Meridian Energy Limited (MEL) Earnings Call Transcript & Summary

[Foreign Language]. I welcome you all to Meridian's 2023 Annual Shareholder Meeting. To those of you who are joining us in person here at Meridian's office and Christchurch and to those who are joining us online. I welcome to the meeting, Anthony Smith from our auditors, Deloitte and Ian Beaumont from our solicitors Russell McVeagh. For those here in person at Meridian's Durham Street office, bathrooms are clearly marked and can be found through the sliding entrance doors to your left. In the case of an earthquake or an emergency, please note this is an earthquake safe building. Remaining in the building during a shake and adopting the drop, cover and hold protocol is the recommendation. In the event of a fire, an alarm will sound, please walk calmly and use the stairs located to the side of the lifts, where you came in, marked by the green exit signs. Do not use the lifts. If we must evacuate, there will be wardens who will usher you along the foot path to a safe muster point on -- close to road. When it is safe to do so, you'll be told to re-enter the building. Moving to today's business, I declare the 2023 Annual Shareholder Meeting open. The meeting has been duly convened and a quorum is present. The minutes of last year's meeting have been posted on Meridian's website and are held by the Company Secretary. Today's meeting is being held both in person and online via the Computershare Online Meetings platform. This allows shareholders, proxies and guests who are not able to travel and attend this meeting in person, the ability to attend virtually. All online attendees can watch a live webcast of the meeting and read the company documents associated with the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. For those of you attending virtually, if you have a question during the live meeting, please select the Q&A tab on the right half of your screen at any time. type your question into the field and press send. Your question will immediately be submitted. Should you require any assistance, you can type your query and one of the Computershare team will assist you via the chat function. Alternatively, you can call Computershare on (0800) 650-034. Please note that while you can submit questions from now on, I will not address them until the relevant time during the meeting. Your questions may be moderated or if we receive multiple questions on the same or similar topic we might amalgamate them together. And finally, due to -- if we may run out of time due to time constraints, and we are unable to answer your questions at this time. We will definitely answer them by e-mail. Voting today can be conducted by a way of -- will be conducted today by way of poll on all items of business. In order to provide all attendees with enough time to vote, I will shortly open the online voting for all resolutions. At that time, if you are eligible to vote at the meeting, you will be able to cast your vote under the vote tab. Once the voting has been opened, your questions will allow votes to be submitted. To vote, simply select your voting direction from the options on screen. You can vote for all resolutions at once or for each resolution. Your vote has been cast when the tick appears. To change your vote, simply select change your vote. You will have the ability to change your vote up until the time I declare that voting has closed. Persons attending the meeting who are not shareholders, proxy holders or corporate representatives of a shareholder may not vote, that includes bondholders. Voting is now open on all items of business. The resolutions will now be open in the vote tab. Please submit your votes at any time. I will give you a warning before I move to close voting. Let me start by introducing the Meridian board and some of the management team. This year, this hybrid meeting invites you to join in person or online. And you'll note that our management team and Board have followed this approach. The hybrid approach is largely driven by our commitment to show leadership in sustainable practice and specifically reduce the carbon and cost associated with the -- running the meeting. Meridian Board members present with me today are Julia Hoare, Mark Cairns, Tania Simpson and our latest recruit, David Carter. Meridian board members joining the meeting online are Nagaja Sanatkumar, Michelle Henderson and Graham Cockroft. Also present with me in Christchurch today are Chief Executive, Neal Barclay, our Chief Financial Officer, Mike Roan; our General Counsel, Jason Woolley, and Clair Shaw our General Manager, Sustainability and Corporate Affairs. The rest of Meridian's executive team is here online. With the purpose of clean energy for a fairer and healthier world, it is only right that a company of Meridian size and stature is doing what it can and what it must to combat climate change and be a good corporate citizen protecting the environment and helping Aotearoa New Zealand achieve its climate change goals and the transition to net zero. And this underpins our business decision and shapes the way that we operate. It's been pleasing to see a large number of industrial decarbonization projects announced over the last few years, utilizing the government investment and decarbonizing industry fund or the GIDI fund as we call it. These projects will reduce New Zealand's emissions by more than 1.5 million tonnes of CO2 per annum. But there's much more to do for Aotearoa to reach our emission reduction targets. And the emissions trading scheme or ETS, is a key in achieving that outcome. The ETS was developed to provide a sinking lid on the total net emissions and to send price signals that incentivize businesses to act. It is critical that successive governments avoid the temptation to tinker with this market mechanism and that the ETS evolves in a way that the country can have enduring confidence in it. The incentives need to be there for businesses and people to invest and reducing gross emissions, we can't just offset our way to a net-zero carbon economy. Aotearoa's electricity market continues to rate in the top 10 of OECD countries in terms of affordability, security and sustainability. This market is actually working really well. Data from MBIE shows that New Zealanders are benefiting from a range of retail choices available to them. And it's important not to conflate prices in the electricity wholesale market directly into the prices that our end customers pay. Wholesale market pricing is an input to end pricing, yes, but it's no more than that. It's also important to note that there are other inputs, including the cost of transmission and distribution, which are all reflected in the customer's bill. If you adjust for inflation, residential and business prices have actually trended down in New Zealand in the last 10 years. Over the same time frame, electricity costs as a percentage of average household income have actually fallen 25% from 2.4% to 1.8%. And whilst industrial prices have risen over the recent years, they are competitive internationally. Despite this, we recognize the rising cost of living generally means that more New Zealanders are finding it hard to pay for essentials such as power. We're very conscious of this. Meridian has been and intends always to be fully compliant with the electricity authorities consumer care guidelines. But we treat that as a base level requirement. And we think our record on customer care speaks for itself. We continue to have extremely low disconnection rates and our credit team operate to a mantra that we do not disconnect any person who genuinely wants to pay their bill, even if sometimes they cannot. We demonstrated our commitment last year to customers when we introduced our Energy Wellbeing Program pilot. This pilot was aimed to help customers in hardship obtain and afford adequate energy services in their homes to support their well-being and the well-being of their whanau. We are very pleased with the tangible difference the program made for the 130 households that were on the trial and who were struggling. Following the success of the pilot, the Board agreed to expand this program to help 5,000 households across the Meridian Group by investing a further $5 million over 2 years. The program involves building partnerships with communities that enable us to offer different levels of energy-efficient interventions. So far, we've supported 1,500 households and will be doubling this in the next 6 months. As a company, we've started bringing teams together internally to think about how we can resolve decarbonization and hardship together. For example, giving people what we would call energy sovereignty, that could involve providing customers in hardship with access to batteries or solar and virtual power plant options or demand response flexibility products. We have a lot of good brains collaborating on this right now. Electrification of transport and industry is one of the best ways New Zealand can prioritize and combat climate change, particularly given these sectors are directly responsible for almost 1/4 of the country's gross carbon emissions. So it is vital we continue to build new renewable generation assets and enhance our existing ones to ensure that we can meet the future growth in electricity demand. We expect by 2050, Aotearoa will require around $30 billion of new investment in renewable generation. For Meridian to do its share of the heavy lifting, approximately 30%, we'll need to build the equivalent of 20 wind farms in the next 27 years. This will require a massive capital investment and for that investment to be supported our Aotearoa must have an enabling resource management framework, especially when it comes to consenting. Consenting authorities need to be able to balance localized environmental impacts and community views with the national and global imperative to reduce emissions through large-scale renewable energy projects. At this stage, it's not clear to us whether the new Natural and Built Environment Act will actually make it easier to build renewable generation as key elements like the national policy statement for renewable electricity generation remains a work in progress as it today. A change in government could also see policy settings change. Whatever happens, this sector will remain highly aligned and engaged with government and on the need for a responsive resource management framework that supports and prioritizes renewable generation. The government also completed a pre-election drop of a range of consultation papers on energy topics, including gas transition and a hydrogen road map. Cabinet has also decided to further investigate the Lake Onslow pumped hydro storage scheme in a more market-based portfolio approach as the 2 options under the New Zealand battery project. All of this activity is aimed to inform the New Zealand energy strategy. However, a change in government could also see a change of approach. The overarching imperative for New Zealand to achieve net-zero carbon by 2050 will not change, however, nor will the fact that renewable energy is the largest single enabler of the economic climate related transition that we need to make. So we're confident that our strategy to focus our efforts on climate action is sound. We'll continue to develop renewable generation options to support customers to decarbonize their homes and businesses, while doing what we can to support those customers who are suffering hardship. We think this strategic direction will hold this business in very good stead. We continue to advocate for balanced and diverse views at Board level to oversee our strategy and guide the business through the years ahead. We welcomed 2 new non-executive directors to our Board in the last year, Graham Cockroft and David Carter. Graham and David are both experienced business leaders who we know will add significant value to our business. We also welcomed Benjamin Bateman as our next future director. Today, we'll also be saying goodbye to Mark Cairns. Mark has been on the Board since 2012. And for much of that time has been Chair of our Safety and Sustainability Committee. His leadership has led to an appropriately high focus on these areas of risk for the business, but importantly, also on the opportunities to create and enhance long-term value by thinking about what being truly sustainable means. And we will personally miss, at the Board, his zealot-like approach for focusing on EV infrastructure development to enable to encourage EV uptake. Mark has been a champion for the cause, and you will be missed. I will conclude my opening remarks by making some observations on shareholder returns. Off the back of a strong cash operating result, the Board declared a final ordinary dividend of $0.119 a share, which is up 3% on the previous year. And that brings total ordinary dividends declared for the 2023 financial year to $0.179, which is up 3% on the previous year. And we've also continued with the dividend reinvestment plan and made that available for any investors wishing to take advantage of it. Given we're approaching the 10-year anniversary of Meridian's listing, it is worth reflecting that total shareholder return since listing have totaled 380% compared with the NZX Index growth over the same period of 130%. We think it is fair to say the company has performed well for investors since listing. Looking forward, the sale of our Australian operations in January 2022 strengthened our balance sheet considerably and with the investment capability to support the growth strategies of our retail renewable generation and Southern Green Hydrogen projects. The Board is, therefore, confident that Meridian can play its part in New Zealand's decarbonization program while continuing to deliver competitive returns to you, our investors. Thank you for continuing to invest in the company and support it, and I'll ask our Chief Executive, Neal Barclay now to address the meeting.

[Foreign Language] Good morning, ladies and gentlemen. I'd like to start by introducing the exec team. Mark has gone through a number of them, but we'll rattle through the team again. Most -- some of them are here in person. The rest are all online. So we have Lisa Hannifin, our Chief Customer Officer; Mike Roan, Chief Financial Officer; Bharat Ratanpal, Chief Information Officer; Nic Kennedy, Chief Executive of Flux Federation; Tania Palmer, General Manager of Generation; Jason Stein, Chief People Officer; Chris Ewers, General Manager of Wholesale, Claire Shaw, General Manager of Sustainability and Corporate Affairs; Guy Waipara, General Manager of Development; and Jason Woolley, Company Secretary and General Counsel. The executive team have been stable and very productive, I believe, in the last year. Nic Kennedy now reports to an independent board as we want to accelerate the growth potential for Flux Federation, but Nic remains a key member of the executive talent at Meridian. So it seems only right that I start my address talking about the great team we have at Meridian because it is this team that has enabled us to continue -- successfully managing the business and to grow it. The rate of change in our industry is only speeding up, and our ability as a business to anticipate and lead change whilst delivering solutions for our customers, all comes down to our people and our culture. This year, we've invested a lot of time and effort into ensuring that Meridian continues to offer a great employee experience. So we continue to attract and retain the talent we need for the future. Our belonging strategy is aimed at building on our diversity and encouraging a true sense of belonging that defies ethnic, belief and gender constraints. We introduced the Te ao Maori strategy during the year aimed at lifting the overall cultural capability of our people and supporting us to better recognize Maori values and how we operate and how we attract and retain Maori in our workforce. Obviously, remuneration and benefits have a part to play in maintaining a skilled and engaged team. And with this in mind, we refreshed our benefits package adding some important new features such as health insurance for all staff. and wellbeing leave. We also believe that we have effectively normalized hybrid ways of working. And in doing so, we've enhanced the overall productivity of the company. In the years ahead, as we accelerate our renewable construction program, we are committed to managing the safety risks for our people. And in doing so, we will continue to work alongside other sector safety groups. This year, we reviewed and rebuilt our understanding of the controls that manage our critical risks in the business. We ended the year with a calculated total recordable injury frequency rate for employees and contractors per 200,000 hours worked of 1.76 compared to 1.58 in FY '22. Overall, these results compare very well with other large industrial companies and the averages across those sectors. Now it's important for us as New Zealand's largest renewable energy generator in Aotearoa that we walk the talk when it comes to sustainability and climate action. But to succeed, we must work together across the Meridian team with communities, our customers and sector peers. Whether we're working on material actions or small details, we need to continue to challenge ourselves to make the changes that will have the most impact and supporting New Zealand's transition to net zero by 2050. It was pleasing to see that our sustainability efforts were once again recognized this year when Meridian was named one of Aotearoa's most sustainable companies in the Kantar Better Futures report. This is good recognition, but the overarching sentiment in our business is that we must continue to maintain and grow momentum because significant and meaningful changes needed, and it's needed right now. This is why we've continued to focus on our climate action plan, which includes ambitious targets for renewable electricity generation, customer decarbonization and managing our own emissions. A great example of progress can be seen in our approach to the Harapaki wind farm development in Hawkes Bay. We estimate that we've avoided construction-related emissions of between the equivalent of 15,000 to 20,000 tonnes of CO2 through a detailed focus on the reduction of embedded carbon in the design stage and careful on-site actions during construction. We have specific sustainability roles at Harapaki and we continue to build intellectual property that will benchmark sustainable practice for all future projects in our development pipeline. Our Forever Forests project, which is our plan to create a permanent native forest carbon sink will eventually see 1.5 million trees sequester the remaining carbon that we cannot remove from our operations after our Half by 2030 program is complete. Now we have around 1,200 hectares of land in the program and around 300,000 trees planted. And by the end of this coming financial year, we'll have 700,000 trees in the ground. So we're making a meaningful difference in getting that program going. We need to invest heavily in renewable electricity generation to support Aotearoa's goal of net-zero emissions by 2050. To achieve the scale of development, we firstly need to make sure that we have the capability to deliver it. Having retained the renewable development team for a number of years, we're investing strongly in supporting their progress. This has seen that team double in size over the last couple of years, and that has helped us to more than double the size of the potential renewable projects that we've created and we've created a deep pipeline of development options totally more than 11,000 gigawatt hours. To put that in context, that's the equivalent of about 90% of our current generation portfolio. That pipeline will undoubtedly change over time, but our focus is on creating a portfolio of options that will support our business growth for the next 30 years. We are continuing to progress with our Ruakaka Energy Park in Northland. At Ruakaka, we are building New Zealand's first grid-scale battery, and we have also lodged consent for a 1,200-megawatt solar farm as part of the same development. In May this year, we launched consent for our Mount Munro wind farm, a 90-megawatt development in the Wairarapa. And we are currently expecting to lodge consent for our 130 megawatts Swannanoa solar project near Christchurch early next year. And just hot off the press this morning, we announced an agreement with Parkwind, the Parkwind an experienced European offshore wind developer. We're going to work with them to jointly explore offshore wind generation here in New Zealand. The risks and complexities of building wind farms in the ocean are far different than those for onshore wind. And it's great to have an experienced partner on board to position us to harness Aotearoa's offshore wind potential. Our work on reconsenting the Waitaki Power Scheme reached a significant milestone in August when we lodged a new consent application. We are seeking a further 35-year operating consent from April 2025. The consent seeks to cover the 6 hydro power stations that we manage within the scheme under the same conditions as we have today. We've been working hard with many interested people for many years to ensure our application has strong support across the board. Importantly, we've reached an agreement with DOC to turbo charge Project River recovery. And we're developing a strong partnership with the Waitaki Runaka of Ngai Tahu that will deliver environmental and cultural benefits for generations to come. The Harapaki wind farm has worn the impacts of ex-tropical cyclone and a number of -- sorry, cyclones and a number of other large rainfall events during the first 2 years of construction. Cyclone Gabrielle, we all now caused widespread damage over a large area, including within our construction site. And as we signaled in the middle of the year, we've lost around 3 months to the overall schedule, but the project is now up out of the ground and large turbine components are being transported to and erected at site. So we are confident we'll have the whole thing stood up and operating by September next year. The Harapaki wind farm will produce enough power to supply around 70,000 kiwi homes. And just as importantly, it will help improve grid resilience into the Hawkes Bay region. We're working with credible and committed partners on the Southern Green Hydrogen project. Woodside and Mitsui are there, and we have secured the option for Ngai Tahu to join the joint venture at the point of financial commitment. There's a lot of complexity in the technical and commercial terms of the development phase. So progress has been careful because the joint venture foundations need to be right. But what we have here is real, hydrogen will play a significant part in the future low-carbon energy system in New Zealand. For me, Southern Green Hydrogen represents not only a strong commercial opportunity for our business but even more importantly, a significant step towards energy independence for our country. We signaled last year that we would be evolving our customer approach to concentrate on developing energy solutions focused on electric vehicles, rooftop solar and batteries, process heat and demand flexibility. This customer strategy aligns with our company's decarbonization agenda and will support customers to take emissions out of their own operations, while saving money on their overall energy bills. We've quietly built up the country's second largest public EV charging network. We now have 269 Zero branded charging points across both the North and South Islands. Our certified renewable energy product has also enabled around 100 large business customers to purchase more than 660 gigawatt hours of renewable energy certificates this last year. This enables those customers to legitimately offset their Scope 2 emissions and improve the sustainability and marketing of their products. Renewable energy certificates are a particular value to customers who are engaged in export markets, as they reflect New Zealand's competitive advantage inherent in our highly renewable electricity system. Further, we've committed to reinvest all the proceeds from renewable energy certificates into a new decarbonization fund. To date, more than $1.2 million has been raised and all of that is going into projects that will support climate action. We've been working with 15 companies over the last 3 years to support them to reduce their emissions profiles from process heat. These businesses that you can see on the screen here today, including some very well-known South Island brands. and making significant changes to their businesses to help combat climate change. We commend them for showing leadership and getting on with it. We continue to support demand response opportunities wherever possible customers who can manage their demand down and reduce the electricity usage when supply is constrained for example, when the southern hydro lakes are low or during very cold winter morning or evening peaks. We can pay them handsomely for not using energy at those times, and that also avoids having to add gas and coal-fired generation into the system. It's like creating megawatts without actually having to build them. And it's a strong win-win for the customer, and those customers and the electricity system as a whole. Meridian has commitments of up to 90 megawatts of seasonal demand response from customers. And that's the equivalent of the annual capacity of the next wind farm we're looking to build. This is also a key reason why we are pursuing our Southern Green Hydrogen project. With the right incentives in place, Southern Green hydrogen can flexibly manage its demand on the electricity system in a way that could eliminate up to 40% of New Zealand's dry year risk. And there's a lot more to come. So despite the range of weather challenges during the last financial year, but there are always as those, healthy electricity generation numbers and continued growth in retail sales ensured a strong financial result. Now whilst our reported net profit after tax of $95 million for the year -- for the year ended 30 June 2023, the accounting result was heavily influenced by a negative $375 million net change in the fair value of energy hedges. These are noncash fair value adjustments, and they relate to transactions that will mature in future years. As a better measure of actual performance within the year, EBITDAF of $783 million was up 10% on the prior year, and underlying net profit after tax, which is a non-GAAP measure was also up 35% to $315 million. I think overall, the business is in very good shape. We've continued to deliver incremental cash earnings, supporting a progressive dividend approach, whilst also building on our pipeline of future growth opportunities. So to finish up, I'd like to thank you, all our shareholders, for continuing to invest in Meridian. I'd like to thank our Board for their support, their challenge and clear focus on creating long-term value. And I'd like to thank our management team in the broader Meridian whanau who are unwavering in the efforts to deliver on our company purpose, clean energy for a fairer healthier world. We're looking forward to embracing the challenges ahead and growing our business in a way that supports our country's net-zero emissions goals. Thank you.

Thanks, Neal. I can advise by the way, that the number of shareholders who are participating online is 55, specific request of the New Zealand Shareholders' Association. So that's the number online. So I can advise that we've received one written question so far. I'll cover that off before we move to the floor and the questions from the floor in the online audience.

The question comes from shareholder, Jillian King. Jillian asks why is Meridian still invested in fossil gas. What are our plans to get out of gas? And when will Meridian be honest in its marketing publicity and in reporting about its energy sources and that, in particular, it is not supplying energy from 100% renewable sources i.e., wind, water and sun. Thanks for your question, Jillian. Please note that we've not invested in gas. We did use to retail gas in our Australian business which we sold in early 2022. Now I can absolutely guarantee you that the only electricity we generate is from wind, water and sun, it is 100% renewable. Now I'm happy to take questions from the floor. And then following that, I will take questions online. Would you please introduce yourself so that those online?

[ Peter Wakeman ], shareholder from Christchurch. You mentioned -- this is to the CEO and the Board about offshore wind farm partnerships. I just wonder what sort of cost is involved because many years ago, my understanding was in the European market that wind farms were only viable in Europe in the event that they got a big subsea. That's the first question. I'll let you answer that one before I move on.

Do you want me to answer that.

Yes, sure.

Yes. Look, offshore wind is more expensive than onshore wind. It's a whole different ball game. For example, when you maintain the machines, you have to have a purpose-built ship to get out to them rather than a couple of people [indiscernible]. But the amount of investment going in overseas and building these machines in a more efficient way, larger scales means that those costs are coming down. So part of our move here is to ensure that we understand the technology. We understand where the trends are going, so that when onshore, offshore wind becomes viable in New Zealand, and it could be as early as next decade, then we're well positioned to participate in that part of the market.

So it's basically covering ourselves in the event that we need to do it, but no plans at this stage.

We don't have a committed investment program, but that's part of our partnership with Parkwind is to actually see what's viable. We still think there's a lot of onshore wind availability in New Zealand. We're very blessed with wind for those of us that live in this country know that. But offshore will certainly be a feature of the electricity sector, if we're going to decarbonize fully.

Okay. I have to declare an interest. I'm running as an independent and the Banks Peninsula Electric this year in the general election. I want to know from a water viewpoint because we've had the 3 waters and I was listening to someone described the different views of water. And just from a Meridian viewpoint of water from a political risk and cost point of view, what do you have to say, with regards to the definition in the future for affecting the Meridian Energy portfolio.

Well, we don't have a particular view on the various different governance forms per se. We will work with whatever we are focused on our specific catchments and the impact that they have from a physical point of view and a cultural point of view, and that's where our focus has been.

Yes. But just as far as the cost recovery, do you think it's early days from politicians can change rules overnight. Do you have any warnings or concerns on this issue?

Well, in the main for most of our assets, we don't consume water ourselves. So it's a pass-through. It's not -- we do divert it in the case of some of our Waiau or Manapouri system. But charging per se obviously, if there were charges imposed, that would have impacted the economics and ultimately, the charges that we would have to make to customers. It's not an issue at the moment. I'm not sure it's been muted as such that we should pay or contribute?

No, there is no -- as far as we're concerned, policy direction and either party of the government potentially along those parts, but it could be a feature of the future. We don't know at this...

And the last question is, given the age of our hydro and some of the challenges that we face with keeping them up to date versus the cost of wind farms, how would you describe the maintenance of a wind farm versus hydro at the moment and some of the concerns that we have.

Well, in terms of if you like, our longest dated assets or hydro assets, in fact, from a maintenance point of view, in the main, they perform extremely well, and it's just an absolute underpinning of the whole system that we have that hydro storage. New Zealand is so advantaged by having that. Maintenance wise, the economic life of a wind farm is less. So you expect the maintenance sort of in the main to be higher over the economic life of the asset. But that said, that's all work through in terms of the overall economics and wins and certainly the new development. And we base it off what we call the levelized cost of energy when we're assessing projects for the -- whether economically makes sense. They perform extremely well. And it's an abundant source and to a degree, still untapped in New Zealand that New Zealand can use for decarbonization going forward.

I was mainly referring to costs for maintenance for the new wind farm versus the old wind farms that we have, I'm just...

Certainly, like any technology advancement, we're now going to direct drive. So we don't have gearboxes in the turbines. So the newer technology is -- definitely involves less maintenance. And it's just the evolution of technological advance.

The costs are coming down. That's the trend.

I am [ Frank Stewart ]. I'm representing the New Zealand Shareholders Association, and I'm also a shareholder. And I have to say that the shareholders association are very pleased with the completeness and the quality of the information that's provided in the company's annual report. The question I had was about you've introduced a dividend reinvestment plan. Is that being taken up by the major shareholders representing the government interest the government itself, the super fund ACC.

Might actually look -- I'm looking to our Investor Relations manager, who probably has the answer to that.

I probably find out by looking at various sources, but...

We have an agreement with the government and historic ownership that participates in the DRP by the decisions made by government institutions such as ACC or super fund are made in [indiscernible] the central government. And currently, neither or those [indiscernible] previously, but it's a discretionary decision that may have impacted....

Yes. So for the benefit of those people online who might not have been able to hear Mr. Hackston's response, the government -- the Crown has a participation agreement in relation to the dividend reinvestment plan. They exercise their rights under that basically to ensure that they keep their 51% shareholding as capital might slowly increase. In terms of Crown-owned financial institutions such as ACC and New Zealand super, they are currently not exercising rights to participate under that scheme. So they're collecting dividends and cash. Thank you. Are there any other questions from the floor?

My name is [ Andrew Mackenzie ]. You mentioned $30 billion investment needed over 20 years for the sector of which Meridian would come up with $9 billion or $10 billion of that. That's $450 million a year. Is that sustainable along with the dividends you're currently paying? And if so, how would you do it with price increases or how would you go about it?

Well, currently, on our projections, yes, we can sustain the development pipeline that we have in mind and continue to pay dividends. That's all things being equal. Nothings so certain here.

As you grow your generation portfolio and your customer relationships as a result, that adds profit to the bottom line as well, which helps facilitate a bigger balance sheet. So it is self-funding over time.

[ Richard Hayley ]. Just a clarification regarding the lifespan or expectancy for your wind farms. Currently, you would expect the wind farm to be economically viable for how many years and the new developments. What are you looking at in terms of -- for the future?

So Harapaki, for example, our latest wind farm is under an availability warranty for the next 30 years. So the provider of the equipment has guaranteed that it will continue to operate at a high availability, 90% plus for the full duration. That also -- that's in all the maintenance to keep it that way throughout that period. So it's got a definite 30-year time frame beyond the 30 years, you'll probably run them a bit longer, but then you start running into constraints around the tortional strength of the towers and so forth, but at least 30 years guaranteed high performance.

Any other questions from the floor?

[indiscernible] shareholder. On your generation demand graph, you sort of seem to show a large increase predicted demand from about 2027 after it seems to be otherwise leveling off. Could you explain what has led to that?

Well, I'll let Neal answer that. But gradually, as industry and transport gets electrified. That's where the bump in demand is really starting to kick in. And I haven't got the graph in front of me, but if it's showing 2027, that is really evidencing significant EV uptake, for example, and...