$M
2023
$M
Share capital
C2
1,729
1,700
Retained earnings
(1,631)
(1,600)
Other reserves
8,148
5,887
8,246
5,987
Drawn borrowings
C7
1,331
1,221
Lease liabilities payable
C9
30
27
Less: cash and cash equivalents
C5
(221)
(212)
1,140
1,036
Net capital
9,386
7,023
Note
2024
$M
2023
$M
Net debt to EBITDAF
Drawn borrowings
C7
1,331
1,221
Lease liabilities payable
C9
30
27
Less: cash and cash equivalents
C5
(221)
(212)
Add back: restricted cash
C5
134
196
Net debt (A)
1,274
1,232
EBITDAF (B)
905
783
Net debt to EBITDAF (times) (A/B)
1.4
1.6
Note
2024
$M
2023
$M
EBITDAF Interest cover
EBITDAF (B)
905
783
Interest on borrowings
A3
83
67
Interest on lease liabilities
A3
2
2
Interest (C)
85
69
EBITDAF interest cover (times) (B/C)
10.6
11.3
Standard & Poor’s rating
BBB+
BBB+
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
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C2 Share capital
SHARE CAPITAL
2024
2023
Shares
$M
Shares
$M
Shares issued
2,590,459,452
1,738
2,584,734,122
1,708
Treasury shares held
(1,865,008)
(9)
(1,565,008)
(8)
Share capital
2,588,594,444
1,729
2,583,169,114
1,700
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)
2024
2023
Net profit after tax attributed to the shareholders of the parent company
$429M
$95M
Weighted average number of shares used in the calculation of EPS
2,587,596,787
2,581,801,567
Basic and diluted EPS (cents per share)
16.6
3.7
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
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C4 Dividends
DIVIDENDS DECLARED AND PAID
2024
$M
2023
$M
Interim ordinary dividend 2024: 6.15cps (cents per share) (2023: 6cps)
159
155
Final ordinary dividend 2023: 11.9cps (2022: 11.55cps)
307
298
Total dividend expense
466
453
Dividends declared and not recognised as a liability
Final ordinary dividend 2024: 14.85cps (2023: 11.90cps)
384
307
Imputation credit balance
Imputation credits available for future use at 30 June 2024
83
71
Dividend policy
The Board approved a new dividend
policy on 27 August 2024. Under the new
policy Meridian is to make distributions
at a dividend payout ratio within an
average over time of 80% to 100% of
Operating Free Cash Flow (defined as
Operating Cash Flow, less the annual
cost of maintaining Meridian’s asset
base and systems). This is subject to the
Board’s due consideration of working
capital requirements, the medium-term
investment programme, maintaining a
BBB+ credit rating and risks from short
and medium-term economic, market,
catchment hydrology conditions and
expected financial performance.
Meridian’s previous 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.
Dividend Reinvestment Plan (DRP)
Meridian operates a DRP under which
shareholders can elect to receive
dividends in additional shares rather
than cash.
For the September 2023 final dividend
payment, new shares were issued
at the prevailing market price of
Meridian shares around the time of
issue. Meridian investors were issued
3,838,342 new shares with a value of
$19 million (2023: 3,864,321 shares
with a value of $19 million).
For the March 2024 interim dividend
payment, new shares were issued
at the prevailing market price of
Meridian shares around the time of
issue. Meridian investors were issued
1,886,988 new shares with a value of
$11 million (2023: 2,000,790 shares
with a value of $11 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 30 June 2024. It does not recognise
any tax payments between balance
date and 27 August 2024.
Dividend declared
On 27 August 2024 the Board
declared a partially imputed
final ordinary dividend of
14.85 cents per share.
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
143
C5 Cash and cash equivalents
CASH AND CASH EQUIVALENTS
2024
$M
2023
$M
Current account
221
212
Cash and cash equivalents
221
212
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 2024, this collateral was $134 million (30 June 2023: $196 million).
All other cash and cash equivalent balances are available for use.
RECONCILIATION OF NET PROFIT AFTER TAX
TO CASH FLOWS FROM OPERATING ACTIVITIES
2024
$M
2023
$M
Net profit after tax
429
95
Adjustments for operating activities’ non-cash items:
Depreciation and amortisation
334
294
Movement in deferred tax
(33)
(137)
Net change in fair value of financial instruments
(98)
308
Electricity option premiums
(24)
(19)
Non-cash finance costs
5
–
Other non-cash items in working capital
(48)
(23)
Share-based payments
2
1
138
424
Items classified as investing activities:
Loss on disposal of property, plant & equipment
8
–
(Gain) on sale of subsidiaries
(8)
–
–
–
Changes in working capital items:
(Increase)/decrease in accounts receivable
(202)
65
(Increase)/decrease in customer contract assets
1
3
(Increase)/decrease in other assets
(2)
2
Increase/(decrease) in payables and accruals/employee entitlements
273
(95)
Increase/(decrease)in customer contract liabilities
(4)
2
Increase/(decrease) in current tax payable
39
15
Working capital items in financing activities
(5)
(2)
100
(10)
Cash flow from operating activities
667
509
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
144
C6 Trade receivables
TRADE RECEIVABLES
2024
$M
2023
$M
Accrued receivables
493
303
Current billed
27
16
Past due 1 to 30 days
16
15
Past due 31 to 60 days
2
2
Past due 61 to 90 days
1
1
Past due greater than 90 days
1
1
Less: credit loss allowance
(4)
(4)
Total trade receivables
536
334
Accounts receivable past due less credit loss allowance
16
15
Movement in provision for credit loss allowance
Opening provision
(4)
(8)
Provision released (created) in the year
(1)
3
Provision used in the year
1
1
Closing provision for credit loss allowance
(4)
(4)
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 2023:
$1 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 for New
Zealand, with a large rise in forecast
unemployment acting as a trigger for
us to reconsider the probability rates
in our matrices.
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
145
C7 Borrowings
$M
2024
2023
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
Current borrowings
Unsecured borrowings
NZD
235
(1)
–
234
215
(1)
–
214
Total current borrowings
235
(1)
–
234
215
(1)
–
214
Non-current borrowings
Unsecured borrowings
NZD
510
–
–
510
420
–
–
420
Unsecured borrowings
USD
586
(1)
18
603
586
(1)
17
602
Total non-current borrowings
1,096
(1)
18
1,113
1,006
(1)
17
1,022
Total borrowings
1,331
(2)
18
1,347
1,221
(2)
17
1,236
Borrowings, measurement
and recognition
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 detail on
this. 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
reporting currency. More information on
Meridian’s risk management and hedge
accounting practices can be found in
Section D Financial instruments used to
manage risk.
Security
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.
2024
$M
2024
$M
2023
$M
2023
$M
FAIR VALUE OF ITEMS HELD AT AMORTISED COST
Carrying
value
Fair
value
Carrying
value
Fair
value
Retail bonds
700
701
550
543
Unsecured term loan (EKF facility)
20
20
30
31
Within 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.
Fair value is calculated using a discounted
cash flow calculation and the resultant
values would be classified as Level 2
within the fair 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).
Carrying value approximates fair value for
all other instruments within borrowings.
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
146
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.
2024
$M
Balance at
30 June 2023
Borrowings
drawn
Borrowings
repaid
Valuation
adjustments
Foreign
Exchange
Lease liability
remeasurement
Lease
liabilities
repaid
Lease
recognition
(derecognition)
Unwind of
discounting
Balance at
30 June 2024
Unsecured borrowings – NZD
634
467
(357)
–
–
–
–
–
–
744
Unsecured borrowings – USD
602
–
–
(3)
4
–
–
–
–
603
Lease liabilities
27
–
–
–
–
(3)
(3)
7
2
30
Total
1,263
467
(357)
(3)
4
(3)
(3)
7
2
1,377
2023
$M
Balance at
1 July 2022
Borrowings
drawn
Borrowings
repaid
Valuation
adjustments
Foreign
Exchange
Lease liability
remeasurement
Lease
liabilities
repaid
Lease
recognition
(derecognition)
Unwind of
discounting
Balance at
30 June 2023
Unsecured borrowings – NZD
539
255
(160)
–
–
–
–
–
–
634
Unsecured borrowings – USD
624
–
–
(34)
12
–
–
–
–
602
Lease liabilities
41
–
–
–
–
(2)
(3)
(11)
2
27
Total
1,204
255
(160)
(34)
12
(2)
(3)
(11)
2
1,263
2024
2023
SOURCES OF FUNDING ($M)
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
Bank facilities
New Zealand bank facilities15
NZD
625
–
625
550
15
535
EKF funding16
NZD
20
20
–
30
30
–
Total bank facilities
645
20
625
580
45
535
Other sources of borrowing
Retail bonds17
NZD
700
700
–
550
550
–
Fixed rate bonds18
USD
586
586
–
586
586
–
Commercial paper19
NZD
25
25
–
40
40
–
Total other sources of borrowing
1,311
1,311
–
1,176
1,176
–
Total sources of funding
1,956
1,331
625
1,756
1,221
535
15 Funding bears interest at the relevant market floating
rate plus a margin – unsecured NZD borrowing.
16 EKF facility is an unsecured amortising loan, provided
by the official export credit agency of Denmark, for
the construction of Te Uku Wind Farm – unsecured
NZD borrowing.
17 Retail Bonds are senior unsecured retail bonds bearing
interest rates of 4.21%, 5.91% and 5.40% (FY23: 4.88%,
4.21% and 5.91%) – unsecured NZD borrowing.
18 USD fixed rate bonds are unsecured fixed rate bonds
issued in the United States Private Placement Market –
unsecured USD borrowing.
19 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.
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
147
C8 Green financing
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).
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 Business Assurance Australia Pty
Ltd (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 Climate Bonds
Standard (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 is provided within the following
documents (also available on Meridian’s
website via link below):
• DNV Periodic Assurance Opinion
2024, Climate Bonds Standard Project
Pool (Wind) 12 August 2024; and
• DNV Periodic Second Party Opinion
2024, Green Bond & Loan Principles
Project Pool (Hydro) 12 August 2024.
The proceeds of Meridian’s debt
instruments, outlined in the tables on
the following page, have been allocated
(directly or notionally) to refinance
eligible wind and hydro projects and
assets that meet the market standards.
Further information on the Green
Finance Programme, including the
Programme framework document,
opinions from DNV, CBS Certification
and Green Asset and Debt registers
are available on Meridian’s website.
Green finance
bit.ly/3M429bx
Aviemore Unit intakes with Lake Waitaki in the background, Waitaki Valley.
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
148
C8 Green financing continued
Green Debt Instruments under Meridian’s Green Finance Programme
20 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.
21
United States private placement (USPP) Notes are included as the NZD equivalent under the Cross-Currency Interest Rate Swaps related to the Issue.
22 Committed Bank facilities are included at the face value of the facilities.
23 Commercial Paper is included as the amount on issue.
24 Certification by the Climate Bonds Standard Board on behalf of the Climate Bonds Initiative.
Green Debt allocated to the Hydro Pool20
30 June 2024
30 June 2023
TYPE ($M)
CUSIP/NZX Code
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Facility
amount
Drawn
facility
amount
USPP Series 2014-1 Tranche B21
Q5995#AH7
USD
147
147
147
147
USPP Series 2019-1 Tranche A21
Q5995#AE4
USD
183
183
183
183
USPP Series 2019-1 Tranche B21
Q5995#AF1
USD
183
183
183
183
USPP Series 2019-1 Tranche C21
Q5995#AG9
USD
73
73
73
73
Total Fixed Rate Bonds
586
586
586
586
New Zealand Bank Facilities22
NZD
625
–
550
15
Commercial Paper23
NZD
25
25
40
40
Total Green Debt allocated to the Hydro Pool
1,236
611
1,176
641
Green Debt allocated to the Wind Pool24
30 June 2024
30 June 2023
Type ($M)
CUSIP/NZX Code
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Facility
amount
Drawn
facility
amount
Retail Bond (Mar-24)
MEL040
NZD
–
–
150
150
Retail Bond (Jun-25)
MEL050
NZD
200
200
200
200
Retail Bond (Sep-28)
MEL060
NZD
200
200
200
200
Retail Bond (Mar-30)
MEL070
NZD
300
300
–
–
Total Domestic Bonds
700
700
550
550
EKF Amortising Facility
NZD
20
20
30
30
Total Green Debt allocated to the Wind Pool
720
720
580
580
Total Green Debt
1,956
1,331
1,756
1,221
MANAGING FUNDING
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
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149
C9 Lease liabilities
LEASE LIABILITIES ANALYSIS
2024
$M
2023
$M
Minimum lease payments
Not later than 1 year
3
3
Later than 1 year and not later than 3 years
7
6
Later than 3 years and not later than 5 years
7
6
Later than 5 years
28
22
Gross future lease payables
45
37
Less future finance costs
(15)
(10)
Present value of lease liabilities
30
27
Analysed as:
Not later than 1 year
3
3
Later than 1 year and not later than 3 years
6
5
Later than 3 years and not later than 5 years
5
4
Later than 5 years
16
15
Present value of lease liabilities
30
27
Comprising:
Current
3
3
Non-current
27
24
Present value of lease liabilities
30
27
Lease liabilities, measurement
and recognition
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 4.10% (30 June 2023: 3.41%).
Lease details
The 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 2023:
$2 million) in the Income Statement.
Refer to Note B1 Property, plant and
equipment for details of the related
right of use lease assets.
C10 Commitments
Group
CAPITAL EXPENDITURE COMMITMENTS
2024
$M
2023
$M
Property, plant and equipment
74
333
Intangibles
2
–
Total capital expenditure commitments
76
333
Guarantees
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 $200 million
(30 June 2023: $80 million).
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
150
D Financial instruments used to manage risk
IN THIS SECTION
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:
outlining Meridian’s
approach to financial risk
management; and
analysing financial
(hedging) instruments
used to manage risk.
D1 Financial risk management
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 energy 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.
Financial instrument recognition
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.
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
151
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 borrowings
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
$200 million for Meridian’s general
operations (30 June 2023: $80 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.
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
152
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.
2024
$M
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
2024
carrying
value
Borrowings
301
66
703
630
1,700
(3)
(350)
1,347
Lease liabilities
3
7
7
28
45
–
(15)
30
Payables, accruals, provisions
and option premiums
596
10
18
126
750
–
(92)
658
Treasury hedges
18
1
5
–
24
–
4
28
Energy hedges
65
35
48
115
263
–
(63)
200
983
119
781
899
2,782
(3)
(516)
2,263
2023
$M
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
2023
carrying
value
Borrowings
274
258
270
741
1,543
(2)
(305)
1,236
Lease liabilities
3
6
6
22
37
–
(10)
27
Payables, accruals, provisions
and option premiums
328
11
19
–
358
–
(3)
355
Treasury hedges
19
–
5
2
26
–
1
27
Energy hedges
55
44
71
–
170
–
(11)
159
679
319
371
765
2,134
(2)
(328)
1,804
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
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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
main sub-types of market risk that we
are exposed to are discussed below.
Commodity price 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.
Foreign exchange risk
Meridian is exposed to foreign exchange
risk arising from sales and procurement
of goods and services denominated
in foreign currencies and also from
borrowings 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 borrowings raised in US Dollars,
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.
Interest rate risk
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.
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 Climate-
related Disclosure.
Climate-related Disclosures
bit.ly/3SzilVK
As part of preparing this report,
Meridian considers climate-related risk
and whether it may have any impact on
our financial statements and associated
disclosures. The most material area
we see climate risk potentially having
a future impact is on our valuation
of generation structures, which we
account for at fair value. Refer to Note B1
of the financial report for further detail
on this asset class, including a sensitivity
analysis indicating how much their
value may change with variations in key
inputs, such as generation volumes and
wholesale market prices.
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
154
D1 Financial risk management continued
Meridian groups its financial instrument into two categories –
Treasury hedges and Energy hedges.
Fair value on the balance sheet
2024
2023
$M
Assets
Liabilities
Assets
Liabilities
Treasury hedges
77
(28)
85
(27)
Energy hedges
380
(200)
187
(159)
Total financial instruments
457
(228)
272
(186)
of which:
Current
233
(86)
86
(75)
Non-current
224
(142)
186
(111)
Total financial instruments
457
(228)
272
(186)
Further disclosure and analysis of these two categories are noted on the following pages.
Benmore Power Station, Waitaki Valley.
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
155
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).
Fair value on the balance sheet
Fair value
movements
in the income
statement
Outstanding
aggregate
notional
principals25
2024
$M
2023
$M
2024
$M
2023
$M
2024
$M
2023
$M
TREASURY HEDGES
Level
Assets Liabilities Assets Liabilities
CCIRS
Interest Rate Risk26
(39)
(13)
(34)
(15)
–
1
Basis and Margin Risk27
–
(1)
–
–
–
–
Foreign Exchange Risk28
71
–
66
–
–
2
32
(14)
32
(15)
–
1 586 586
IRS29
2
44
(14)
46
(12)
(4)
23 1,475 1,365
FX30
2
1
–
7
–
–
–
38
152
Treasury hedges
77
(28)
85
(27)
(4)
24
Meridian uses CCIRS to hedge risks involved with borrowings issued in USD. In the
above table the CCIRS are separated into component parts as follows:
25 These cover multiple legs including offsetting legs and maturities out to 2034.
26 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.
27 Basis and margin risk: this is the movement in the value of the CCIRS due to changes in basis (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.
28 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.
29 Changes in fair value of IRS are recognised in the Income Statement within ‘Net change in fair value
of treasury instruments’.
30 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.
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.
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.
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
P&L sensitivity is nil and is not shown in the below table.
The majority of the FX portfolio are designated in cash flow hedge relation-ships.
Changes in spot exchanges rates are fully offset by opposite impacts from hedge
accounting entries in the P&L, for these contracts the P&L sensitivity is nil.
Impact on after tax
profit & equity
Sensitivity
2024
$M
2023
$M
Interest rates
New Zealand benchmark bill rate
-100 basis points (bps)
(9)
(24)
+100 bps
8
21
Foreign exchange rates
Effect of movement in foreign exchange
rates on foreign exchange contracts
-20%
–
(1)
+20%
–
1
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
156
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.
These hedges are generally longer-term, larger volume contracts that manage specific
risks that can not be managed through 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 “Market traded electricity hedges” category contains instruments that are
traded on various exchange-based markets.
The “Other electricity hedges” category contains over-the-counter (OTC) derivatives
with other energy market participants. These hedges are generally contracts for
difference (CFDs).
The “Electricity options” category contains OTC derviatives that Meridian trades with
other energy market participants. These are used to support the management of
inflow and storage variability in the catchments where Meridian generates electricity.
The “NZAS” category contain two instruments, the 20-year CFD through which
Meridian provides NZAS with a fixed price for part of its energy consumption, and
an embedded derivative value in respect of the NZAS DRA, where the embedded
derivative measures the expected forward impact of inflationary changes on the DRA.
Fair value on the balance sheet
Fair value
movements in the
income statement
Outstanding aggregate
notional volumes31
2024
$M
2023
$M
2024
$M
2023
$M
2024
2023
ENERGY HEDGES
Level
Assets
Liabilities
Assets
Liabilities
Market traded electricity hedges
1
79
(15)
51
(52)
53
(230) 19,459 GWh 20,383 GWh
Other electricity hedges
3
152
(111)
102
(107)
154
(121) 6,046 GWh
9,532 GWh
Electricity options
3
93
–
34
–
65
(24)
952 GWh
1,345 GWh
NZAS
3
56
(74)
–
–
(19)
– 68,180 GWh
0 GWh
Energy hedges
380
(200)
187
(159)
253
(375)
31 These cover multiple legs including offsetting legs and maturities out to 2028.
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
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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 valuation of Energy Hedges and therefore
on Meridian’s after tax profit and equity.
Impact on after tax
profit & equity
ENERGY HEDGES
Sensitivity
2024
$M
2023
$M
Energy prices
-10%
147
(74)
+10%
(147)
74
Discount rates
-100 bps
(1)
–
+100 bps
1
–
Call volumes
-10%
(6)
(2)
+10%
7
3
Consumer Price Inflation (CPI)
-1%
(63)
–
+1%
67
–
NZAS CPI probability factor
-5%
(12)
–
+5%
12
–
Analysis of fair value movements on energy hedges
The following table provides an analysis of fair value movement on energy hedges. In A1 Segments, realised movements on energy hedges are presented within Energy Margin.
2024
2023
$M
Market
traded
electricity
hedges
Other
electricity
hedges
Electricity
options
NZAS
Total
Market
traded
electricity
hedges
Other
electricity
hedges
Electricity
options
NZAS
Total
Realised movement in energy hedges
2
135
14
–
151
(22)
(21)
1
–
(42)
Unrealised movement in energy hedges
51
19
51
(19)
102
(208)
(100)
(25)
–
(333)
Total fair value movements on energy hedges
53
154
65
(19)
253
(230)
(121)
(24)
–
(375)
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
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The table below describes any additional key inputs and techniques used in the valuation of Level 3 energy hedges.
Financial asset
or liability
Description of input
Range of significant
unobservable inputs
Relationship of input to fair value
Other electricity
hedges and
NZAS valued
using DCFs
Where quoted prices are not available or not relevant
(i.e. for long-dated, discounted contracts), Meridian’s best
estimate of long-term forward wholesale electricity price is
used. This is based on a fundamental analysis of expected
demand and the cost of new supply and any other relevant
wholesale market factors. It takes into account any fixed
discount applicable at inception. The initial fair value of the
NZAS contract was assessed at nil at inception.
$56/MWh to $77/MWh
(in nominal terms),
excludes observable ASX
prices (2023: $29/MWh
to $55MWh)
An increase in the forward wholesale electricity
price increases the fair value of buy hedges and
decreases the fair value of sell hedges.
A decrease in the forward wholesale electricity
price has the opposite effect.
NZAS
The NZAS CFD and DRA contain price adjustments for
inflation, subject to movements in average annual aluminium
price. Actual and forecast Consumer price inflation (CPI),
as published by New Zealand Treasury, is used as an input.
This is adjusted for the probability of CPI increases applying
to the contracts. Meridian assesses probability of CPI
increases by historic analysis of aluminium prices.
CPI: 0%–2%,
Probability 54%
(2023: not applicable)
For the CFD, as CPI rises, its value increases.
A decrease in CPI has the opposite effect.
For the DRA embedded derivative, as CPI rises,
the value decreases. A decrease in CPI has the
opposite effect.
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 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 as
a consequence of initial
recognition differences;
• NZAS continues to operate
until 31 December 2044; and
• contracts run their full term.
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
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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
2024
2023
RECONCILIATION OF LEVEL 3 FAIR VALUE MOVEMENTS
$M
Other
electricity
hedges
Electricity
options
NZAS
Total
Other
electricity
hedges
Electricity
options
NZAS
Total
Net change in fair value of energy hedges:
Unrealised movements
19
51
(19)
51
(100)
(25)
(125)
Realised movements
135
14
–
149
(21)
1
(20)
Total fair value movement in the Income Statement on energy hedges
154
65
(19)
200
(121)
(24)
–
(145)
Balance at the beginning of the period
(5)
34
–
29
110
39
–
149
Fair value movements in the Income Statement
154
65
(19)
200
(121)
(24)
–
(145)
Remeasurement
(108)
(13)
–
(121)
6
(1)
–
5
Disposals and derecognition
–
(3)
–
(3)
–
–
–
–
New hedge recognised
–
10
–
10
–
20
–
20
Balance at the end of the year
41
93
(19)
115
(5)
34
–
29
Fair value movements of Level 3 energy hedges in 2024 which are held at balance date total $45 million (30 June 2023: ($107) million).
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
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D1 Financial risk management continued
Hedge accounting
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 start of the Risk Management
section for a description of the key risks
Meridian manages.
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.
This means:
• 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.
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 borrowing decrease the carrying
value of the borrowing by $53 million
(2023: decrease by $50 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.
This means:
• 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
Borrowings and CCIRS are included
within Financial Instruments.
Foreign exchange risk
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
cashflows. 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 the 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
2024
$M
2023
$M
Hedge ineffectiveness
gain (loss)
–
1
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.
FINANCIAL INSTRUMENTS USED TO MANAGE RISK
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
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D1 Financial risk management continued
Future cash flows
The below table 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.
2024
$M
2023
$M
CURRENCY AS INDICATED BELOW
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
USD Borrowings (shown in USD)
(16)
(16)
(260)
(194)
(16)
(16)
(140)
(330)
CCIRS
USD leg (coupons and maturity flow – shown in USD)
16
16
260
194
16
16
140
330
Functional currency leg (coupons and maturity flow – shown in NZD)
(42)
(37)
(406)
(298)
(42)
(41)
(236)
(503)
Foreign Exchange Contracts
Foreign currency leg (shown in NZD)
37
–
–
–
134
24
–
–
NZD leg
(36)
–
–
–
(128)
(24)
–
–
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.
2024
$M
2023
$M
Gross value
Value offset
Carrying value
Gross value
Value offset
Carrying value
Financial instrument assets
Energy hedges
608
(228)
380
352
(165)
187
Treasury hedges
77
–
77
85
–
85
Total financial instrument assets
685
(228)
457
437
(165)
272
Financial instrument liabilities
Energy hedges
(428)
228
(200)
(324)
165
(159)
Treasury hedges
(28)
–
(28)
(27)
–
(27)
Total financial instrument liabilities
(456)
228
(228)
(351)
165
(186)
Net financial instruments
229
–
229
86
–
86
GROUP STRUCTURE
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
162
E Group structure
IN THIS SECTION
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
and other interests.
E1 Subsidiaries
and other interests
The consolidated financial statements
include the financial statements of
Meridian Energy Limited, subsidiaries
and other interests listed on the
following table.
Subsidiaries 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 in order to ensure they
meet their obligations as they fall due.
Interest held
by the Group
Name of entity
Principal activity
Functional currency
2024
2023
Meridian Energy Limited32
Flux Federation Limited33
Software development
New Zealand dollar
100%
100%
Flux-UK Limited33
License holder
British pound
100%
100%
Dam Safety Intelligence Limited33
Professional services
New Zealand dollar
100%
100%
Meridian Energy Captive Insurance Limited33
Insurance
New Zealand dollar
100%
100%
Meridian Limited33
Non-trading entity
New Zealand dollar
100%
100%
Meridian Energy International Limited33
Non-trading entity
New Zealand dollar
100%
100%
Powershop New Zealand Limited33
Non-trading entity
New Zealand dollar
100%
100%
Kōkako SPV Limited33
Non-trading entity
New Zealand dollar
100%
0%
Te Rere Hau Holdings Limited34
Non-trading entity
New Zealand dollar
50%
0%
Te Rere Hau Limited34
Non-trading entity
New Zealand dollar
50%
0%
Te Rere Hau Holdings (2023) Limited Partnership (LP)34 Non-trading entity
New Zealand dollar
50%
0%
Te Rere Hau Project LP34
Development entity
New Zealand dollar
50%
0%
Te Arawaru o Te Waitaki Tapui Limited34
Non-trading entity
New Zealand dollar
20%
0%
Meridian and NZ Windfarms Limited
(NZWF) have agreed to form a 50-50
joint venture to repower and extend the
Te Rere Hau Wind Farm. Meridian has
incorporated the new company “Kōkako
SPV Limited” to manage its ownership
in the joint venture.
During the period Meridian purchased
a 19.9% shareholding in NZWF at a cost
of $11 million. This investment was initially
recorded as an investment in associate
as significant influence existed and
the equity method of accounting was
applied. This is classified as an other
non-current asset on the Balance Sheet.
On 19 June 2024, Meridian surrendered
it’s representation on the Board of
NZWF. Without representation, Meridian
is deemed to no longer hold significant
influence and ceased equity accounting
for its 19.9% shareholding in NZWF and
measures the asset at fair value through
profit or loss.
32 Member of the guaranteeing
group as at 30 June 2024.
33 Subsidiary.
34 Other interest.
F Other
IN THIS SECTION
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 (LTI)
The Chief Executive, Executive Team
and selected tier three leaders have the
opportunity to participate in the LTI plan.
A 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 plan is not otherwise available to
Meridian employees.
Meridian has a policy that ensures
participants in the LTI plan are not able
to enter transactions (whether through
the use of derivatives or otherwise)
that limit the economic risk of their
participating in the plan.
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 three 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.
LTI plan
Under Meridian’s LTI plan, the company
issues rights to acquire ordinary shares in
the company (Performance Share Rights)
to eligible participants who accept the
offer to participate in the LTI plan. Each
Performance 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 Performance Share
Rights that vest is dependent on:
• Meridian’s TSR over a three-year
performance period (Performance
Period) relative to Meridian’s cost
of equity;
• Meridian’s TSR 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).
OTHER
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
163
F1 Share-based payments continued
Performance hurdles
As at 30 June 2024, there were three
LTI plan cycles underway. These plans
have Performance Periods which end
as follows:
• FY22 Plan: 30 June 2024;
• FY23 Plan: 30 June 2025; and
• FY24 Plan: 30 June 2026.
The three plans above all have slightly
different Performance Hurdles, as the
market has evolved over this period.
The following applies to the FY22 Plan
the Performance Period for which ends
30 June 2024:
• The Peer Group against which relative
TSR performance was measured for
the FY22 Plan comprised AGL Energy,
Origin Energy, Contact Energy,
Mercury NZ, and Genesis Energy.
• The vesting period for the FY22 LTI
scheme ends on 31 October 2024.
Performance Share Rights lapse if
the holder ceases to be employed by
Meridian during the vesting period,
subject to the Board’s discretion.
Performance 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. Performance
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 2024, the level of TSR met
will result in 100% of Performance Share
Rights vesting (2023: 0%). Performance
Share Rights totalling 418,360 will be
transferred to the eligible participants
for that LTI after balance date (2023: nil)
During the period, 866,246 Performance
Share Rights were issued to eligible staff,
433,123 being ABS Rights and 433,123
being REL Rights.
The fair value of the ABS Rights at grant
date of $1.76 (2023: $2.66) 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 $2.79 (2023:
$3.22) 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 recognsied as
an expense over the relevant three year
service period.
OTHER
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
164
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
Granted
during
the year
Vested
during
the year
Forfeited
during
the year
Balance at
the end of
the year
2024
24/10/23
25/10/26
ABS
$1.76
–
433,123
–
–
433,123
24/10/23
25/10/26
REL
$2.79
–
433,123
–
–
433,123
27/10/22
3/10/25
ABS
$2.66
470,887
–
–
–
470,887
27/10/22
3/10/25
REL
$3.22
470,887
–
–
–
470,887
21/10/21
21/10/24
ABS
$2.14
209,180
–
–
–
209,180
21/10/21
21/10/24
REL
$2.93
209,180
–
–
–
209,180
Total
1,360,134
866,246
–
–
2,226,380
2023
27/10/22
3/10/25
ABS
$2.66
–
470,887
–
–
470,887
27/10/22
3/10/25
REL
$3.22
–
470,887
–
–
470,887
21/10/21
21/10/24
ABS
$2.14
209,180
–
–
–
209,180
21/10/21
21/10/24
REL
$2.93
209,180
–
–
–
209,180
9/03/21
30/06/23
ABS
$3.53
212,421
–
–
(212,421)
–
9/03/21
30/06/23
REL
$3.75
212,421
–
–
(212,421)
–
7/10/2019 & 28/2/20
7/10/22
ABS
$3.54
–
–
–
–
–
7/10/2019 & 28/2/20
7/10/22
REL
$3.36
204,834
–
(204,834)
–
–
Total
1,048,036
941,774
(204,834)
(424,842)
1,360,134
OTHER
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
165
F2 Related parties
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.
Directors of the Group may be directors or officers of other companies or
organisations with which members of the Group may transact.
Compensation of key management personnel
The remuneration of directors and other members of key management
during the year was as follows:
2024
$M
2023
$M
Directors’ fees
1
1
CEO, senior management team and subsidiary chief executives
Salaries and short-term benefits
9
8
Post-employment benefits
–
–
Redundancy benefits
–
–
Long-term benefits
–
1
9
9
F3 Auditor’s remuneration
Auditor’s remuneration to Deloitte Limited for:
2024
$M
2023
$M
Audit and review of New Zealand-based
companies’ financial statements
0.7
0.7
Total audit fees
0.7
0.7
Other assurance fees
0.2
0.2
Other fees
0.1
–
Total auditor remuneration
1.0
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 a requirement
of 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 $37,932 (2023: $37,750).
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, agreed upon
procedures for insurance purposes,
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 $69,200 for climate related
disclosure gap analysis, $11,000 for
cyber security services and $14,000
(2023: $14,000) 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.
OTHER
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
MENU
166
F4 Contingent assets
and liabilities
There were no contingent assets or
liabilities at 30 June 2024 (2023: Nil).
F5 Subsequent events
There are no subsequent events other
than dividends declared on 27 August
2024 (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.
NZ IFRS 18 Presentation and Disclosure in
Financial statements was issued in May
2024 (effective from 1 January 2027).
This Standard sets out requirements
for the presentation and disclosure of
information in financial statements
to help ensure they provide relevant
information that faithfully represents an
entity’s assets, liabilities, equity, income
and expenses. Meridian has not yet
completed its assessment on the
impact of this standard.
OTHER
NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2024
MERIDIAN INTEGRATED REPORT 2024
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167
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF MERIDIAN ENERGY LIMITED
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 117 to 167, that comprise the
consolidated balance sheet as at 30 June
2024, the consolidated income statement,
consolidated comprehensive income
statement, consolidated statement of
changes in equity and consolidated
statement of cash flows for the year then
ended, and the notes to the consolidated
financial statements including material
accounting policy 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
2024, and its consolidated financial
performance and its consolidated
cash flows for the year then ended
in accordance with New Zealand
equivalents to IFRS Accounting
Standards (“NZ IFRS”) as issued by
the External Reporting Board and
IFRS Accounting Standards (“IFRS”) as
issued by the International Accounting
Standards Board.
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 and we have
fulfilled our other ethical responsibilities
in accordance with these requirements.
We believe that the audit evidence we
have obtained is sufficient and appropriate
to provide a basis for our opinion.
In addition to the audit, our firm has
carried 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,
and supervisor reporting. We also carried
out non-assurance assignments for the
Group relating to cyber security services,
a gap analysis in regards to climate
related disclosures readiness programme,
and the Corporate Taxpayers Group
of which Meridian Energy Limited is a
member, 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 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 $24.5 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.
INDEPENDENT AUDITOR’S REPORT
MERIDIAN INTEGRATED REPORT 2024
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168
Key audit matters
How our audit addressed the 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 date.
The net book value of generation structures and plant as reflected in Note B1 is
$11,609 million (2023: $8,334 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 2024. The revaluation resulted in an increase in value by $3,152
million (2023: increase of $1,111 million) through other comprehensive income and the
revaluation reserve. 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 (including consideration
of the impact of the New Zealand Aluminium Smelter (’NZAS’) remaining in
operation and the NZAS contract pricing on the wholesale 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 New Zealand
Aluminium Smelter (’NZAS’) remaining in operation on the valuation.
We include valuation of generation structures as a key audit matter because of the
financial significance of the generation plant to the financial statements and the
inherent technical and judgemental complexity associated with determining the
fair value.
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 NZ wholesale electricity price path
(including the consideration of any impacts of NZAS remaining in operation
and its contract pricing);
•
The reasonableness of the future forecasted generation volumes; and
•
The reasonableness of the applied WACC rate.
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 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 determined
by the Group, including the WACC rate and forward price path;
•
Assessing the reasonableness of the forecasted future expenses (including
any allowance for consenting costs, climate change and the impacts of NZAS
remaining in operation);
•
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 2024. Fair value
measurements are grouped into three categories based on their inputs into the valuation,
with level 3 derivatives being the most complex valuations, given that they use significant
inputs that do not use directly observable market data.
At 30 June 2024, level 3 electricity derivative assets totalled $301 million (2023: $136
million) and level 3 electricity derivative liabilities were $185 million (2023: $107 million).
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 NZAS
remaining in operation);
•
The reasonableness of the initial recognition and valuation of the NZAS Contract, and
the associated embedded derivative value in the Demand Response Agreement;
•
The reasonableness of the future forecasted generation volumes; and
•
The reasonableness of the applied discount rate.
INDEPENDENT AUDITOR’S REPORT
MERIDIAN INTEGRATED REPORT 2024
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Key audit matters
How our audit addressed the key audit matters
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 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
compared with the prior year where appropriate;
•
Challenging the key assumptions applied, including the long-term forward
wholesale electricity price, long-term expected call volumes, fair value of the
transaction prices 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.
Other information
The Directors are responsible on
behalf of the Group for the other
information. The other information
comprises the information in the
Integrated Report and the Climate
Statement, 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
The Directors are responsible on behalf
of the Group for the preparation and fair
presentation of the consolidated financial
statements in accordance with NZ IFRS
and IFRS, 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.
Auditor’s responsibilities for
the audit of the consolidated
financial statements
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 t
hat 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.
INDEPENDENT ASSURANCE REPORT
MERIDIAN INTEGRATED REPORT 2024
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170
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 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
27 AUGUST 2024
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INDEPENDENT ASSURANCE REPORT TO THE DIRECTORS OF MERIDIAN ENERGY LIMITED
REPORT ON SUSTAINABILITY DISCLOSURES
The Integrated Report of Meridian
Energy Limited and its subsidiaries
(‘Meridian’ or the ‘Group’) for the year
ended 30 June 2024 (the ‘Integrated
Report’) includes the Global Reporting
Initiatives disclosures (‘GRI disclosures’)
within the GRI Standards content
index (the ‘GRI index’) on pages 174 to
177 prepared in accordance with the
Global Reporting Initiative Sustainability
Reporting Standards and with reference
to Global Reporting Initiative G4 Sector
Disclosures Electric Utilities (collectively
known as the ‘GRI Standards’).
Additionally, the Group have identified
sustainability indicators that are not
covered in the GRI topic standards
(referred to as ‘Own Measures’) within
the GRI index and were prepared using
the methodology listed in the FY24
Data Pack on tab ‘methods’ that was
internally developed by the Group
(‘additional criteria’).
The subject of our limited assurance
engagement are the Group’s GRI
disclosures and Own Measures
referenced in the GRI index (collectively
the ‘sustainability disclosures’) and
presented within either the Integrated
Report or the FY24 Data Pack for the year
ended 30 June 2024 that accompanies
the Integrated Report (the ‘IR data pack’),
prepared in accordance with the GRI
Standards and additional criteria.
Our report does not cover any forward-
looking statements made by the Group,
hyperlinked documents (other than to the
IR data pack) and Meridian’s Own Measures
for actions to improve information security
and support for customers' climate actions.
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;
nothing has come to our attention that
causes us to believe that the Group’s
sustainability disclosures referenced
within the GRI index on pages 174 to 177
of the Integrated Report, have not been
prepared, in all material respects, in
accordance with the GRI Standards
and additional criteria.
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.
Directors’ Responsibility
The Directors are responsible for:
• determining the basis of preparation
for the Own Measures included within
the GRI index;
• ensuring that the sustainability
disclosures listed in the GRI index are
prepared in accordance with the GRI
Standards and the additional criteria;
• determining the Group’s objectives
in respect of sustainability reporting;
• selecting the material topics and
determining whether the disclosures
are presented in the Integrated
Report or in the IR data pack;
• establishing and maintaining
appropriate performance
management and internal control
systems in order to derive the
sustainability disclosures listed
in the GRI index; and
• ensuring the completeness, accuracy
and availability of the sustainability
disclosures within the Integrated
Report and IR data pack.
Our Independence
and Quality Management
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.
Our firm is the statutory auditor of the
financial statements on behalf of the
Auditor-General. In addition to our
role as the statutory auditor and this
engagement, our firm also does other
engagements including: greenhouse
gas inventory assurance, 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, and supervisor reporting. We also
carried out non-assurance assignments
for the Group relating to cyber security
services, gap analysis in regards to climate
related disclosures readiness programme,
and to the Corporate Taxpayers Group
of which Meridian Energy Limited is a
member, which are compatible with those
independence requirements. In addition
to this, partners and employees of our
firm deal with the Group on normal terms
within the ordinary course of trading
activities of the business of the Group.
Our firm has no other 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,
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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.
Our 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 Group’s sustainability
disclosures listed within the GRI index
have not been prepared, in all material
respects, in accordance with the GRI
Standards and additional criteria.
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
or additional criteria 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;
• Obtaining an understanding of the
materiality process applied by the
Group to determine the material
topics chosen for inclusion in the
Integrated Report and the IR data
pack respectively;
• Analytical review and other test
checks of the information presented;
• Checking whether the appropriate
indicators have been reported in
accordance with the GRI Standards or
additional criteria; and
• Evaluating whether the information
presented is consistent with our overall
knowledge and experience of Group’s
sustainability reporting processes.
We did not evaluate the security and
controls over the electronic publication of
the Integrated Report and IR data pack.
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 the Group’s sustainability
disclosures referenced in the GRI index
have been prepared, in all material
respects, in accordance with the GRI
Standards or additional criteria.
Inherent Limitations
Because of the inherent limitations
of a 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 or additional criteria
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 or additional
criteria 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 law, 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.
Christchurch, New Zealand
27 AUGUST 2024
This limited assurance report relates to the sustainability disclosures of Meridian Energy Limited and its subsidiaries
(‘Meridian’ or the ‘Group’) , referenced within the GRI Standards content index on pages 174 to 177 (the ‘GRI index’)
of the Group’s Integrated Report for the year ended 30 June 2024 (‘the Integrated Report’), and presented on
the specified pages (as referenced in the GRI index) of the Integrated Report or the FY24 Meridian Integrated
Report ESG data pack (‘the IR data pack’) (collectively the ‘sustainability disclosures’). Meridian’s Board is responsible
for the maintenance and integrity of the Group’s website. Deloitte Limited have not been engaged to report on
the integrity of the Group’s website. We accept no responsibility for any changes that may have occurred to the
Integrated Report or IR data pack since they were initially presented on the website.
The limited assurance report refers only to the Integrated Report and IR data pack accompanying 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 or the IR data pack. 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,
IR data pack accompanying the Integrated report and related limited assurance report dated 27 August 2024 to
confirm the information included in the Integrated Report and the IR data pack presented on this website.
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GRI Standards content index
Meridian Energy Limited has reported in accordance with the GRI Standards for the period 1 July 2023 to 30 June 2024. GRI 1: Foundation 2021 has been used.
References are to FY24 Integrated Report (AR), FY24 Data Pack – tab (DP – tab reference), Climate Related Disclosure FY24 (CRD), Climate Action Plan FY24
(CAP), Modern Slavery Statement FY24 (MSS), Corporate Governance Statement FY24 (CGS), Board Charter (approved date April 2024) (BC); Code of Conduct
2024 (COC); Supplier Code of Conduct (SCOC) (dated January 2024), Greenhouse Gas Inventory FY24, Good Energy Programme Guidance (July 2024);
Modern Slavery Guidance (December 2023), Whistle Blowing Policy (approved date August 2023), Constitution of Meridian Energy Limited (2019 update)
(Constitution).
Own measures – some disclosures are additional or alternatives to those covered in the GRI Standards and have been self-determined by management.
See DP – Methods tab for the disclosure criteria for Own Measures. We have additional ESG disclosures reported in the Integrated Report Data Pack which
are not included in our GRI content index – refer to DP – Other ESG Information tab.
General disclosures
Reference
Comments
GRI 2: General Disclosures 2021
2-1
Organisational details
AR Front cover,
p.122, 178
2-2
Entities included in the organisation’s
sustainability reporting
AR p.4
2-3
Reporting period, frequency
and contact point
AR p.4, 178
2-4
Restatements of information
Discussed where
relevant throughout the
report and data pack.
2-5
External assurance
AR p.4–5,
168–173
2-6
Activities, value chain and
other business relationships
AR p.67, 70;
MSS p.3
2-7
Employees
DP – Our People
2-8
Workers who are not employees
DP – Our People
2-9
Governance structure
and composition
AR p. 68, 71,
78–79, 99; CGS
Recommendation
2.5; BC p.3–5;
S&S Committee
Charter p.1
General disclosures
Reference
Comments
2-10
Nomination and selection of
the highest governance body
AR p.71;
Constitution
p.13–15; BC
p.2 and CGS
Recommendation
2.2 & 3.4
2-11
Chair of the highest
governance body
AR p.6; CGS
Recommendation
2.9
2-12
Role of the highest governance
body in overseeing the
management of impacts
AR. p.72
Further information
available on our
material impacts
page on our website.
2-13
Delegation of responsibility for
managing impacts
AR p.72, 87–88
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
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General disclosures
Reference
Comments
2-14
Role of the highest governance
body in sustainability reporting
AR p.72
2-15
Conflicts of interest
AR. p.71; BC p.6;
CGS Additional
Disclosures table
2-16
Communication of critical concerns
DP –
Communities
2-17
Collective knowledge of the highest
governance body
AR p.71; BC p.5
2-18
Evaluation of the performance
of the highest governance body
AR p.96; CGS
Principle 2.7 & 5.1;
BC p.5
2-19
Remuneration policies
AR p.84–86
2-20
Process to determine remuneration
AR p.82–85
2-21
Annual total compensation ratio
AR p.94
2-22
Statement on sustainable
development strategy
AR p.7–13
2-23
Policy commitments
AR p.62–65;
COC p.9-10, 23;
SCOC p.1–2;
MSS p.2;
CAP p.10
We use a range
of methods to
communicate our
Group commitments
and policies to
Meridian, and our
supply chain and
stakeholders. This
includes through
Meridian's COC and
SCOC expectations, as
well as via guidance
documents, such as
our Good Energy
Programme Guidance
(p.1–2).
2-24
Embedding policy commitments
AR p.62–63;
SCOC;
MSS p.2, 7–8
2-25
Processes to remediate
negative impacts
AR p.63, 71;
CGS Principle 1.1;
MSS – Grievance
and remediation
section p.7.
General disclosures
Reference
Comments
2-26
Mechanisms for seeking
advice and raising concerns
AR p.178; COC p.4;
Whistle Blowing
Policy p.1–2
2-27
Compliance with laws
and regulations
There have been no
significant instances of
non-compliance with
laws and regulations
and we’ve paid no fines
during the reporting
period.
2-28
Membership associations
DP – Renewable
Energy
2-29
Approach to stakeholder
engagement
AR p.72–73
See throughout report
where relevant. We
take a purpose driven
approach.
2-30
Collective bargaining agreements
No staff are covered by
collective bargaining
agreeements.
Material topics and associated disclosures
Reference
Comments
GRI 3: Material Topics 2021
3-1
Process to determine material topics
AR p.72–73
3-2
List of material topics
AR p.74–80
Affordability
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.77–78
Own Measures
Disconnections
DP – Customers
Business emissions and waste
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.79
GRI 302: Energy 2016
302-1
Energy consumption within the
organisation
DP – Climate
and Environment
302-4
Reduction of energy consumption
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Material topics and associated disclosures
Reference
Comments
GRI 305: Emissions 2016
305-1
Direct (Scope 1) GHG emissions
AR 63–64; DP
– Climate and
Environment
See also Meridian
Greenhouse Gas
Inventory FY24.
305-2
Energy indirect (Scope 2)
GHG emissions
305-3
Other indirect (Scope 3)
GHG emissions
305-4
GHG emissions intensity
305-5
Reduction of GHG emissions
GRI 306: Waste 2020
306-2
Management of significant
waste-related impacts
AR p.79; DP -
Climate and
Environment
306-3
Waste generated
DP – Climate
and Environment
306-4
Waste diverted from disposal
306-5
Waste directed to disposal
Own Measures
Operational emissions
reduction target
AR p.62–63;
CAP p.7 footnote
number 2
Meridian Energy’s
Target Validation
Report is submitted
to SBTi in July 2022.
The submission of
the targets have
been submitted
and registered on
the website and this
can be accessed in
sciencebasedtargets.
org/companies-taking-
action#dashboard.
Climate-related impacts
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.77
GRI 201: Economic Performance 2016
201-2
Financial implications and other
risks and opportunities due to
climate change
AR p.16; DP –
Climate and
Environment
See also CRD pp.17–28,
39–40.
Material topics and associated disclosures
Reference
Comments
Customer decarbonisation
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.76
Own Measures
Support for customers’
climate actions*
AR p.10, 36;
CAP p.5–6
Cyber security
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.77–78
Own Measures
Actions to improve
information security*
AR p.48–49
Ngā whakaaweawe o Te Ao Tūroa – impacts on the natural world
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.75–76
GRI 303: Water and Effluents 2018
303-1
Interactions with water
as a shared resource
AR p.27, 75–76
303-3
Water withdrawal
DP – Climate
and Environment
303-4
Water discharge
303-5
Water consumption
GRI 304: Biodiversity 2016
304-2
Significant impacts of activities,
products and services on biodiversity
AR p.75–76
People
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.78–79
GRI 401: Employment 2016
401-1
New employee hires
and employee turnover
DP – Our People
401-3
Parental leave
* Not within scope of assurance
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Material topics and associated disclosures
Reference
Comments
GRI 403: Occupational Health and Safety 2018
403-1
Occupational health and
safety management system
AR p.58–59;
DP – Our People
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. Contractors
are covered but do
not have access to the
OSH management
system. Flux permanent
employees and
contractors are fully
covered by Flux’s
health and safety
management system.
403-2
Hazard identification, risk assessment,
and incident investigation
403-3
Occupational health services
403-4
Worker participation, consultation,
and communication on occupational
health and safety
403-5
Worker training on occupational
health and safety
403-6
Promotion of worker health
403-7
Prevention and mitigation of
occupational health and safety
impacts directly linked by business
relationships
403-8
Workers covered by an
occupational health and
safety management system
403-9
Work-related injuries
GRI 404: Training and Education 2016
404-1
Average hours of training per year
per employee
DP – Our People
404-3
Percentage of employees receiving
regular performance and career
development reviews
All Meridian employees
take part in the
performance appraisal
process, which
contributes to incentive
and pay outcomes.
GRI 405: Diversity and Equal Opportunity 2016
405-1
Diversity of governance bodies
and employees
AR p.57, 71;
DP – Our People
405-2
Ratio of basic salary and
remuneration of women to men
Material topics and associated disclosures
Reference
Comments
GRI 406: Non-discrimination 2016
406-1
Incidents of discrimination
and corrective actions taken
There was one incident
of harassment during
the reporting period.
The incident is no longer
subject to action.
Renewable energy generation
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.74
G4 Sector Disclosures – Electric Utilities
EU1
Installed capacity
AR p.25; DP
– Renewable
Genereration
EU2
Net energy output
EU10
Planned capacity against demand
AR p.23,
CAP p.3
Pipeline projections
are estimations subject
to internal funding
approval and final
design (which includes
resource consent
conditions).
EU30
Plant availability factor
DP – Renewable
Genereration
Supporting communities
GRI 3: Material Topics 2021
3-3
Management of material topics
AR p.79–80
GRI 204: Procurement Practices 2016
204-1
Proportion of spending
on local suppliers
DP –
Communities
GRI 413: Local Communities 2016
413-1
Operations with local community
engagement, impact assessments,
and development programs
AR p.8–9,
27, 39; DP –
Communities
GRI 414: Supplier Social Assessment 2016
414-1
New suppliers that were screened
using social criteria
DP – Supply
Chain
See also Modern
Slavery Guidance
p.1–3; and Good
Energy Programme
Guidance p.1–2.
414-2
Negative social impacts in the
supply chain and actions taken
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Directory
Directors
Mark Verbiest, Chair
Mark Cairns
David Carter
Graham Cockroft
Michelle Henderson
Julia Hoare
Nagaja Sanatkumar
Tania Simpson
Executive Team
Neal Barclay,
Chief Executive
Chris Ewers,
General Manager Wholesale
Lisa Hannifin,
Chief Customer Officer
Tania Palmer,
General Manager Generation
Bharat Ratanpal,
Acting Flux Chief Executive
Mike Roan,
Chief Financial Officer
Claire Shaw,
General Manager Corporate
Affairs and Sustainability
Jason Stein,
Chief People Officer
Guy Waipara,
General Manager Development
Jason Woolley,
General Counsel and Company
Secretary
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Auditors
Deloitte Limited
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Statements on behalf of the
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New Zealand
Get in touch
Customer enquiries
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hello@meridianenergy.co.nz
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Owen Hackston
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Sustainability enquiries
sustainability@meridianenergy.co.nz
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