Meridian Energy's November 2025 report reveals record-high hydro inflows and storage, alongside increased electricity demand and retail sales across all segments, signaling robust operational momentum.
- National hydro storage at 153% of historical average by early December
- November inflows 149% of historical average, highest since 1988/89
- Electricity demand up 5.9% year-on-year in November
- Retail sales volumes increased 12.1%, with residential up 23.2%
- Generation volumes 2.7% higher than last year, with 12.7% growth year-to-date
Record Hydro Storage and Inflows
Meridian Energy’s latest monthly operating report for November 2025 highlights an exceptional hydrological environment underpinning its generation capacity. National hydro storage climbed from 143% to 153% of the historical average by early December, with the South Island reaching 157% and the North Island 132%. These figures are bolstered by November’s total inflows at 149% of the historical average, marking the highest financial year-to-date inflows since 1988/89. Notably, the Waitaki catchment water storage surged to 172% of average, while the Waiau catchment inflows were 158% of average, reflecting abundant water resources.
Weather and Demand Dynamics
November 2025 was the warmest on record across New Zealand, with above-average temperatures nationwide. Rainfall patterns were uneven, with the North Island and western South Island experiencing above-average precipitation, contrasting with drier conditions in the eastern South Island. This weather mix contributed to a 5.9% increase in national electricity demand compared to November 2024. The New Zealand Aluminium Smelters (NZAS) also ramped up its average load to 569MW, up from 451MW a year earlier, reflecting stronger industrial activity and Meridian’s reduced reliance on demand response options.
Retail Growth Across All Segments
Meridian’s retail operations showed robust growth, with sales volumes rising 12.1% year-on-year in November. Residential sales led the charge with a 23.2% increase, including customers acquired through Flick. Small and medium businesses grew by 10.2%, large businesses by 8.5%, agriculture by 18.4%, and corporate sales by 6.0%. The agricultural segment’s surge is attributed to increased irrigation demand driven by strong, dry winds. Overall, customer connections expanded by 20% compared to the previous year, underscoring Meridian’s expanding market footprint.
Generation and Pricing Trends
Generation volumes in November were 2.7% higher than the same month last year, supported by increased hydro output despite a slight dip in wind generation. Year-to-date generation is up 12.7%, reflecting favorable inflows and operational efficiency. However, the average price Meridian received for its generation year-to-date is 50.6% lower than the prior year, while the cost to supply retail customers has increased, indicating margin pressures amid fluctuating market prices. Short-term electricity futures prices on the ASX have decreased, suggesting market expectations of softer prices ahead.
Outlook and Market Implications
Meridian’s strong hydrological position and rising demand provide a solid foundation for operational performance in the near term. The company’s ability to capitalize on abundant water resources and growing retail sales bodes well for revenue growth. Yet, the divergence between generation prices and supply costs warrants close monitoring, as it could impact profitability if sustained. Investors will be watching subsequent monthly reports for confirmation of these trends and the company’s strategic responses to evolving market conditions.
Bottom Line?
Meridian’s record inflows and rising demand set the stage for a promising year, but price dynamics could test margins ahead.
Questions in the middle?
- Will lower generation prices relative to supply costs compress Meridian’s margins further?
- How sustainable is the surge in retail sales volumes across all customer segments?
- What impact will the uneven rainfall distribution have on future hydro storage and generation?