Genesis Energy plans coal imports amidst decline in gas production

Local gas production was down by 33.4% YoY in April.

New Zealand’s Genesis Energy is planning to import coal to maintain a solid fuel stockpile amidst the substantial decline in gas production.

In a statement, Genesis Energy said that it aims to maintain an operating stockpile of gas and coal-run Huntly Power Station of around 350,000 tonnes or about 670 gigawatt-hours of electricity to support the wind and solar facilities.

However, there has been a significant decline in gas production in New Zealand with the production dropping by 33.4% year-on-year, which means that burning more coal is needed to keep the power station running.

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“The solid fuel transition toward lower carbon options like biomass will take some years and during this transitionary period, in order to ensure energy security and stability, there will be a need to use some coal, with imported options currently being the most efficient for the quantity we need,” said Genesis Energy Chief Executive Malcolm Johns.

“The solid fuel stockpile will fall below 350,000 tonnes by the end of winter and this will trigger a need to order more solid fuel deliveries to maintain the target operational stockpile ahead of the winters 2025 and 2026. Imported options have a delivery time of around three months,” he added.

The company added that the extended period of low hydro inflows that require more contribution from higher thermal electricity generation contributed to the decline of its stockpile, coupled with power demand growth.

A prolonged outage at the Huntly Power Station’s Unit Five gas turbine from June 2023 to January 2024 also forced the use of more coal power.