Meridian Energy’s generation rose 21.1% year on year in August as strong hydro and wind conditions pushed national storage to 155% of historical average. But average generation prices fell 62.3%, highlighting the tension between abundant supply and weaker market pricing.
- Generation up 21.1% year on year to 1,432 GWh
- National hydro storage rises to 155% of historical average
- Average generation price falls 62.3% to $66.6/MWh
- Retail sales volumes decline 4.7% year on year
- August capital expenditure reaches $34m
Hydro storage strengthens as generation accelerates
Meridian Energy Limited (NZX:MEL, ASX:MEZ) produced 1,432 GWh of electricity in August, up 21.1% from the same month last year, as hydro and wind generation both increased. Hydro output climbed to 1,258 GWh from 1,030 GWh, while wind generation reached 168 GWh. National hydro storage then rose from 128% to 155% of historical average in the month to 7 September.
The company’s own water position was similarly strong. August inflows reached 145% of historical average, Waitaki storage ended the month at 161% of average and Waiau storage at 172%. Snow storage in the Waitaki catchment stood at 106% of average in early September. Meridian chief executive Mike Roan said the company and the wider sector comfortably met a new national demand record on the morning of 6 August, supported by renewable generation and North Island batteries.
Lower prices offset stronger physical output
The operational numbers came with a sharp price reversal. Meridian’s average price received for physical generation fell 62.3% year on year to $66.6/MWh, while its average price paid to supply retail customers dropped 60.4% to $82.2/MWh. For the first two months of the financial year, the corresponding declines were 59.8% and 56.4%.
August also saw further decreases in ASX electricity futures prices, according to the report. The combination of higher generation and lower prices gives the update a distinctly mixed financial signal: the storage position supports availability, but the filing does not provide updated earnings guidance or quantify the effect of these market prices on future profit.
Retail volumes soften while demand reaches a record
National electricity demand was 0.3% lower than in August 2025, although the month included the country’s highest recorded peak demand. New Zealand Aluminium Smelters’ average load rose to 578MW from 565MW a year earlier, when a 50MW demand-response reduction had been agreed with Meridian.
Meridian’s retail sales volumes fell 4.7% year on year, with residential sales down 2.7%, small and medium business down 4.3%, agriculture down 3.3% and corporate sales down 9.2%. Large business was the exception, increasing 5.1%. Customer connections declined 1.2% during August and were down 0.4% over the preceding 12 months.
Capital spending rises with batteries in the mix
Meridian spent a reported $34m on capital expenditure in August, comprising $6m of stay-in-business spending and $28m of investment capital expenditure. Investment spending for the first two months of the financial year reached $49m, more than double the $22m recorded in the same period a year earlier.
Battery energy storage system supply volumes rose to 7 GWh in August from 2 GWh a year earlier, while BESS generation increased to 5 GWh from 1 GWh. The report’s next test will be whether high storage and greater renewable output can translate into stronger financial performance while wholesale prices remain materially below last year’s levels.
Bottom Line?
Meridian enters the warmer months with unusually strong water reserves and rising generation capacity, but weaker electricity prices remain the key constraint on how much value that abundance creates.
Questions in the middle?
- How long can national and South Island storage remain well above average as El Niño conditions develop?
- Will lower wholesale prices continue to outweigh the benefit of higher hydro and wind generation?
- Can retail volumes and customer connections stabilise after August’s declines?