Meridian Energy Limited (MEL) Earnings Call Transcript & Summary

[Foreign Language] [Presentation]

Right. Now that I've got your attention. Welcome to our 2024 Investor Day. I'm Owen Hackston, Meridian's Investor Relations Manager. And for the rest of today, we're going to work through a series of short sharp 20-minute sessions. There will be some usual suspects and a number of our general and senior management team running through the schedule. For the online audience, in particular, and here I've highlighted when the key breaks are. You can make a note of those. For the people in the room, the idea is they are about a 15-minute session with the 5 minutes or so for questions. So there is some opportunity, but we do have to stick to time as a lot of travel that's happening immediately after we finish. [Operator Instructions] In case of a fire alarm here, calmly leave the room. The assembly point is at the front of the hotel on the grass area near the road. Toilets are immediately out that door, through a set of double doors to left. In the event of the earthquake, get under your chair and I'd hold on. Don't try and leave the room until we've got further instructions. For those in the room, devices on silent, please. There are posters up for the WiFi details if you need it. My only other point, is to say, we look like we're comfortably through the morning demand peak without a great emergency. So you should have uninterrupted electricity supply. With that, I'd like to introduce Mark Verbiest, Meridian's Chair. He's going to make some opening comments from not in the room actually. Mike, over to you.

Thanks, Owen, and welcome, everyone, to our first Investor Day for 3 years. I can tell you for a fact that Owen is extremely happy that we are able to host you today after a few save the date requests went out previously, and we went able to oblige. I'm sorry I can't be with you in person today. I'm in Australia for previously organized Somerset meetings. And for those of you that managed to get to Manapouri yesterday, I hope you enjoyed it. It's a very special part of the world, and I can assure you, we don't take lightly the privilege of being able to operate down there. I know that Neal will certainly -- shortly cover off what we've executed since our last Investor Day, and understandably, it's quite a bit given the time delta from our last time we hosted you. And naturally, a large chunk of our near-term strategy was focused on mitigating the risk of the aluminum smelter closure, while making sure that we were ready and able to participate and forecast growth in electricity consumption. As we now all know, the smelter is stunning and the certainty that brands is special for our business and indeed the sector, and we haven't seen that for a number of years. And regarding the negotiations and the agreements themselves, I can tell you that I've been involved in some complicated deals and negotiations before, but this one trumps all others by some margin. And I especially want to credit Neal, Mike and the team for the job that they did and the outcomes that have been achieved not just for us but also for the sector in the country. Because these -- the nature of the agreement is not only good for us, they are good for the country and good for the planet. I know the team has invited Chris Blenkiron to provide his perspective on the outcome and he will do so soon. And I did want to acknowledge Rio Tinto and in particular, Chris for his leadership through the negotiations and indeed, all the other generators, who participated in getting to this point. The smelters employees and Southland now have long-term certainty and the new demand response commitments mean that New Zealand has a new battery in times of fuel scarcity. This deal, coupled with the government's focus on assisting with gas supply and exploration policy among other initiatives the government has underway, has gone a long way to underpin investment setting security. For Meridian, this certainty means that we can now consider again the speed of our future capital investment program and options around our dividend profile. That work is now going on. And whilst I don't have anything more to add today, we will provide a dividend update at our annual results presentation on the 28th of August. Today is obviously an opportunity for you to hear about a number of aspects of our strategy and operations. And as part of that, I just wanted to set the scene by giving you some context and some thoughts from the boards perspective. Now Slide 2, please. Last year's change of government brought with changes that are generally supportive of competition and investment in the sector. The Onslow pumped hydro option whilst technically feasible would have brought with an enormous cost and environmental impact and its size and operational uncertainty would have likely had a cooling effect on private sector generation investment, and indeed, would have taken more than a decade before the country saw any real impact. We've already seen the cooling effect of prior policy on investment in the gas market. The national lead government also appears to be more logically positioned to let private sector investment sold for the future, for the sector's future needs. And I genuinely believe this is a good thing for the country. Initiatives are also underway between major players in the sector, officials and the government in an effort to co-ordinate the necessary energy transition. There's a lot to be built in coordination of infrastructure build, generation, transmission and distribution will be absolutely critical. Whilst the sitting government has now repealed the previous government's offshore oil and exploration ban, sovereign risk obviously remains. And overseas capital needs long-term investment certainty before it returns to gas exploration and development in New Zealand. And it's pleasing to see the reiteration of the country's 2050 Net Zero commitment and to see a specific objective around doubling of renewable generation as part of the transition. Guy will no doubt take you further into the world of consenting later, but for now, suffice it to say it's widely recognized that the resource management act process are too expensive and too time consuming. Previous government had proposed changes, but they ran the risk of replacing large complex legislation with the yet another form of large complex legislation. While we support the new Fast Track legislation process in the bill, we have submitted on areas where we think the bill can be improved to enhance environmental safeguards and also reduce the scope for challenge. We've also suggested extending coverage to ensure that the bill covers existing asset reconsenting. We also believe that further enhancements can be made to balance national and local interests. But for sure, getting momentum on infrastructure is sorely overdue, not just in our sector, and clarity and simplicity will go a long way to achieving that outcome. Third slide, please. New Zealand's 2050 net zero commitment underpins a significant investment cycle for our sector. While I note the sector will need to invest $30 billion in new generation assets to meet the commitment, new investment across the wide the whole of the sector could exceed $100 billion. Meaningful reductions in carbon emissions are possible with renewable electricity, displacing carbon intensive fuels, and the industrial manufacturing, construction and transport sectors of the economy. In total, those sectors are currently the source of nearly 1/3 of this country's greenhouse gas emissions. Neal will talk to some of the more specific areas that are expected to drive future growth, but big picture, demand growth estimates by 2050 range between 50% to 75% additional to current consumption. Technology advancements such as Gen AI, which are dependent on data centers and electricity could help push these ranges towards the top end. The smelter demand response arrangements bring to market scale demand amounts to help meet the challenges of peaking confirming in a lower carbon electricity system. Few countries transition to a low-carbon electricity system is likely to be smooth. While our own countries transition is smaller than other jurisdictions, we are feeling pinch points already right now primarily as the gas sector is not currently in great shape to be able to support the transition. Despite significant investment having gone into gas exploration over the last few years has actually been little in the way of positive results. So the smelter demand response product supported by other similar demand side products is very important and valuable and more so than we expected even 12 months ago. There is clearly significant value and flexibility. The same applies to the value in our hydro lakes. Notwithstanding the current gas sector issues, we ultimately see a need for gas-fired generation for some time to come. Its ability to flexibly add energy to the system from just a few hours to all the way to a few months is largely unmatched at present in replacing it, in a potentially very short time frame will likely create some turbulence during the transition. In time, a combination of solutions, including technology lead ones will have a part to play, but certainly not in the next 5 minutes. To get the sector on to a build foot in sufficient to meet demand projections, grid and distribution investment will need to keep pace. The new investments in renewable electricity injected into the system over the last few years has been offsetting declining thermal utilization, but there's now growing confidence that demand growth is returning. And I know that Neal intends to unpick that further for you. After a decade of decreases in real residential electricity costs, cost pressures are building. The country's gas supply uncertainty has underpinned sustained higher than historic levels in wholesale electricity prices for a decent amount of time now. Future transition -- transmission and distribution growth and resilient investment will inevitably flow through to customers. How we exercise our social license to operate in these circumstances will be very important. For local lines currently subject to revenue limits, the Commerce Commission is proposing to set the maximum allowable revenues at a total of $12 billion across their part of the sector for the next 5 years. That represents a 50% increase on the previous 5 years. The commission is also proposing to set Transpower's maximum allowable revenues at a total of $6 billion for the next 5 years, and that represents a 43% increase on the prior 5-year period. As I mentioned earlier, a lot of this investment needs to find its way through the consenting regime. We do need a more navigable process, but one that also doesn't marginalize relevant stakeholders. The electricity sector is a key enabler of New Zealand's low-carbon future. Electrification offers a genuine opportunity to remove carbon across the economy, including the wider energy sector. In the long term, that can only be achieved with a stable and sensible energy market with reliable market-based investment signals. The government's role in this energy transition is one of enablement and support. We would say not one of interventionism. The current signs of that are good. In the short term, effective ETS settings, favorable consenting reforms and the pragmatic gas reform and most likely to enable the sector to remain a strong performer in the context of the Energy trilemma of affordability, reliability and sustainability. We have a part to play as well to act responsibly and reasonably. So it's a bit of a whistle stop tour of, if you like, the strategic context and the issues that the Board are thinking about and the team, indeed, have a number of initiatives underway. I'm happy to answer a few questions if there are any at this early stage.

Thanks, Mark. I think we've taken sympathy on the fact that you're discharging some of the responsibilities at the same time. I certainly appreciate your time. It's relatively early where you are. Thanks again, and we'll just keep moving through the day, so I'm going to pass it over to Neal Barclay Chief Executive.

[Foreign Language]. And good to see you all here this morning, especially after a late evening last night for a few of us. I would like to -- Mark has acknowledged Chris and certainly I am looking forward to hearing you talk to the team later on today straight after me. And I would acknowledge it was a very complex time-consuming negotiations that we've been involved in for many years now, and to conclude it in such a positive and constructive fashion in a way that's great for not only the sector, but the country as a whole, plus all of the [ folk ] in Southland was just a real highlight of my career to be frank. And I think the breakthrough as we work through that was really the change in approach by NZAS and their owners. The level of engagement improved significantly and they took on responsibility also for organizing the other [indiscernible] as part of the package of solutions they needed. I don't think we would have got the [indiscernible]. So genuinely to call out the Rio Tinto team and the NZAS team for helping get to that sort of end outcome was fantastic. And it will free up -- does provide the sector a lot of certainty. And it will free up a lot of investment, particularly in the South Island going forward. So it's exactly what we needed. But I think also when you stand back and look at what occurred, it is quite insightful because 4 years ago, Rio Tinto were on the path, a committed path to close that smelter. Aluminum prices were low at the time. But the reason driving the closure decision was the relative cost position of the smelter on a global sense. Now here we are now, and we've got a committed plan to sort of keep the thing open and operating well for the next 20 years. Now the cost structure of the facility hasn't changed. In fact, it might have got a little bit worse. But what has changed is the value of the green energy required to power it. And I think in there lies the opportunity for New Zealand global markets are starting to value the green premium. And New Zealand is uniquely positioned to be able to deliver products using a green renewable backed electricity system. We already have a diversified renewable electricity system in this country. Australia does not have one of those. Neither do most of our trading partners. And as Mark pointed out, to get one, will be hellishly expensive for them. So I think as a country, we have a unique opportunity to actually sell the value of that system to the world. We do a poor job of actually explaining what a strong sector we have in New Zealand to New Zealanders. We need to do a better job of explaining to the rest of the world what we can offer. We need to open up the doors, we need to invite foreign investment. We need to support growth in renewable green products developed in this country. And hopefully, reverse to some extent the industrialization trend that is sort of, I think, been a large factor in our loss of productivity in a relative sense over many, many years in this country. So we've got to take the opportunity. And it's a once-in-a-generation opportunity. I was going to mention Gen AI just to wind up, Andrew, but I won't do that because, Mark has already done that. So that's good. We'll see data AI may or may not deliver massive demand growth. But there are other -- certainly other drivers of growth out there that we can explore. And I was sort of -- I was even contemplating this morning on the PM's recent trip to Japan, I doubt anyone on that plane that didn't arrive was from the electricity sector. And we probably need to do a lot better job marketing ourselves. Now we do have some headwinds, clearly, and the gas sector, in particular, has been challenging. We've seen a significant curtailment of investment over a number of years, largely driven by government policy settings back into IT. And most of the investment that has gone into the sector hasn't delivered the results that we would have liked. So at a time, where we've got more and more intermittent baseload generation coming into the sector, we've got less dispatchable firming generation available to manage the overall system security side of things. So we do need that flexible dispatchable demand and supply and gas must remain part of the sector for some time to come. Now the government has formed a gas security response group to start looking at addressing the issues directly. It's got all the key players, all the parties that you would expect to be on that response group, including Meridian. And importantly, the message we're getting from the Minister of Energy through that process, and it is an important message is markets need to solve this. There is an magic amount of government money that's going to be invested into the problem. So they are looking for market solutions. They're obviously committed to providing policy settings that don't distort investment signals. So that's -- I think that's really good news. But as a result, we need to get on with it. And I am reasonably hopeful in the not-too-distant future, we will see some investment decisions taken that will give us a bit more confidence that we can manage through this transition in a way that enhances the system's overall effectiveness in terms of the energy trilemma affordability, sustainability and reliability. They are the 3 factors we must not lose traction on. Now I think as part of the solution, it's looking more and more compelling that LNG import could be a way through this. It provides a relatively cost-effective firming solution for the electricity sector. It's unlikely to displace domestic gas and sort of baseload type functions. But from an electricity [ firmings ] perspective that might dovetail quite nicely. Now I am not the expert, neither any of my team. We're trying to learn a bit more about it, but we do have some experts in the room. John Kidd and Alan Young from Enerlytica, are doing quite a lot of work on this for that security response group. So I'd invite you to have a chat with them because it's -- it looks reasonably compelling as an option for our country. And it can work and sympathy with or dovetail quite nicely into the domestic-gas system that we have. And Mark also touched on it. But I think also the demand response agreement we've struck with NZAS is groundbreaking. And it shows the future, I think, of how we can attract demand to work more in sympathy with the electricity sector and get an efficient -- a more efficient outcome as a result. So that's all fantastic. I think in summary, we're blessed with the world-class electricity system in this country. We've got a sound market basis for operating it. And if we allow that market to operate that will facilitate new renewable investment and decarbonization overall. So the future looks positive, but there will be some bumps along the way. And -- but I think we're more than up to managing it. So from our perspective and in that context, we feel our strategy has become super, super clear. And we've articulated it on this one page document. But in the way we describe our strategy at overarching level was an all-encompassing focus on climate action. We've got 4 strategic pillars that the team will drill into through the course of today. And unpack our way. But at its essence, Meridian has committed absolutely to developing our renewable generation pipeline, in a way that we can do our share of the heavy lifting in terms of the energy transition in this country. We are absolutely committed to providing energy solutions and products that support our customers to decarbonize and in doing so, we're confident that we can save the money on their overall energy bills that has to be in the outcome. And there's another facet or feature of this strategy that hasn't been called out as strongly in the past, but it's around flexibility. I mean, flex and flexible supplies flexible demand. It's always been important in the sector. But as we introduce more and more intermittent generation, it becomes everything. And I think our ability to exceed expectations and certainly -- in and out in the competitive parts of the market that we operate. We'll be down to our ability to extract every ounce of flex and into generation customer assets. We've got a really sound base in terms of Meridian's existing generation and storage assets. But you'll hear us talk a lot more about our desire to improve those and deliver and develop new sources of flexibility. It's quite key to our strategy going forward. At the back of this pack, if you read that far -- forward, there are some targets against all of these strategic pillars. I'm going to drill into one on the next page, but the team will actually cover those off through the course of the day. But also, it will be the frame for which you can expect to hear us talk about what we're doing, why we're doing it, and how we can measure our success going forward. . And the other cool thing about this particular diagram, and it's the first time you've probably seen it, but it resonates really well with our people. It's a really quite concise simple way of explaining what we're doing and more importantly, why we're doing it. And part of the art of leading any large organization is getting your team of people all rowing in the same direction and only working on the things that really, really matter. So we found this way of articulating what we're about has gone down particularly well. And it's certainly helping us deliver on the things that matter for our business and our customers. So that's pretty cool. The little area I was going to drill down on is the industrial decarbonization process heat. We got going on that as a result of the NZAS mitigation strategy, but we've got a lot more legs into this initiative. Going forward, we've delivered about 116 gigawatt hours of new demand. There's another 234 currently in the process of coming online sometime next year. We've got about another 350, I think it is an MOUs. It's fair to say that the process -- the progress hasn't been as fast as we would have ideally liked. The initial target was about 600 gigawatt hours by 2024 -- '25. We won't quite get there, but we've certainly got traction, and we think the opportunity is far greater than that. So we're targeting about 1,000 gigawatt hours of new demand growth by 2030. We think that's well possible. Things have slowed down with the GIDI fund being taken over circulation plus a pretty anemic ETS pricing at the moment isn't helping. But the long-term fundamentals are still super, super strong. And the opportunity is potentially probably 10% to 20% of current system demand. Rory will drill down into that a bit more later. But it's certainly an area that we're not taking our foot off the accelerator at all despite the fact that we started for a different reason. I was going to touch on some of our successes since the last time we talked -- and we talked in one of these forums in 2021. And we thought to start with -- in terms of our -- an update on our most recent generation large development projects, the easiest way to talk about it or demonstrate it was to actually take you there. [Presentation]

So when Owen Hackston won his third Investor Relations of the Year -- Investor Relations Manager of the Year award, we thought he might be at peak Investor Relations. But you see all this video content, taking it to a new level. Anyway, nice videos, right? But the key message I wanted to leave you with is, we have an incredibly capable and experienced development team. And despite all the setbacks on the Harapaki project, they still delivered it, all 550 gigawatt hours of wind energy to the system for a $70 per megawatt hour levelized cost. It's a pretty outstanding effort at the end of the day. And we're very, very proud of them and what they've achieved. And probably, most importantly, they delivered it on time. And given the current market context and what we're seeing in wholesale prices, that will improve the return on investment for that project quite markedly. Also likewise, with Ruakaka, we've got going with that one before we actually had the finalized design and commercial arrangements in place, but time is of the essence because we need that sort of firming capacity into the system. The team have managed quite a lot of variability through the process, but they will deliver, again, on time and within our $186 million budget by the end of this year. So when we set out to do something, we do, do it, we deliver it. And we've got great capability in that regard. Further looking back, and I wasn't going to talk to the slide in any sort of detail. I would point out this is largely the plan we had in place from 2021. When we were dealing with the fallout from the Rio Tinto decision at that time. And when we look back, we've delivered everything, I think we said we would plus some. So we're quite proud of that achievement. Obviously, NZAS was a key factor and the plan at that stage, a lot of affected around our mitigation efforts. But the cool thing about that is -- and I've said this before, so this bit would be the last time I say it. A lot of those mitigation strategies have actually become embedded in our business and delivering a source of long-term value for our company. So -- and I'm talking the significant growth we achieved in retail in the last few years, the deployment of the battery at Ruakaka process heat. These are all things that weren't part of our strategy until we actually had to get going with them. So I would thank Chris for creating a burning platform at the time because I think every business needs a burning platform to be honest, from time to time to sharpen up our game, and that's -- it's worked out well. Also as part of this, we exited Australia in 2022 that strengthened the balance sheet to enable us to deploy a development pipeline that's now capable of a size to effectively double the size of this business in the next 20, 25 years. So we're well positioned based on what we've been up to, what you can expect to see. Looking forward, there's a lot of emphasis on delivering that renewable development pipeline. We've got to get a few more things through the consent process through to [ FID ] and then into the construction phase. But with the certainty that we talked about with the Rio decision, we've now got the pathway to get on and invest and the sector needs it to because the current wholesale prices that we're seeing are not sustainable, not particularly healthy. So we do need further investment, and we need it relatively quickly. I don't think there's a risk of overbuild at this point because we're coming from -- we're probably not at the run rate where we need to be right now. We will also put a lot of emphasis on hitting our customer targets. And in terms of the sort of product solutions that we're looking at achieving as well as our commitment to hardship managing customers and hardship, we've got some really ambitious plans and targets around that. We've made some really strong gains. We're currently helping close to 1,000 customers who are generally in energy poverty, and we're making a difference. And it's something that the team are immensely proud of and they're doing a fantastic job, and you can expect to hear a lot more from Meridian about what we do in that regard. And also, we're investing a lot in the core business, and you'll hear [indiscernible] talk about our need to get more flexibility, more flexible -- more megawatts, full stock, but more flexible megawatts as well out of the existing business and obviously continuing to reinforce the strong culture that we've developed within the business around sustainability, safety and innovative leadership. So there's a lot to bid that got on with because a few people were asking me what's next to me last night, while I still have a full [indiscernible] of really challenging cool stuff to drive in this business and the future looks really, really promising. So just a great time to be in the sector. Lastly, before I move on, I was just going to touch on demand. I mean, when we look at that chart at the top, we've had 6 months now of sustained demand growth. So it does look at one level, like we've maybe turned the corner on the flat demand. It's been a feature of our sector now for 15-odd years. It's not probably that clear cut to be honest because when you overlay, which is the little green lines, the green squiggly line going down, that's the climatic factors. So for example, in May, we had a 6% lift in electricity demand in the country, but we also had the coldest May in 15 years. So that there will be some offsetting factor there. But when we look at it, the fundamentals are still super strong. The country needs to decarbonize electricities will form part of that. If I'm right, and we can sell our capability to the rest of the world and stop the silly little conversation about rationing energy. We should actually extract as much energy out of our renewable resources as we can. Then the growth opportunity will be in excess of 70% over the sort of next 25, 30 years. If we can't, it's probably in that 50% to 70% mark, but it's still really significant and far more significant than we're currently developing the current run rate we're on. So I guess, to round out the key point is the industry has started and needs to continue to build and execute renewable generation that will meet the impending retirement of our existing thermal fleet that will meet the repowering of the existing renewables. Some of the early wind farms are coming up for that now, and it will have to meet a significant amount of growth. So as I say, awesome time to be part of the sector. We're very privileged to be leading this company at this moment in time. And yes, the future looks fantastic. That's me. I was going to hand over to Chris, but I'm happy to take a few questions if you've got any I lost track of that clock thing on, I don't know. It was telling me I had 6 minutes to go after, I don't even -- Stephen.

Neal, you talked about sort of 50% to 70% demand growth over the next 30 years. I mean we're -- knowing what you know about the pipeline that you have, the deal that you've just signed with NZAS and what's going on in the world, can you share with us where you think your other share of generation will move over the next 30 years? Do you think you'll grow more or less than 50% to 70%?

We're targeting. We're targeting an investment program of about $10 billion. That would be Meridian's share of a likely investment, a generation investment of about $30 billion if we maintain our 30%. Like I say, I think it could be north of that, might be south depending on energy efficiency and how effective we are at deploying rooftop solar and the like. Although when you get into -- Rory will take you through some numbers a little later on. But we've still got some pretty bullish assumptions around deployment of rooftop solar as part of those new renewable generation targets. So it's quite challenging. Another way to put it, and this is just to sort of help fire up the team so they can get your head around what $10 billion looks like. It's about 20 Harapaki wind farms in the next sort of 26 years. So we need to be building out a big one every year in a bit. And unfortunately, in December, we won't have one of those yellow bulldozers moving around on any of our sites. I'm looking at guy at the moment because we need to keep the machinery going to get the run rate up. Right. I think on that then. I think you're next up, Chris.

Okay. So for those who don't know me, I'm Chris Blenkiron. And congratulations to Mark. He got my last name right, which is the first time in history anyone's ever said that right first pop, thanks, Mark. He's probably off doing other stuff. So I'll give you an overview of NZAS. I don't intend to speak too much in the detail fashion with regards to the deal and the structure of the deals. I think Mike is going to cover a bit on the DR piece, but happy to take some questions. Perhaps I'll just walk you through a little bit more about NZAS, ourselves, and perhaps sort of our story, which I think has been a really pivotal part of the last couple of years to making sure that our story and our position in this country is more broadly known because it's a story that I'm incredibly proud of for those that have heard me talk a little bit before. But again, after that, I'll then open up for a few questions. I guess every business as a version of these numbers and sheets in terms of impacts to [ Aotearoa ] and to Murihiku, the community that we operate in. I'll let them do the talking. But I do want to highlight the first one there, which talks about our people. So round numbers, we've got about 1,000 folks, FTEs and contractors that we employ. And the deal that we've just pulled together, I mean, it's an important deal for the country, it's important for the sector. But I'd be so bold as to say, it's sort of pales in comparison to the importance that it means to those 1,000 folks. It pays their mortgages, it puts their kids through school. And I do want to acknowledge Mike, Neal and Rory in the team that we worked on these contracts on every single meeting that we turned up to. The first question that they posed was, how are the team on site? And I think -- and credit to Contact and Mercury, it was the same question from them. And I think that speaks volumes to the partnership that we go through because these things have human impacts. We can lose that through sort of the numbers and the sheets that we look at. But for me, that meant a lot to every time turn up and talk about the folks. Because you can imagine walk around Tiwai for the last couple of years, the questions that I'll get each and every day about when are we going to know about this and are people fighting for this? So those people mean a hell of a lot to us and similar to what Neal articulated, we don't take that for granted, not 1 day. And so needless to say, a few weeks back when we were able to announce the deals, it was a pretty special day on site. And I think the pubs went all right that night in Southland as well. I was in bed. And as Neal probably points out that economic contribution number probably will go up as of the 1st of July, I would imagine, for obvious reasons. Speaking of our position kind of up and down the module, there's a key point here that I think is worth desperately reinforcing everywhere I go, and that's the importance of Tiwai to the world. Many of you know this, some of you may not, but what this slide articulates is effectively the carbon intensity that exists in the aluminum industry. Each one of those little pigs there represents an aluminum smelter somewhere in the world. And what this demonstrates is the amount of CO2 emissions per tonne of aluminum that's produced. So global average, it's around 12 tonnes of carbon emitted for every 1 tonne of aluminum that's produced. That's the average. Tiwai's emissions profile was 2 tonnes of carbon for every 1 tonne of aluminum produced. And over the last couple of years and perhaps a little further back, that story gets a little bit lost. And I think it's -- for me, devastating that, that sort of story that we should be so incredibly proud of in this country has got a bit lost through the course of the ups and downs of the future or otherwise of Tiwai. That is something that we should all be incredibly proud of. And the position that Tiwai takes in that chain is something that's globally admired and desperately sought after around the world to try and find ways to get the emissions profile of smelting at that kind of level. It's worth pointing out, there is no way commercially viable at the moment to produce primary aluminum with 0 carbon. That development is underway. It's still many years away. So effectively, in my view, you've got 2 options. You demand aluminum, which we all do. Then you can either get it from a high emitting source or one of the best on the planet, which is Tiwai. And so I think that's something, as Neal talked about, as we look at the opportunities in this country, that's something that we should be trying to replicate, not trying to talk about whether it should stay or not. So I'm really proud that we continue to be able to position ourselves like that as we go forward. The other part of this is to get to that edge of the curve that you can see it bending quite considerably at that sort of 10% mark. You do need access to green electrons. So to get to that point, you need to be on renewable electricity. But for us, that's not the only story because I often get asked that around Tiwai, isn't it sort of a free kick and a 50-yard penalty when effectively you've got access to those renewables. And it is a privilege to have those renewables, but it's not the only reason. So you can see here in the early '90s, we were about 4 tonnes of carbon per tonne of aluminum. So our emissions profile was around double to what it is today due to a lot of work done at that time, investment done on technology through the toll beds and reinjecting the fluorides back in the process and it affects a bunch of stuff that we did. We halved their emissions profile down to the 2 tonnes that you see today. So yes, it's about the renewable electrons that we get, but it's also due to the hard mahi and good vision that was taken by the leaders before me, to be able to get to the point that we should be proud of. I put it as a proxy to New Zealand Steel. Many of you would have seen the announcement on the New Zealand Steel project. I think that's a fantastic project. We should encourage as many of those as we can get. They should be celebrated. But in my view, we should also celebrate those that have already done that sort of work in the '90s. And so I just always like to position Tiwai from a global context and at a local context because it is a damn good story. Moving ahead a little bit more locally for us. Our engagement with Ngai Tahu is something that we've worked on for quite some time. It's fair to say we've always had good relationship with Awarua, a local Runaka based up in Bluff. And that relationship has been long-standing and will continue to be. Over the course of the last few years, we've looked to deepen and enhance that partnership with Ngai Tahu more broadly. And that culminated in a series of MOUs that we signed back in October 2022. Effectively, there were 3 MOUs that we signed. One is an overarching relationship MOU, and that talks about how together we can work on what the future can look like. At that stage, it was unknown whether that was an operating smelter or otherwise. Obviously, the answer is known today. But that set, I guess, the pillar to then build on, on how the other projects we want to do going forward with our partners at Ngai Tahu. Beneath that, we have 2 additional MOUs. One is the remediation MOU, and the other one is a community development MOU. To give sort of signals, these aren't just sort of love letters that exist between 2 parties, although they are that, of course. But there's more depth to it. So the remediation MOU, 2 key parts that I highlight is that it's binding and it is not time bound. So this is an enduring partnership for us to codesign the remediation solutions on Tiwai Point. That work has been underway now for a wee while, obviously pre and then post the signing of these agreements. And for absolute clarity, they will continue into the future. What is obviously clear for us now is that, that remediation program exists under an ongoing smelter operation as opposed to a closure operation that would have happened at the end of this year. To let you know how that mechanically pulls itself together. So we have an advisory group that meets once a quarter, equal representation from ourselves and Ngai Tahu, and we talk about the major decisions that we need to be taking in this business as we look ahead. We have a remediation advisory work group that do the work on the ground that feed up into that advisory group each and every quarter. It's something that I'm learning about, and it's a process that's ongoing. They regularly tell me how wrong I get it from time to time. But that's part of the work that we're doing with Ngai Tahu, and it's something that I'm really proud of. One of the trade-offs that I've learned through this process is when you deeply listen and you deeply understand the impacts to the community and the impacts to [indiscernible] their longer-term view, it does take time. So it does take time to listen deeply and flow through that. But for me, it's time, very much well spent for the work we're doing. So that is something that we will continue to do and something that I'm very proud to speak about as we go forward into the future. The final one, I think, to allow for the bombardment of questions, which I'm sure you're going to get, which have held back because Neal's got one and Mike got none. Around the remediation journey. So again, when we look to unlock the future for NZAS, it was very clear, Neal's spoken regularly about sort of the 4 tenants that underpinned the Meridian team and what they were looking for in this agreement, and they were rock-solid all the way through on those 4 tenants. Needless to say, the Contact and Mercury had a similar view. One of those was our absolute commitment to remediation, and it was a very easy tenant to agree to because it was one of our tenants as well. And I think it's always important. You can't change the past, but you've got to front up and then you've got to put some runs on the board and put delivery against that. And so really pleasing to be able to stand here a couple of years through, at least in my time on this to talk about some of the runs that we have got on the board. I'll let the slide do the talking. But the Ouvea Premix is something that we were too slow to act on, but to sit here today and say there is no Ouvea Premix stored in the community. It was all brought back to site and subsequently exported around the world to be processed in things like the concrete industry. And by the way, we achieved that over a year ahead of our schedule. That was an important pillar for us to say to the community that we're serious about this, and we want to be privileged. We are privileged to operate in the community. You can see that the middle photo there is a bunch of smiling folks. That was the last sheet getting cleared out. And I can tell you the sense of pride perhaps at a smaller degree, but the pub's also got to work out, I think, in South on that evening. Looking ahead, this year, we've recommenced the SCL export through to Australia. The delay on that was accessing something called a Basel permit. For those who know, we thought that a Basel permit would be longer to access to send this material through to Spain because it passes through about 8 ports, which you need a permit for each port that it goes through. It turns out that was quicker to access then to access it into Australia, which is just go straight across. We didn't anticipate that, but nevertheless here we are. That process will continue. So we have a contract for 20,000 tonnes of that SCL into Australia each year. For clarity, that then gets processed at a facility via Tomago smelter in a similar way that will then get consumed into industrial processes post that time. So a lot of runs that we've taken to get on the board and if you stay kind of concluding with Tiwai, the story will continue as we go forward because this commitment to remediation is absolutely rock solid. It will take time. We'll continue to work with our partners, but we're absolutely committed to it. So I gave you absolutely nothing about the power deals. I'll leave that over to Mike and the various power folks. But I'm happy now to take questions that you'd like. It's my job to say. Shoot.

Steve Hudson, from Macquarie. Firstly, congratulations on your part in the deal and your teams. The [ SEE ] allocation that you'll receive as part of the deal, can you give us an idea of when you're expecting to hear from government on that? The second question around sort of long-term future of future aluminum prices, are you more excited about carbon being built into metals prices? Or are you more excited about sort of Russian aluminum being banned, I suppose, would be my second question. And thirdly, just Potline 4 as well time frame for that one.

You covered some ground. Excitement on Russian aluminum is probably not words I've put together. But I think on your first question on the Scope 2. So the process that we go through with that, we have to have contracts that are live in market. Speaking with the minister is very crystal clear on that topic. To get a determination, we have to have contracts that are live. Obviously, that will happen shortly. And once that occurs, then they'll be gazetted, the MfE will then go through a process to understand some of the detail that sits in those contracts. That will form information that goes up to the minister to provide a determination. In terms of time lines, mate, I'm not entirely clear. If I look at historical context, it's usually a few months post signing the agreement. So going off, nothing but my gut feel would be similar to that. Perhaps for context, for those uninitiated, the emissions intensive, trade-exposed businesses, all businesses in New Zealand that qualify for that kit and EAF allocation, I think it's 0.537 currently. Due to the nature of our contracts, we get a specific process that's applied to them and the minister makes a determination. So that process will run through. Your second question in terms of excitement between sort of cost of carbon getting embodied in aluminum versus sort of Russian metal, et cetera. I think for us, as we look forward out on the markets and Neal sort of articulated this, the change in the last 4 years, there is an absolute push on the energy transition for renewables to be stood up and to move away from thermal generation. We see that playing its role in the aluminum industry going forward. That's what we look at as we look ahead. Things like green premiums and that begin to emerge a little bit more ready in the market. But to be frank, we probably see it more as a ticket to the game as you push into the 20s -- into the 2040s. And that is something that, if you look at the graph that I put up earlier, having Tiwai at the stage that it's at now, we see that having strong value as it goes into the future. Third one is line 4. I said to Neal this morning, it took us a fair a bit of time to get the 3 lines done up on the 572 mix. We certainly explored the option for 622. We quickly kind of focused in on getting the 572 stack done. As Neal and Mark articulated, it wasn't the easiest processes to get to that point. But we're very open now to exploring another 50 megawatts. We need another 50 megawatts to run full operation. We're very open to exploring options that might exist there. I'm keen to have a little break in between kind of conversations there, but nevertheless, open to conversations across the market on that.

Chris, hopefully, a simple question. The first 3 potlines, older process technology. Are you expecting to use those all the way through for the next 20 years? Or are there options you're exploring to modernize those?

The shortest answer is, yes, we intend to run the P69. So the 3 lines of P69 technology, they are ones that we know how to run very well. So we have no expectation to change those as we go forward. Probably something to highlight because the natural follow-up question for those that know is things like our [ Elysis ] technology, that's under development in Canada, which is inert anode. So that's still got some way to go for that to be commercialized and then to be a viable option as we look forward, but there's a natural correlation where Rio has a firm commitment for net 0 by 2050 as does New Zealand. So the alignment that sits between that is obvious. So for Tiwai to be operating, I guess, beyond these contracts, you need to start looking at that kind of investment profile. But I'm assuming that's the next [indiscernible] that Chris is after that. There's still some time to go on that. But in terms of the short answer, yes, continue on the capital. I thought I'd answer a question you didn't ask, just kind of get in front of the...

Sorry, I'll be greedy, and love one more, Chris. Can you give us your take on Sumitomo's decision to exit? And if you can tie that into there or what we understand to be their offtake arrangement on your high-purity lines, does that change anything there and tie that into sort of the 185 demand response as well? Do we read anything into how you're going to operate the plant going forward? Whether or not there's any change to your high purity output as a result of the DR?

You certainly weave some questions together. So in terms of Sumi's exit, it's sort of a little bit [indiscernible] Sumitomo -- reversion of Sumitomo have been in from day 1. They've been a fantastic JV partner for us for a long, long time. And so their decision to exit is, to be honest, a question for them. But I think it's just strategically looking at their portfolio and making the decisions that are right for them. You would have seen as part of that, there was -- they had a small stake in our Boyne smelter up in Queensland, which was as part of that. So to be honest, beyond that is probably a question for the Sumi guys. I'm not sure that they're kind of walking around, waiting around for the question, but that's probably where that sits. I think probably just the converse of that, sometimes you could ask the question in aluminum with Rio Tinto has been sort of the ups and downs. I think committing to a 20-year contract and then going all in on 100% ownership of the smelter subject to getting the regulatory approvals gives a pretty clear indication of where Rio sees aluminum in the portfolio going forward, which is fantastic certainty for the team on site and lots of clarity as we go forward. In terms of the offtake agreement, so Sumi continue the option to be able to kind of access the metal and sell into the markets. We'll continue to work with customers as they demand the metal is probably the easiest way to answer that. But in terms of what's in the actual agreements, to be honest, I'm not across, and I don't really need to be to a certain degree. And then I think your question, tell me if I've got this wrong, is in relation to the DR agreements, how does that impact our ability to make ultra-high purity, is that -- got the question. So the short answer is, I mean, the reality is when you ramp up to those sorts of levels, I mean, it's not pain free in the operation. So it does have an impact on the amount of metal that we can make. But the modeling that we've done would demonstrate that we aim to always protect the ultra-high purity that we make. It potentially would have an impact on some of the other product mixes, depending kind of time of call, demand profile, et cetera. A lot of times, we do cast a hit on some metals. So it sort of depends as you go forward on when the calls come and the like, but the whole system is modeled on aiming to protect the ultra-high purity that we capture out of line 3 in particular. So the intention is that, that remains as per.

running about 10 minutes. And I thought we're running about 10 minutes ahead of time, I thought we might take advantage of that, just recommence at 11:00. Work a bit of time towards the end of the day. So back in the room at 11. For those online, back online 11. Thank you. [Break]

I don't know whether we're back on or not, but I'm sure I'll get the word from somebody. There we go. It's Chris still here. Is Chris -- there he is, at the back. It's incredibly refreshing to, one, have you standing with us talking about the transaction. But also, what you heard from Chris, I think, was a demonstration of the change in culture at the business and that was -- you heard it from Neal, you'll hear it from others, and we'll talk to it a lot, as you need people working together to deliver big outcomes, whether it's for each other or for the country. And you saw what Chris bought to the table in the way that he communicated and the things that were super important to him through his presentation. And we wouldn't have closed, we wouldn't have completed without that capability that can do. And if I'm totally honest, we haven't seen that from Rio Tinto historically. So there is a culture change underway within the business that I think went a long way to delivering kind of what I'm about to talk to a little bit. But before I get there, E te Iwi, rau rangatira ma, [Foreign Language] Ki a koutou, tend tatou katoa. And that's just a big welcome to everyone today. It's not easy to, for everyone to get here. You are esteemed guests I love, and it's nice to be back. Neal said it, we haven't done this for 3 years. So it is nice to be back talking to people who -- it's through you and the investments that you make in our business that allow us to have the success that we do. So it is really nice to share a couple of days and to lay out the things that we're going to do in our business, and that's going to come. I think what I heard from Mark and Neal was you've got a business that has a purpose that's at the heart of what our country needs to do, which is to adjust our economy and transition it to a low-carbon future. And we're at the heart of that. And you heard the same thing from Chris, and I think these deals reflect the fact that the Tiwai Point aluminum smelter wants to play a central role in that transition as well. You're going to hear from Lisa and Guy, Rebecca, Tans, about what we're going to do in our business to actually move ourselves forward and support that transition. And then Rory is going to talk to what could be the most important session of the day, is how we view the future at least kind of the conversations that we've had outside the room. So no pressure, Rory. But that could be more important than what I'm going to talk to. The -- because what I'm going to talk to, I'm going to talk to a couple of examples of demand response and primarily how it supports that transition, right? So why is that component of the transaction so important to us and so important to New Zealand because I think it's the future. It was a key part of the conversation that we had, the negotiations that we had with Rio, because we believe that demand response is the future in our market. And the scale and tenor that this transaction brings, I don't think it's replicable, I think, we'll adjust over time. I think it's the start of the relationship, and we'll learn some stuff, and we'll make some adjustments. But the point is, it's a massive start, right? It's material to us, it's material to the way the smelter operates, but it's material and then it supports energy security, right? And so you have a change in the approach that we take to helping manage energy security, whereas historically, we've entered into swaptions with fossil fuel businesses to provide the same assurance for energy security. We're moving, and this agreement is the first of many that will see us move further to use and work with consumers to provide that energy security. So I don't think we can talk to enough, but I'm going to get to [ preso ] because I can see that timer counting down. And it is important because I know it's a bit of -- the hardest agreement to read is actually the demand response agreement as well. I don't know if anyone's actually had a look at the contract. So I've got a couple of examples in there that I do want to get to and hopefully that shines a little light on the way that it works. So maybe I'll get on to the -- I'm not really going to talk to the base agreement even though there's a lot on the base agreement here, is other than to say, the pricing framework, it's sustainable. The term provides the certainty that we have all talked to. We've all talked to that certainty. The volumes for us, I think, gets and might we haven't talked to this. The volumes for us are materially smaller than they've been in the past. And that's important given the commitments we've made to Lisa and the retail -- our retail customers. And then the certainty that we have around completion of the transaction through credentials is higher than we've had in the past. And the one thing I wanted to signal is, because the agreements like are so straightforward is the only piece I want to signal was force majeure. And force majeure is important to us, but all those words say and all the contracts, is if something happens that we didn't expect, that's outside of either our controls and it affects our business in some way that's meaningful. We've kind of got some thresholds and percentages in here. But if something happens along the way, that means our businesses are interrupted, then we need to adjust the commitments to each other. And if that happens for long enough, so one of us is impacted for long enough, then it might mean that we need to terminate the overall arrangement, right? That's what force majeure does in every contract. And you can look at the language and get into the technical detail. I hope it never happens. I think that would be the hope of the both of us. But it is important, given the term of the transaction. The demand response, I've got a bit of boilerplate on this slide for demand response that confirms, I think, what we talked to at our initial investor call is, there are four options return for providing us with the four options, the smelter is rightly going to get paid for providing that optionality, and they'll get paid if we do exercise an option as well, just like we had, in fact, in many ways, similar to the agreement that we have with Genesis historically. So -- but the important piece, and I mentioned it before, is the agreement should facilitate or incent reductions in consumption, because that's what we need to manage energy security, and that's what we need to help decarbonize the economy and manage the transition that we've got in front of us. And I want to spend as much time on the examples, so I'm going to jump to Slide 26 on here in a sec. But this table we built for you. So hopefully, it's helpful, because if it's not, we wasted a bit of time doing it. But the reason we thought it was helpful is give people a bit of a cheat sheet as to how the provisions in the agreement worked was, if you start from kind of left to right in terms of the columns, you go, you expect that sort of physical reduction in the first column. That means reduction in contract quantity in the second column. We've got to provide notice to the smelter in column 3. There are maximum periods over which we can call for each option. There's ramp-down period. So how long does it take to put the option and play and then there's ramp-up periods, how long does it take to come out of the option and back to base contract quantities. So that's the idea of it. And the idea was to remove some of the contract language that as I've already talked is reasonably complex in the agreement. And I'll refer to it as I go through my examples, but this is example number one. It's a really simple example, and I hope that comes across. But in order to exercise Option 1, we need to give a smelter 3 days' notice of the intent to exercise it. At the time that we exercise the option, we also need to give them the period over which we want to exercise the options. That's known as the DR period. And as you can see in this example is, we give the smelter notice that we would like to exercise the option for 150 days in the call. And having done that, as shown on the graph, the volume ramps down for those 5 days. It holds at 352 -- 358.25 megawatts, so it drops from 377 to 358.25 megawatts for the entirety of the DR period. So for the 150 days. And at the end of that period, it starts ramping up over the next 15 days, and we end up back with a base contract quantity of 377 megawatts. We can reduce the contract, the DR period, if we want to. So if we want to shorten the notice, then we give the smelter 3 business days that we would like to reduce the period, after which the ramp-up period begins and same thing, it ramps up over 15 days. So there's a bit of flexibility after having made the first call and the way that the contract works. So hopefully, are super straightforward and consistent with that table that I mentioned. The second example, it might be more useful in that, it starts to show some of the flexibility in the contract. And in this example, we've called Option 1 as per the previous example, but partway through the DR periods, things -- our position has changed, and we decide we need to exercise one of the bigger options. In this case, it's Option 3. So in this example, 20 days into the DR period for Option 1, we provide notice to the smelter that we'd like to exercise Option 3 and having received that on day 24, as you can see in here, the contract quantity starts reducing from the 358.25 megawatts that I mentioned down to 302 megawatts over a 15-day period. Again, the 15-day period comes from that little table on, I think it was Slide 24. It will hold at the period for as long as we've made the request. Now the interesting thing about the call period that we've got for Option 3 in this example is it can't be for longer than the period of the option that you had previously called. So that was 150 days. But we're at day 20 of that call. So we can't call for the 450 days and the maximum call period for Option 3 is 137 days. So when you put that all together, it means that if we called Option 3, 20 days into an Option 1 call, we would be able to exercise Option 3 for a maximum DR period of 114 days. And that's what we do in this example, is we make an exercise of Option 3, 20 days in, 3 days after we provide that notice, we ran back to 302 megawatts. That holds for 114 days and then the contract quantity starts ramping back up over a longer period of time. In fact, that's 100 days in this option to get us back to 377 megawatts. One thing I don't talk to here and is important in the contractors, each option has a standdown period. So after you've exercised 1 option, there is a standdown period between which you can exercise that option or subsequent options. And you can see that in the graph here, which is after we've completed that ramp-up, and we're back at 377 megawatts. This is a 60-day standdown period before you can exercise Option 1 or 2, and there's a 270-day period before -- between which you can exercise Option 3 or Option 4 again. So standdown periods, while I'm not going to try and present an example and show you the relationship between them, is now that in the contract, standdown period sit there. They are actually one of the, I think, easier elements to read in the contract, but they are important. Of course, at any time through the exercise that Option 3 we can provide notice that we want to shorten the DR period. And at that point, the contract quantity would start ramping up again to 377 megawatts. Now I'm going to go to something that's not -- it's not an example, but we had a -- so as, as we're negotiating for the 2.5 years or so probably, give or take, we weren't able to talk to our traders because they were trading ASX every day, and they would have become insiders in terms of the information they had in making those trades on assets. We have an information barrier in place across our business, which is very, very tough to do, right? So our traders had 0 insight into what we were negotiating on their behalf. And we had no ability to talk to them about what we were doing. So when we completed and the traders got the contract information, they very quickly built their own set of models that thankfully confirmed that what we did for them was tremendous. So it was what we hope to have done but what they did is they started running these optimization models like traders do. They're very capable analytically. And this is just one of the optimization. So it's just an example of how you might use the agreement. I'm not doing it to scare Chris, right? Because the team -- there's some stuff to get used to, down the smelter and -- but what this is, is just an example of how you could exercise options over a 5-year period to maximize the core volumes that we have requested. And that little tool set is improving every day, and they're doing what they do, which is how can we use this agreement to fit into our portfolio. So even the point here is, even with the standdown periods that are captured in the agreement, there is a lot of optionality that sits in here as long as it's a large volume of gigawatt hours over an extended period that will help us manage our hydro variability. And I wasn't going to talk too much to this slide, particularly as I've only got 3 minutes left, and I know there will be some questions. But it's a bit more boilerplate. These are the elements that I thought you might find interesting in the agreement. The good thing is, I know everybody can read. So I'm not going to go into this in too much detail as -- but the concept of demand response premium adjusting subject to actual performance and our ability to pause calls in the contract, so calls that have started to ramp up. So you're removing the call you've made. We might want to pause them if our portfolio shifts and changes through that period as well. So we've got the capacity to pause. So there are a couple of additional elements that sit in that agreement that are useful and important to know. But as I say, I'll let you read the words and take some questions. Nev?

A quick one for me. Do you think there's any chance that anyone will be able to look at the bid and offer stack and say, okay, here's how that demand response option appears in the stack and think about pricing from a market perspective, so other participants can see that pricing? Or will it sort of be, no doubt you'll notify the market when you exercise, but the market has to sort of work out for itself when those might come into play.

Right, two answers to that question, I think is, I find that you guys are very good at working out what the pricing looks like. And I think as soon as we say, we're not -- we don't mean to give anything away. But as soon as I say, it's very similar to the arrangement that we have with Genesis, as everyone jumps to the same sort of premiums and same sorts of strikes. And so I think from your analytical base, I don't think you're ever too far away from the truth. Somehow I don't know if it will show up in the bid offer stack, Nev, because what the traders will do is, how it's adjusting the contract quantity is they'll see that reduction. And so what it will do is it will affect the levels of generation offer into the market to help us conserve hydro energy. So it probably won't show up as an instrument, as you might expect. It will sit behind the trading platform and the portfolio management that operates in the business. But as I say, somehow some way that price visibility emerges through the work that you do any way.

Do you think we might see that in future contracts?

I don't know if we can answer, I don't think we will replicate this contract. As I say, I think this is a...

I guess that's why I ask, maybe future contracts will have -- this one is a special case, the difficulty of moving sort of loaded smelter.

It's real, I mean it's, -- and the reason I said that is, one, I think it's phenomenal. But I think this contract is phenomenal for us. I think it's phenomenal. It cements the place of the smelter in the market because it can't be replicated. So this for long term is, I feel very good about strategically how it positions us in the smelter in the energy sector. I don't think that can be replicated. But for the smaller arrangements, I don't know. I don't see that, again, you might see some form of aggregators pricing dynamic. But as Lisa goes out and starts offering it to customers, that will get out to people. And it is important that people know that they will get paid for providing a service, and that should offset the loss of revenue that they were receiving for making whatever it was goods and services. And so I think word of mouth will get there even if the transparency of contract release doesn't quite meet that level of transparency that I think you're after. But...

If I just think about the heat conversions you've been working on, yeah, that Neal talked to earlier. Those will have some kind of demand response or some kind of flexibility builds into them. Are we going to see kind of what general form those take?

Nev, it's a good question. I don't know whether we've thought about it that directly as it might be that Lisa has got a better answer by the time she gets up here. But it is -- I mean, what you are seeing from us beyond the pricing is we see each of these elements. The reason we like industrial conversion as we know that we can add demand response to it. And that addition to -- of demand response, as Neal said earlier is everything that we see is starting to float around flexibility and storage. And while we start from a good starting place, good is never good enough. And so you need to execute into that market. So we can add to the flexibility that this agreement offers. But I don't know, I'm going to toss a hospital, pass to Lisa, a few minutes to see whether -- it's not one we've thought about, Nev, I don't think we've thought about that directly, but it's a great question because you need some form of transparency so that a market actually forms around these products and that people know that they're reasonably getting paid.

Sorry, two quick ones. With contact having about 25% of this DRP, what do you guys have to disclose to them before you pull the trigger? Is there any consultation with them?

No. So nothing at all.

So they'll only know once it's pulled that they've now got the demand response component kicking in?

That's correct. Yes. So as we provide notification to the market that we've exercised the demand response tranche market and contact, we'll find out that's what's played out.

And then, so this is 140 megawatts for you. How much grace does it give you? What sort of time before you've got to find further capacity support seeming you guys are against using coal in Huntly?

You heard Neal talk to gas. And so we're playing a reasonable role in the industry forum that's looking at how we can better incorporate and support the gas industry. And our role in that largely will be to take options or swaptions to support new investment in that sector. My pick, given the rate of decay is that will happen a bit faster than we might otherwise expect. So we've been quite open that we do need additional flexibility and flexible products and we've said we're open to long-term agreements just like this one to support that investment. And we'll work through parties who might be able to provide that solution whether it would be LNG or use of existing storage and fields probably through the rest of this year, I'd say, Grant.

So it gives you 2 to 3 years of grace before something has to happen.

Yes. All of our analysis, again, I'll punt this one to Rory. I don't know whether he's going to talk to a gas market client. He's nodding his head in the back, but all of our analysis is that the real junction from a gas market perspective is 23rd of 2035. That's where it really, so your point about 2, 3 years to get this in order feels about right. But the one thing you know about forecasting future outcomes is you're going to be wrong. So it would be nice to have that certainty earlier than 2 to 3 years' time so that everybody has got that confidence in investing. It feels like I'm done. Who got next?

[Foreign Language] Lisa Hannifin. So I think I met most people last night, but I'm the Chief Customer Officer at Meridian and that means I lead our retail business with our 2 brands, Meridian and Powershop. So I thought I'd start off by just talking about where we've got to today and then we'll talk a bit more about the future. So Meridian Retail has experienced really significant growth over the last 6 years and what's been really challenging and quite uncertain environment for us. So in regards to our customer growth or ICPs, we've had 25% growth and all our customer connections, and that's right across our market segments. But by far and away, we've chosen to deliberately grow in the C&I sector, which is our biggest part of our business. And we've had real success there from that continued focus on operational excellence and as a result of that really great customer satisfaction. The second part of that is obviously our volume growth. We've had 55% growth in volume, again from all of our segments. But again, our largest contributor is in the C&I market. And that's, again, because of those really long-term relationships. One of the greatest things there is that a key part of that is really extending out the length of those contracts with those big customers at the top end. And at the moment, we're on about 50, an average about 57 months for those contracts. And lastly, netback growth. So that customer and volume growth hasn't come at the expense of profitability. We've seen a 47% increase in netback since 2018. So things driving that revenue management, cost control, being able to leverage those higher C&I prices while wholesale prices have been high and again, extending those contracts. So we've got a real track record of performance. You're in very safe hands. We're very experienced, and that's what sets us up really well for our future. So globally, what we know is that emerging technologies and expectations are really rapidly changing the energy environment. And there's really three macro trends there. One is obviously decarbonization driving growth in demand. The second one is around the convergence of data and technology meaning that now retailers have the opportunity to engage behind and in front of the meter, and that's allowing us to have a much more balanced relationship with our customers. And the last one is around digitization. So customers are really expecting to have a seamless digital experience to everything that they engage with and energy is no way exempt from that. So what we know is, change is already here. The first iteration of the transition is underway, and I think we've seen that with some of those demand graphs and Meridian is really well placed to adapt and continue to deliver those really strong results. And those -- so those macro trends really align well with not just our track record to date, but also our evolved strategy. So future retail is going to be driven by us having a really strong generation wholesale position, but also the seamless integration of really complex suite of products. So the first one is the customer demand is changing. So we're going from simply reading a meter, sending a bill with a fixed variable volume tariff to a much more complex and highly electrified homes and lifestyles of our customers. And therefore, they're demanding much more sophisticated energy solutions. So the energy market is adapting, and that's enabling this customer demand. So there's a shift from the traditional to the complex and a shift from one-way power flow. So just one way we're shooting it down the line to them to a much more bidirectional. So they are us being able to buy it back from them. So the smelter is at the very highest end, the demand response, but we're starting to see that show up for our mass market customers as well. And so I think that's enabled an opportunity to really grow value. There's a shift from just retail excellence, where value just came from just continuous improvement in what we're doing today to new markets -- new opportunities in the market that are developing where customers have their own unique energy requirements, and they want a much more personalized offer. So we think there's real opportunity to extract value from this new energy system. So last year, we engaged McKinsey to review our retail strategy and in particular, a key part of that, which was around our energy innovation strategy. And they also came with us on a Board trip so we could go and see what others were doing in other jurisdictions. And an output of that work is this table here, which shows the new value pools that they would see emerging and that they have the potential to deliver $100 million of EBITDAF to Meridian by 2030 and you can see there that the largest pools are in electrifying transport and demand response. So that was really good. It really validated our approach and it's guided us in the evolution of our retail road map. So we're really confident that demand for our propositions is today and will grow, and we're building a new business that's prepared for that future. So in regards to those new propositions, we think that we're going to be able to drive growth through cleaner and cheaper energy. And you'll see that in our new strategy met, the addition of cheaper as a new and quite different thing in our industry. We think that customers -- they should expect to benefit from the energy transition and Meridian will be able to deliver a value proposition based on that relentless transfer of value to them, and that's what's going to enable us to grow. So Meridian's generation mix and our asset experience are the real building blocks that support the value exchange. And that's going to be very different to that traditional incumbent approach. That electricity cost reduction is going to come as a result of us being a very digital business. And that will enable us to drive down even further our cost to serve and acquisition as well as really unleashing access to those flexibility products that we were talking about earlier, so demand response. And part of that, tour that we did overseas, what we've learned from those developed markets and assessing those other market leaders, in particular, Tiba, which is in the Netherlands, Vattenfall in Europe and Amber in Australia is that, they're more -- they've got a very connected core capability with their customer experience to create these really unique and defensible customer value positions. They've really simplified their capability and experience, and they really trade from their position, and that builds real distance between them and their competitors and makes it very difficult for some incumbents to be able to replicate that. So we sort of took that on Board. And as a result, we've been working on a range of trials to better learn and be prepared for this new environment. So those trials include a VPP that successfully moved 97% of our charging to the cheapest overnight rates, reducing our customers' cost anywhere from about $120 a year to $360 a year. We've done controlled and optimized trials in hot water, business EV charging. We've stood up some home EV charging. Of course, you'll know about our process heat electrification and demand flex actual real-life customers who have that. And in addition to that, we've been building out New Zealand's second largest charging network. So that all means it's very possible for us to find ways to share that value with our customers. And we think that we're really well placed to execute and really capture those market opportunities. We do know that we need to be different as an organization. So next-generation retail is our response to that. And I'll tell you a bit more about that hopefully. We'll see if that fancy graphics work. That's good. So over the last 4 months, it's actually only been 13 weeks since we stood it up, which I just can't believe. We've been piloting a new operating model, which we are calling base camp. And that's supported by a new and different modular technology architecture as well as getting our people to work in a different way. And what that's really doing is preparing for us to move to -- move our whole business to this, what we're calling the next-generation retail business. So there's kind of four parts to that. The first one is around our customers. So I think it's really easy and everybody says, yeah, we're customer first or customer-centric. But for us this time, this is a real genuine reset of our belief that customers will show us the way and we talk about setting the compass on our customers. So we're having our customers at the table when we make decisions. The second one is being digital first. So again, everybody sort of wants to be digital, but being digital-first is something a bit different. So it's really about iterative development. It's not about a one big bang investment, like I think the days of investing in one big platform that's going to solve all your problems well over. And the fundamental driver for us is that technology has got to create value for customers and for Meridian. And to do that, we need technology that's going to enable us to be able to use that data that's available and things like AI to drive commercial outcomes. So that technology is going to be able to support those flexibility products as well as really driving a better customer experience at a much lower cost. The operating model. So the operating model is really about how we get things done at Meridian. And so we're testing a new model which allows us to create products and take them to market at speed, enabling us to compete with those disruptors that we've seen in the market today, but also that we know are possibly coming. So early outcomes of that have just really been outstanding. We've moved from delivering products within months, in fact, within 13 weeks from what used to take us -- I mean, sorry, not for months, for weeks, but that it used to take us a year to stand up. So it's been a great experience in us demonstrating to us that we know that we can make this happen. And the final thing, which I think I actually talked to quite a few people about last night, is about values and behaviors. So there's something quite special at Meridian and our values and behaviors are kind of like the bedrock that those first three things that we want to do are built on. It's about how people tune up and how we work together and how we shape that culture. So the culmination of that base camp work is that it's kind of a forward party. There's about 50 people in it. We took 34 people out of retail along with some contractors, and they're often a sandpit, they're still in the same office, but doing things in a really different way. And we think that, that's going to set us up for the next generation retail business that we need to be. So we're on the journey, and we're learning every day. And so what I wanted to share with you now is new retail strategy. So our previous strategy took us up to 2024. And this is our strategy to take us out to 2028. [Presentation]

It's a fancy little video because we've got all of retail day tomorrow. So we're sharing that to be worth for the exciting graphics. Yes. So if we just talk about that, as I said before, we've set those really strong foundations with a really clear progress -- view on our progress for the next 4 years. So first of all, our purpose is to deliver cleaner, cheaper energy, which is really something quite different. And our retail ambition really focuses on growing retail by finding value in the energy system and then passing that to our customers. And we think that's quite unique in this industry. Our decision to find or create the value and then choose to pass it to our customers, aligns with who we are as a retail business and actually, who we are as a leader in our industry. I think, as I said before, you can't be talking about how fantastic it is to have a transition to a fully renewable system with our customers being able to benefit in that. We think it's quite different and genuine and should be the key to unlocking that trust with customers, which is very hard to do. We've been really successful in doing that with our big business customers. And so what we want to do now is find a way to build that trust with our mass market customers. So we've chosen those 5 key areas, which are our strategic rights to win. And those are the areas where we'll put all of our care and attention and effort. And we think if we win in those areas, then we'll be able to deliver on that regional ambition. So the first one is about creating amazing digital and data customer experiences, giving our customers those really seamless, personalized experiences using digital tools and data and then making sure that we understand them, so we can serve them better. The second one is about Flex, so making Flex valuable for customers. This is just like the biggest opportunity for customers to be able to save money on energy by consuming electricity at those [indiscernible] times of day and night. And we think that we're best placed to develop those Flex solutions that can adapt to the customers' unique needs. So it's not a blunt instrument of like ripple control or one free hour of power. It's personalizing that flexibility to the customer's lifestyle. Then we think there's obviously a future where electric vehicles and sustainable heating solutions are the norm. We're committed to reducing our customers' reliance on fossil fuels. And obviously, our DNA at Meridian is an asset deployment, which means we can leverage those capabilities, we've got in our business to make sure we can deploy those things. We know that the EV uptake has slowed down, which is disappointing, but we know that it's going to shot sooner or later. And so it's really important to build the capability to respond to the market as these new things come on board. We're actually quite asset agnostic. So whether it's solar or EV or time of use from mass market or whatever it might be, what we're really up for, is building the capability to do those things. And then finally, and by far, something that is very, very important is we've always got to look for ways to be more efficient in how we operate because that is one of the key inputs to making energy cheaper for our customers. And the last one is around community goods. So we know being the biggest supplier of energy in New Zealand, we need to take a leadership position in making it fair for people. And so we're really committed to doing community good to make access to energy available to everyone. So we'll keep developing programs to support those in need, ensuring no one's left behind. So we've got an energy wellbeing program for our most vulnerable customers, which is producing real results. And then we've also got a decarbonization fund which is off the back of our renewable energy certificates, which we donate to -- people can apply to, if they want to do decarbonization in the organization, EVs or solar or whatever it might be. So -- and then just finally, along the bottom there, that's all a good story. But we had to keep ourselves honest, we need to think about how we'll know that we're being successful. And so what we're going to see there is that we have significantly grown our residential customer base. We are, by far and away, the largest supplier of retail energy, but we have quite a small number of residential customers compared to our volume. So we think there's a really amazing opportunity to grow that when the time is right. We're going to continue to hit hour next-generation retail milestone. So there are some things that we've signed up for with our Board that we've seen are going to be deliverables and they're around cost to serve and cost to acquire and numbers of customers on these new propositions. And our energy propositions will have to evolve much more than just sending monthly energy bills. So we want to have a big portion of our customers on those new energy products. And finally, we're going to -- or not finally, sticking to last. Our brand is obviously really important. So if people don't know who you are and what you do, then you can't sell anything to them and selling these kind of complex products is quite different than just selling energy. You need to be able to explain it and educate them and they want to personalize so that's quite challenging. And finally and most importantly, we are -- in retail, we're really just about the people, digital and marketing. And so it's really important that we maximize the potential of the people we've got. We need kind of slightly different capability. And that will be a good thing for Meridian, but also for our customers. So I think we've got the right strategy to deliver on our purpose and ambition and guide us to the next generation of our retail business. So just to wrap up, and my whistle's up and I think I'm pretty on time. So we've had that really strong historical performance. We acknowledge that the market and the industry is really changing. What's different about Meridian is that we're finding ways to create value for customers. We know that value exists and that's been validated by the trials we've been doing. We're building agility and flexibility. We're not stuck on any kind of asset class or product. And the value sits in places where Meridian is really well placed to unlock it, specifically in their EV and demand response space. We've rethought our way of working, and we've started towards this next generation of our retail business, and we've adapted our strategy. So we are set up for success. So [indiscernible] that is me. Have you got any questions? Wow. More than you and [indiscernible].

Just with regards to base camp, how does that sit as a new tech stack, tech platform with regards to where Flux is sort of the incumbent and whether you'll just use that as an internal platform or something you look to leverage across other utilities as a tool set And how you thought about development of that with regards to the other solutions already in the market being the Gentrack or Kaluza?

So the technology architecture that we have built for base camp is a modular technology. So effectively, what we found is there's kind of bits of all these platforms that we like and need to create these products. But we don't want not any one platform out there like the Kraken or Kaluza or Gentrack or SAP or Flux, none of them offer all of the things we need to be able to stitch the products to give it to sell to our customers. So the modular technology allows us to take the bits that we want and can figure them ourselves to then offer the customer those products. So Flux is the billing module of that modular architecture, and we're continuing to use that at the moment. And one of the things that we're trying to build is what we call a 2-way door. So this isn't my first rodeo with technology. And we don't ever want to get in a position where we put -- bank all of our money on this one thing, and we're stuck with it. We spend a lot of money on it, and then we can't pivot and change. So we're trying to have in this 2-way door where we're building a modular framework and then we can choose the modules that we want for whatever we want to do in the market.

Just a few questions on Slide, the one where you segment out the $100 million. Slide 34?

Yes.

Can you talk about the CapEx required to one to achieve the $100 million, but with a focus on the EV side to deliver that extra $50-odd million. And is the demand response side, really a digital type solution, so not a lot of CapEx involved in delivering that extra $60 million?

Yes. So there's a few bits to it. One is that value pool there. A lot of it is made up from the premium that you get from public charging. And so we're building a public charging network. The capital isn't like -- match, I don't know if I am allowed to say that, Okay. Yes. So how much have we spent so far? $4 million and we've got 368 charges out there. Admittedly, a lot of them are AC chargers because when we started the technology around DC, wasn't as advanced. So our strategy going forward because we do want to be the biggest charging network by 2028. We'll be DC charging and you can command a premium for that DC charging. So that's where some of the value pool comes from. And the second part is charging in people's homes. So we've stood up a home charging proposition where people can get a home charger from us, which we will install and then they can pay us back either upfront or over time. But what that means is we're getting the increased demand in the home as well as a longer lifetime value from the customer. Yes. And then maybe the other one is -- which is where we're still seeing a lot of demand was just in business charging. So -- and because we've got such a large business customer base, there's a lot of opportunity for us. Are they still motivated because they are often trying to -- their global business is wanting to reduce emission, so they're converting their fleets, the -- we're being providing the charges for them on their properties. We're financing that and then we're getting the extra demand and also the length of the contracts extending. Demand response, I think that was your second question. So for our big customers, no, it's not digitized. But when we talk about demand response and one of the things is the taxonomy. So we talk about flexibility, and we talk about demand response, and they're kind of the same, but not really. But in a mass market sense, that doesn't need to be digitized. Customers don't want to be sitting there thinking about whether they should turn off their heater now because the time is right. We want to be able to manage that and that's using AI algorithm so that we can, for example, charge the EV at the right time of day, buy energy off them when prices are high, charge things when prices are low, and that all has to be digitalized. You can do it now, and we obviously have been doing it with spreadsheets and people in the back end, but you can't have a low cost to serve and not have digital products.

So just to clarify, the demand response is actually a customer relationship of your existing infrastructure with very little CapEx, while EV has a bit of CapEx, but astronomical returns?

I don't know about astronomical returns. I wouldn't like to say it, but good returns, I think. Yes, not much CapEx.

Just wondering if you can talk to cost containment and steering groups and so forth, so often with some of your competitors, you've seen real cost blowouts with this type of kind of bells and whistles retail proposition. So I just want some comfort [indiscernible].

I have also been in the environment, so I know what that's like. I think, yes, even it's -- even surprising for us. So what we've been given at the moment is our Board are really supportive of us trying to do something a little bit different. They have given us some money to get going with base care because we're obviously running existing retail business as it is today, and it's really important that we continue to deliver the value there. So there is some upfront CapEx, but it's in the kind of -- Yes, I can say that. Yes, so it's like $5 million to $10 million upfront. And how it's looking at the moment, never say never -- is that it's not really -- there isn't going to be like a $100 million one-off investment. It's more like the kind of money that we're spending every year anyway because we're actually a digital business that actually sells -- that just happens to sell energy. And so we're always spending money on technology investment. So it's actually pretty minor. And the more you digitize, the less staff you need. So there's -- in retail, most of the costs come from technology and people.

Just got a couple. One, you talked about a material step change in productivity improvement and rolling out new products. I'm just -- could you go perhaps what enabled there? Is it technology? Is it people? Just a little more detail. And then secondly, you sort of stand out from some of your peers around no bundling with other products. Can you perhaps address that as well?

Yes. So we have moved to a more agile way of working. We definitely have not gone agile but we have gone into a more agile way of working. So previously, retail was arranged around functional work. So marketing sales, commercial, whatever it might be. And what would happen is -- and we did have an energy innovation team. But what would happen is, they would want to stand up home charging, then they would have to go to the ICT colleagues and try to get something done and then go to marketing and then go to so and so. So we've set up these cross-functional teams with everything that a team needs to be able to deliver that product. So it's got ICT in it. It's got sales it, marketing, commercial on their own, and we've tried to separate out. We've given them some bandwidth. So instead of having to go through the traditional processes, they can just get on and make things happen, including being able to configure the technology themselves. So we've got developers. We've got architects, we've got testers, we've got security sitting within that team. And so they are very quickly be able to tune things out. Another thing that we've done is, because Meridian is a very -- a business that really prides itself on its excellent delivery and quality. And so people are very nervous to push anything out to customers until it's 100% perfect. So we've sort of tried to embrace this progress over perfection where we stand up something that is a minimum viable product. And then we tested out with some customers normally staff or some [ friendlies ], get some feedback and then we [indiscernible] on there and improve it. And so it's much better than waiting for a year, creating a product and then finding out the customers don't really like it and then starting again. So that's been quite a mind shut. It's probably the thing people have feel the most challenged about. They are used to things being gold-plated because they've had to be, but that's the thing that's different here. And the second question was about the technology, was it? Bundling, yes, well, that's my focus too. So for us, we never say no to anything. So we're always reassessing it. We'll always have another look. But for us, what we see is that for the margins that you can make in those products and for the increased cost to serve and the reduced customer satisfaction, I'm not sure it's worth it. It would be a distraction from what we're trying to do. So -- and also, I don't see that the retention rates are any better than ours. So the theory is that if you bundle these products, you'll get increased share of wallet and you'll get better retention. But actually, our retention rates are best in class, and we're not distracted. We're a pure play, and we're really proud of that. We don't want to do anything different. We just want to be a trusted advisor for people for the energy solutions in their homes. There's 2 more.

We'll also get very quick. Megawatts under orchestration, how many now, would you say, excluding -- it's [indiscernible] and I guess in terms of target in '28? And the same question for cost to serve. So obviously, it sounds like a bit of an investment program here, a bit of an OpEx investment. Can you share cost to serve targets for us?

Significantly lower though, the words I could use. And our experiment to date is -- so one of the things is that we are going back to our Board to validate, we had a cost of serve target that we wanted to hit, and we've been able to hit it. So that's reassuring. So we've got 525 gigawatt hours of contracted processed heat, which is Frontier Open Country Dairy and Mataura Valley Milk, got 300 megawatts of demand fleet contracted, 322 public charges and [indiscernible] charge points.

Just a really quick one then. Just around pricing. I guess the big thing we've got coming up is the big lines charges increase and how you're thinking about managing that from a pricing perspective?

Yes. One of the -- I mean, I think one of the reasons we've been really successful in retail is we're very disciplined about passing through costs, which feels really like that, it's a really hard thing for us to do, but we know that that's the right thing to do from a commercial perspective. What we really want to be able to do is find a way to make our energy cheaper than others by helping them with these energy solutions. So overall, if we can help people -- that's why we started in EVs, we want to make the uptake of EVs quicker because we know that it's a way for customers to have a lower overall energy cost if they stop paying for petrol. And then how can we use demand for fleet, particularly in hot water, everybody has a -- more people have a hot water cylinder than an EV. And so that's a really great way for us to be able to drive down customer costs there. So if we can -- those costs get pushed through to customers in April next year. And if by then, we can have a suite of products stood up, and we can help more of our customers reducing cost that would be good. But we'll pass through those lines costs like we do every other time. Yes. Thank you.

Right. Hi, everyone. I'm Rory Blundell. I head up strategy here at Meridian and part of my team's function is to look at the medium to longer-term energy analysis. So I was going to take you through that today. Unfortunately, I missed out on the video when they were being given out. And thank you for that lovely set up, Mike. I appreciate it. So I've been around the industry a bit both within the competitive side and some time with the regulator. And since joining Meridian back in 2020, I've been pretty impressed with the energy modeling that Meridian's developed in-house and maintained all these years. I think it's fairly unique and a real source of value for us. And there's 3 aspects to this. I mean, first up, the model from an analytical perspective, we've got an in-house model of the wholesale market. it attempts to mimic the outcome you'd expect in a well-functioning market. And by that, I mean prices tending to cost, security risks are well managed, revenue adequacy for new investment, hardware reservoirs are managed well, it really is an all-singing, all-dancing view of the future. But obviously, you've got to chunk it down from real world to make some progress. Secondly, having a framework is only part of the puzzle, you really need to feed and water these things. And by that, I mean, you need to keep the assumptions up to date. You need to keep tweaking things as the underlying market changes underneath you. And to that end, we've got a dedicated team that's always reviewing and assessing these things. There's a team of other kind of wider team of experts that helps out at the same time. We're always looking at how we're using the model and what it's outputting. We do a big annual refresh. We take the board through that. And then from time to time, we do kind of midyear updates as the world changes. And then finally, these things are only useful if you actually use them, and we do. Clearly, we need to -- we know the limitations with predicting the future. So we're not complete slaves to the output. But having that central kind of curated set of assumptions, scenarios, outputs. It's great coordinating tool for everyone in the business. And it's some of the stuff I'm going to take you through today. It underpins a lot of the investments we make at Meridian and just informs general views of future. On the screen, some of those inputs and outputs, I just described earlier, I was going to step through the ones in green over the next 10 minutes or so, if I keep to time. I would say don't get too fixated on some of the charts and figures I'm going to put up there. The aim of this session is to give you a broad overview of how we think about the future, some of the challenges, some of the conversations we're having internally. The results are interesting, but it's an old adage, it's usually the case, the journey to getting to those results is where you get the real insights from. Right. So you probably won't pay attention, but I'm going to start with health warning. We typically talk about plausible futures or scenarios versus making predictions about the future. And our 2 go-to scenarios evolution and revolution, just Evo and Revo, for short. Evo's a bit like a business as usual view of the future. It's really a result of modestly changing operating environment, broadly classed as limited decarbonization. I think if you went into the future, it's a world you'd recognize based on what you saw today. Revo, on the other hand, is a lot more of a dramatic path to decarbonization. You ultimately end in quite dynamic future quite differently to today. In either case, you've got to make some assumptions, and we assume similar market arrangements to today hold throughout the future, which feels like an okay assumption, you'd have to say, by all accounts, the market's delivering across those 3 things, energy systems are always trying to balance affordability, reliability and sustainability. Right. Health warning out of the way. I'll start with the trickiest one, which is demand. This is our current house view of annual demand in gigawatt hours for generation. It's based up -- it's based on bottom-up views of the future. The takeaway here is that in either world, Evo or Revo, we see significant demand growth in the future, though it's pretty hard to tell what trajectory we're on right now. This growth follows around 15 years or so of stagnation. And the big drivers of change we see coming from transportation, EVs and decarbonization of industry, and that's going to ramp up in the coming years. Peak demand, that's also going to grow, and that's going to create some challenges for the industry to keep matching those peaks, albeit with less thermal plant. And as it either ages out, retires or never gets built, much of that linked really to how New Zealand's gas policy adapt going forward. But I guess in either case, we see a widespread need for investment and generation at scale. And it's this kind of analysis that sits behind, you might have heard the 7 in 7 target for the development team. That kind of takes us to about 2030, but there's a bunch more investment required after that if New Zealand's serious about hitting its decarbonization goals. I think it's a particularly tricky area because some of those big slabs of demand really depend on specific policy settings and the relative cost of energy, electricity rather versus substitutes. And as we've seen, that can all change quite quickly. But all in all, I think our projections, they're not out of whack with other numbers you see out there looking across a bunch of them, I think we said about [indiscernible]. And look, while I think we all might largely agree on where aggregate demand is hitting, there's no doubt many differences when you look under the hood. From a historical perspective, one typically cares about demand for grid generation because that was traditionally the only way you'd make the electrons. But from a customer perspective, they're going to buy from multiple sources in the future, maybe -- well, definitely from the roofs, maybe 1 million rooftops, if you believe a Revo world playing out in the future. But the point this chart makes is there's a lot of moving parts that make up what we call demand. And while many of them are small on a per customer or per connection basis, they do add up over time to significant amounts. You'll see those 2 areas in blue and looks like risky orange that I called out earlier, being EV demand and industrial decarbonization. They are the 2 big drivers. And offsetting that below 0 is rooftop solar which offset net demands somewhat. The other point worth noting is how that demand shows up and interacts with the market, be it from physical kit like batteries, vehicle to grid, rooftop solar or some of the stuff Lisa spoke about, how more innovative tariffs actually change consumer behavior. It's going to have a massive bearing on that residual demand curve, which generation -- and generators will be competing with to fill through their investments. I'll touch on that when I talk about firming a bit, but the message I wanted to leave is that the demand-side participation that we've all been going on about for decades really is just around the corner, and it will be a necessary part of a well-functioning energy system moving forward. Right. Moving to supply. So we primarily focus on understanding where costs are heading because if you take a step back, New Zealand is fundamentally a wash with generation potential. And assuming we can get through the RMA and consenting type issues and transpower and build the grid quick enough to get the electrons where they need to get to. Then understanding their future supply mix really does come down to try to understand where costs are heading. So the chart you see there is the levelized cost of energy, LCOE in real 2024 dollars for the 2 main renewable technology, solar and wind. And you can think of LCOE, that's the average price you need to receive in order to meet your investment hurdle. Basically, if you look at the lines, they've been trending down over time as the world gets better and better at deploying these technologies. That's the so-called learning curve. But due to recent political unrest and inflationary pressures, those costs have taken a kickup of late. And you can see there's some dots I've put on the chart, we do track other projects to help benchmark our views and our views are those shaded areas in green and yellow going forward. That view is going to change, no doubt. But the message I wanted to leave is we still -- our house view is we see innovation still taking costs out in real terms, albeit unfortunately starting from a higher base now. And you look at the projections, solar costs probably have more to 4, relative to wind. It's more commoditized as likely to be a crossover point at some point in the future. It's hard to know when, but it does really underline why it makes sense to hold options in both. And finally, this is just a cost view. Remember, how your generation plant gets rewarded from the market. That's a completely different question entirely. Now on to prices. We've all been very patient, and you heard my health warning about plausible scenarios, but I'm sure this is a slide that matters for most people. When you put all those demand and supply assumptions into the model with a bunch of other constraints hit the go button, these are the prices that come out. These are North Island average prices in real 2023 dollars, just to keep you on your toes. If you look through the humps and bumps what you see price levels clearing around about $115 for the next 15 years or so. Before the weight of that renewable investment and -- continual innovation, just pull those prices down. And to come back to my opening slide, at those prices, New investment is clearing its WACC, security risks are being managed, everything is working as it should be. It's a market in equilibrium, at least on this spreadsheet. Very advanced spreadsheet, but on a model and I realize I'm skimming over some of the near-term issues with the gas market, which are definitely keeping our wholesale team preoccupied. But we're more -- in this study, we're more concerned with that medium- to longer-term picture, trying to understand the big issues of the decades to come from Meridian. And to that end, when you take a step back, we feel in a well-functioning electricity market, combined with sensible supporting policies like resource legislation and gas policies, in particular, you'd expect in the long run, electricity prices to kind of track costs. So the picture I'm putting up there with that mine shouldn't be too surprising. And just one last comment. I think that price range between Evo and Revo, it is quite a tight spread. And I think that probably reflects just the rational underpinnings of the model. And the fact that when you look at New Zealand's incremental cost curve, adding new generation, changes in demand don't have necessarily a big impact on price because, for instance, slightly higher demand, that might just mean a few more wind turbines need to get built. And if they round about the same cost, it doesn't feed through the price. But that was average prices and much like demand, a lots going on under the hood. So this chart shows price participation, TWAP to TWAP for some select assets and technologies. This is a measure of the average price received by the asset divided by the average market price. Numbers greater than 100% mean you're using the flexibility of your asset to only generate at the prime time, so you get a better price on average. And what it shows is, as you add more intermittent generation to the grid, you're likely to get more price volatility. And as we've seen recently, cold, clear, still nights, probably still going to be associated with high prices going forward. Meaning the average price that solar and wind receive is probably going to fall over time whereas more flexible assets like the Waitaki chain up top, that should increase. Solar GWAP to TWAP should probably fall faster than wind. There's higher correlation between solid generation sites. And wind, of course, has variable operating core costs, which means some wind might be spilled at times at very low prices. Wind can always get lucky to that it's generating at the peak times. And at present, New Zealand doesn't have negative wholesale prices. They can only go to 0, but other jurisdictions do. If we were to put those in our system, that will change this picture again. going forward. But I mean, finally, this is all well known. This should be factored into investment decisions at the time they made. And so I think the main point here is, it's really important the market keeps adapting -- prices keep adapting to the reality and the physics of the system because that keeps attention on investors to look for the best projects from a system perspective instead of just an LCOE issue that of who's got a lowest cost plant. Another way to look at this price volatility issue is to look at firming requirements. This chart shows how much energy is being dispatched by various firming resources under Evo and Revo. Clearly, more megawatts installed, but this is just the energy being dispatched. I think the important thing to note here is that in either world, we see more and more firming resources being required in the future to both fill the gap left by eventually thermal and there's a general challenge of delivering reliable power year in, year out with a highly renewable system. And I know firming is kind of the buzzword in the industry at the moment, but meeting demand is not a new problem for the market. That's kind of what we do. But I think the accelerated demise of the gas sector has really brought this firming and flexibility question to front of mind. We are looking at this really closely right now. And I suspect it's going to be an ongoing project for years to come. And that's why we think that demand response contract with NZAS is massively important and a real positive step moving forward. So there you have it. That is a quick once over of the medium to longer-term energy modeling we do. And to come back to the intro we see this as a really valuable resource at Meridian. And just finally, you can be assured that when Meridian has got a position out there in the market, supporting this or that. It is underpinned by pretty rigorous analysis, which is ultimately trying to get the best outcomes from the New Zealand System. Thanks to Mike, which you should probably stand up here.

I'm actually interested in the slide before that -- most -- the LCOE one. A couple of questions in there. I guess when we look at the history, in particular, a lot of that decline has been due to falling interest rates and I guess lower cost of capital. What's your cost of capital assumption that you're using in the sort of the forward? And I assume it's a flat kind of a number going forward as opposed to a decline in cost of capital?

Yes. I think we've played around with various things, but it's hard to predict these things. I think what we've got loaded is about 8% at the moment.

That's good. And then second question I had really was just thinking about, I guess, the like turbine costs and panel costs relative to other costs like civil costs and those sort of things. Does your model sort of go down to that kind of level of detail. And you're thinking about solar in particular, where, I guess, the civil costs, et cetera, or non-panel costs, if you want to put it on the way will be a growing feature? And how are you thinking about, I guess, inflation in that?

Yes. The team does -- and it's a bit of a work on, but yes, we try to track as you say, break up the costs into the component pieces. So you're 100% right, like a lot of the reduction, yes, okay, interest rates, but also the core technology. But then what we try to focus on, too, is these are essentially landed build costs. So while the panels are getting more effective and cheaper, you still got to import them. You've still got kind of bargaining power with your negotiations, and you still have to land it and build it. So we're trying to break those into the parts, and as we just try to show with this matter in dots, as we understand it -- as we learn about different projects out there, we're always trying to update that view.

Just a quick one in terms of sort of longer-term firming assumptions, especially for dry years. Clearly, that's not something that you've talked at the moment. How do you think about sort of something like biomass in terms of dry years, especially the volume that can't be filled by the flexible NZAS contract? I mean, is that priced into your long-run cost assumptions?

Yes, I think -- I mean, I haven't seen -- I don't think Genesis has published a study, but I think we'd be fans of that if that could get up and running. It makes sense. It is factored in there, to the extent, when we look at, let's say, thermal firming in the future, I think from memory we might have a price in there of like say, biomass of about $25 to $30 a gigajoule, but that's a proxy for LNG or something. So while we may not have picked the actual right underlying fuel, as long as our costs are kind of within Kiwi, it produces sensible answers.

I think you've got an existing long term wholesale price assumption of about $80 to $90. So it looks like you're sort of introducing a new number here in $115 for the North Island. Can we assume that sort of your long-term wholesale price assumptions moved from 85 to 100 today? Is that kind of what we read from the presentation?

Yes. I spoke with the team earlier, on a like-for-like basis, adjusting for inflation all that, we're about $10, $15 a megawatt hour, up from previous. So yes, you're probably right, like the South Island is about $10 below that. I think those numbers you called out were about right.

And then just a follow-on. It looks like you're sort of contemplating a world where we continue to learn on LCOEs, and that offsets declining GWAP, TWAPs, as we add more correlated variable resource. So I suppose if that's correct, my question is how confident are you on each of those thesis. In other words, are you more confident or less confident on the declining LCOE versus the declining GWAP, TWAPs?

That's a tricky question. Well, disclaimers around predicting the future. I think it is hard. I think we're probably optimistic maybe that there's still cost to come out. The fundamentals, I was talking with Nevill before, there's still like a lot of optimization that can still happen. You look at Harapaki, like building that thing on a mountain top versus moving to the flat land, how you rip out cost from the civil and all that, that's all embodied in that LCOE stuff. So I think we're still optimistic that there's cost to come out. But as we try to show, it's probably more on the solar side, that the wind is quite mature. GWAP to TWAP, just so it's up there as everyone sees, that well, it makes a kind of -- it makes sense within the modeling framework to be honest. But I'm sure if I have my modelers beside me, they'd say there's a big confidence interval around those things, understanding where peak pricing is going is really tricky, right? Because if you're talking about really the peak prices, if they're up at $10,000 or so, they can have quite a big impact on average price levels and these kind of numbers, too. And so what we're finding is as you get up to that edge, it can really swing the answers around a bit, I think these are pretty good averages, but time will tell basically how many batteries get deployed, that kind of thing.

Can you talk about, Munro, I think that's the first one you got going after Harapaki where you've got $115 average for 15 years. But by year 15, you're down at $100. And these things, aren't they 35-year life spans at least. So the next 20 years, you're below $100. Can you really afford to build that and make a return on it with those sort of assumptions?

I might not to pass it back, but I'm wondering if this guy is still in the room? I'm wondering if -- do you want to take that...

Our assumptions around Mt. Munro show us making a good margin. And I would have to confirm with the team what life spend we're being offered by the OEMs for it, but 35 would be the longest but we certainly take a forward view and that is conservative when we're putting those cases forward and are confident that project still makes sense. The way consenting is going at the moment we'll likely go ahead before Mt. Munro.

And does that to a certain degree on so why you've got 3 or 4 solar ones going ahead right upfront because they're a much shorter life span and therefore, you can take advantage of the $115 before it does drop down to something below $100.

It's partly that. And partly solar, we're finding should be faster to get away than wind. So faster to design should be faster to consent. Don't get me started and faster to build. So in terms of just delivering quickly, while wind has a higher capacity factor and at the moment should be cheaper. So this is the thing we can deliver the most quickly.

So speed is trumping everything else from a political standpoint?

We're doing both, but you will see the solar coming first just because it's faster.

And just to echo on that, and I'm sure if Nevill was standing here, we are trying to get our cadence up with delivery. It's not the kind of industry where you can just start and stop, like big scale infrastructure. And if maybe we're drinking Kool-Aid, but based on that demand, we've got decades of investment and so we just need to make a start. And I think once we do one after the other, and you're moving the good crews between things, that could be to someone's else's question, that's another way you can kind of optimize and rip cost out instead of project every couple of years and have to restand up everything.

Thanks, Rory. I might actually stop there because I'm hungry. Rory is not, so if you want to head him up instead of him having lunch, he's fairly available for that. Just a reminder, we'll be back on 10 past 1. Lunch is back towards reception in the McKenzie restaurant. So outside, down the stairs, past the pool and hopefully, it's well. So I'm posted. Thank you. [Break]

Good afternoon. I hope everyone enjoyed lunch. I'm Rebecca Knott. I lead our renewable development team, and it's my pleasure to give you an update on our development work streams. So I'm going to touch on our pipeline changes from what we reported in our midyear results, give a bit of detail about the two projects that we've put forward for consideration for the government's new fast track. And also a quick talk about how we go about prospecting and also the importance and our commitment to Iwi and community engagement. So our pipeline. The one thing I can tell you about this diagram is that will continue to change. And what you see here will not be the order that it gets built in. It will be the best that we've got now, and this should change because as we go through, we are constantly juggling consumability, buildability in the economics of what we've got in the pipeline. I've said to a couple of people when you start looking at that total in the top left corner, don't expect that to blow out any more than what it is now as well because the aim for us is to not build an unyielding pipeline. It's to make sure we are focusing on the ones that make the most economic sense. And if you have too many things in your pipeline after a while, you end up spread too thin and too distracted. So we want enough volume in the air to have confidence that we're continually getting the right options in but letting them fail fast as well, not holding on to things. And you will see that, occasionally, we do put things back out for others to pick up if they see more value in them than we have. In terms of changes since the February interim results announcement, the things you'll note our Manawatu battery has been pulled forward of it. We've got some pretty strong ambition around getting that away, and we'll be lodging our consent application in July. We've secured a Waikato solar option, 100 megawatts that you'll see there. That's land that we've recently purchased. Western Bays solar is one of our two proposed fast track developments, and it's a large development. I'll talk more about that one. Swannanoa is still heading towards consent. And then we've named what was previously Taranaki, both wind and solar there is now named as Waiinu, and we'll talk a bit more about that. Waiinu Energy Park. This is exciting. We believe this is one of the largest economic renewable energy development options in the country at the moment. It's big. We would build it in stages. I have already had a few questions around the size of some of the numbers here, and obviously the demand projections that Rory put out, no one has the exact certainty on when that's going to arrive. What we're aiming for in our pipeline is to have options of different sizes as well as in different geographical locations so that we can get the right one away at the right time. These larger projects if we can send them but then have the flexibility to build in stages that will work really nicely for us. This is approximately 10 to 20 kilometers sort of Southeast from Waipipi, which you might be familiar with. And we expect that it will probably experience a similar wind regime from what we know of Waipipi. And the wind would be the first stage that we would look to get away here. There's a lot of work to do still to get these projects through the Fed, by the way. My challenge is to get them to consent. And our second project that we've put forward for the fast track is Western Bays Solar. And this is slightly north of Kuratau, if you're familiar with the Western shores of Lake Taupo, and is a fabulous, fabulous site, really lovely and flat and nicely north facing, which is what you want. So this is another big project, maximum capacity at the moment of 500 megawatts potential to expand, but they need to start to think about timing of potential grid upgrades when you start to go much bigger. But this one, one of the really neat aspects of bringing a development into this area is that there are really stringent nutrient requirements that have been introduced to the catchment around the lake. And so actually changing land use here is not a bad thing, and that's why the land owners are really interested in talking to us. And a bit on prospecting. So how we go about getting things into our pipeline. As I mentioned before, a lot of that is around evaluating a large number of options and so to give you an idea, in any one year my team will look at something between 50 and 100 different options. And some of those are us doing our own green fields investigations. And out there knocking on doors, sometimes even resorting to writing letters and putting stamps on them when you can't get hold of land owners in another way and going and talking to land owners about potential projects. The other end of the spectrum is we are now seeing more projects being brought to the market by developers whose long-term goal was to potentially get something to consent or near consent and then put it out for someone else to pick up. So we evaluate those as well, and we're really open to that sort of prospect, particularly if anyone's got a consent, guys going to pick up on consenting on the presentation after mine and just to outline the myriad of choices for consenting but also some of the challenges we're facing there. Because consenting is still one of the biggest things holding us up and growing our renewables in this country to the level that we need at. But yes, evaluating other people's options, some are great. Some people have got a really high view of what they think their project is worth, and we don't necessarily agree. An example I gave at dinner last night was a solar option that was brought to us and they thought it was worth 10x what my team could have consented that for ourselves. So you just have to decide for yourself whether it's worth that for the saving of time that might have for you to develop a similar option yourself somewhere else. But we are seeing other options that do look promising and partnerships that look promising and our partnership with New Zealand wind farms is in the public domain, and that's really positive, and that's a fantastic project, the wind resource at Te Rere Hau is magnificent. We're evaluating another option at the moment that equally is looking really good. So we're open to do it ourselves or with others or to purchase options, whatever makes the most sense. We are also looking at different horizons. So in the short term, it is about what's consentable and buildable now. but we have an eye to the future. And as Neal mentioned, our target out to 2050 looks like about 20 Harapaki sized projects, so that's huge. So we have an eye on the next two horizons as well out to 2040 and out to 2050. In net horizon to 2040, that's when offshore wind, we think, will come into its own if it's going to in the nearer future year. That will largely be off the back of Australia, starting to move into that space and supply chains coming down to our part of the globe. We need that first. Offshore is more expensive than onshore and logic tells you that it will be building on land versus building in the ocean. What it brings is scale. And so that comes down to what our national ambition is at that point in time for that kind of magnitude of generation and obviously, the transmission requirements that will go with it too. I think that's probably covered off prospecting and now reporting just one of Rory's health warnings and maybe that's why it's in read. We talk about secured and advanced options, secured is where we hold the development rights and advanced is where we either have an interim or we're in the process of giving there, but it's far enough ahead. My team is a litmus that if they had to defend it to Neal, they could. And my last slide here is to touch on Iwi and community engagement. This is an aspect that is hugely important to us as a business and to my team individually as well. As a business, we have intergenerational assets, so we're going into these communities not just to get a consent, not just to get something away, but we're actually going to be there for decades. Our people are going to live there and be part of these communities. And our discussions with community stakeholders and Iwi since the announcement about the proposed fast track. There's been some real concern that this is an area that would suffer. And our reassurance to them is we do not plan to change how we go about consulting with stakeholders. We will continue to turn up. We will continue to listen about what's important to them, and we will continue to work for the partnerships that we look to form and we do look to form memorandums of partnership or memorandums of understanding, particularly with Iwi in the areas that we're developing our projects. Having said that, community engagement is not a smooth ride. And if you've been in this game for any time at all, you understand that you can inform, but you will never win everyone. And one of the challenges that I think we have at the moment with our consenting regime in particular, is that the majority of view isn't always winning out. And we can't afford to have to be unanimous about projects. Someone is always going to dislike a project in a particular place, whether it's a road or a wind farm or a solar farm. And so we need to be able to step back as a country and form views around what we think are the best projects to get away overall. So we will continue to engage. And prior to hearings for the projects in Mt. Munro is a case in point, we're currently in mediation with a group around this project. The steps on the slide speak for themselves in terms of the number of people that we've spoken to and the community around this project. And the majority think the project is a great idea. Some are neutral, and there are smaller group who aren't so formed. But we will continue to engage. Guy will talk about the consulting part, but I have had a couple of people ask me where that's at. So we have two consents lodged at the moment. One is the Mt. Munro, and we lodged that in May last year. To give you an idea of time frame, our environment court hearing is September this year. Our other projects, Ruakaka solar, we've received the District Council consents for that project, but there is a sticking point on the regional council consent. And so what we had hoped to have to fit in December last year, we are now having a hearing at the beginning of August. If someone chose to appeal that, that could add another year on to that. So that's just to highlight that we can do what we can do to get things lodged but there are some things that do need to be considered in terms of how consenting goes to get these projects away. We're optimistic. Of course, we're optimistic. We're going to get them away. And we've got a good, solid pipeline of things but it is truly one of the greatest challenges for development team at the moment. Anyway, that's -- we're still stopped through and I won't go into Guy's presentation, through what we're doing in the renewable development team. And I'm 6 minutes ahead of schedule, which means I can take questions.

Just a quick question around -- when you talk about the secured options and so you've got the land owners signed up, how long do you normally have them signed up for? Does it stretch out to the horizon 3 potentially or presumably those -- that they lapse at some point? Or you've got some sort of...

Yes, there are hold points on them and review points. And one of the things that we do as well as put some incentives in there for us to move faster so that you're not land banking. For the projects that we see being in those further out horizons that looks a bit different, though. And we're very straight up with land owners about that and where we see them fitting so that there isn't any expectation of speed ahead of what would make economic sense or transmission capacity sense.

Two for me. The first one is how should we think about lifetimes now? Obviously, it's always been a moving fees gradually moving. But what lifetime would you attach today to a grid scale solar or to onshore wind?

Great. So solar first, let's say, 25 years. And there will be degradation over the life of the project. So how you choose to maintain that will be individual to your business case, replacing panels or as you say it. But when we're producing our business cases, it's one life cycle. We are aware of some who've been talking in the market who seem to be referencing two life cycles, but that doesn't seem quite rational to us. And then for wind, we work with the OEMs on the individual sites to get their analysis. And obviously, turbulence is one of the biggest issues for the life cycle of a wind turbine. So 20 years would not be good enough. 30 years is great. And in between depends on the economics of the project.

The second question is on build versus buy. Obviously, buying projects is on the cards as a way to go. What about PPAs? There's no discussion of PPAs at all? Is the plan here to be built only? Or can you take off take some other projects?

My understanding, and I'm open to Mike and Neal chipping in, is that at the moment, we're open to both.

[indiscernible] Sorry we're open to both. We're negotiating with PPAs as we speak. And [indiscernible] was a great example of where we took the PPA on the project and also a JV and the construction side of things.

So taking into account your [indiscernible] on demand growth, that seems to be slowly picking up through the 20s. You've got about 1,500 gigawatt hours of juice you're putting into the grid over the next 2, 3, 4 years. Are you guys watching your competitors as you are there doing so that you don't depress the wholesale price materially?

We are. We keep our own track of what we believe is in the market and proposed to be brought through. At this stage, the way that the consenting timing is going. We're not seeing that being an issue at the moment, but you would, as time goes on, be watching to see that you're not getting into serious overboard, which I don't think we're at risk of at all at this point. But it's -- we're having the flexibility on the very large projects to build them in stages as a benefit.

So your problem with consenting what seems to be an industry problem of consenting has pushed out projects enough for you to feel comfortable that the forward curve is fairly reflecting what's occurring in 4, 5 years' time?

Yes, I think. Sorry. Obviously, for us, what it's meaning is juggling. So being able to bring projects like Te Rere Hau forward in our pipeline, while we're still getting the consent for Mt. Munro gives you flexibility. And as I mentioned before, being able to get away some quicker wins, smaller-scale solar farms in the interim as well. Done. Thank you very much. I look forward to talking to you later.

[Foreign Language] [indiscernible] from this beautiful part of the world, Queenstown. Part of the world is pretty important to Meridian as well. My [indiscernible] is about the consenting part, but I'm the General Manager of Development as well, so I can take questions about this or anything else relating to our development efforts and what we've done over the last few while and what we plan on doing. Before I thought I'd give in to consent for detail, just upper level, and if you know this, so apologies -- but the RMA framework, it's not just -- people focus on the RMA, but it's actually a kind of complex framework of interactive documents that kind of all nest together. And at the top level, you've got the Resource Management Act, a central government piece of legislation. And sitting below that, there's a suite of what you call national policy statements and the purpose of those to get direction to local decisions or the local decision-makers around how to kind of balance local detriment or local impacts worth kind of things of national importance. So for example, a national policy statement for renewable energy, as something we've been passionate about for a while because that gives district and regional counsels some ability to take on national benefits when they're looking at something like a wind farm, which has obviously got landscape effects. Then sitting below that, you've got regional plans and district plans and they talk to the built environment and they talk to the natural environment. And there's parts with that, that planning part of the planning framework, which gives kind of head or tailwind to your projects. And then for hydro, there's another layer in which there are a catchment plans. So for the Waitaki as an example, is a specific Waitaki allocation plan and sitting on that is actually all the devil in important detail. So -- for example, minimum flows, lake levels, maximum flows, flashing flows, all of the stuff that goes to flexibility and the production ability of a hydro scheme actually sits on kind of Tier 4 of the RMA framework. So our job is to keep an eye on all of those layers, and they all come up for review at different times and make sure we can kind of keep as much alignment from our perspective as possible for the whole matrix. So it's not just the RMA. So my first slide, the main purpose here is to show what we've done historically and how long things have taken. Because there is a story and it's a real story about the length of the time. Over time, since Te Apiti was incredible, it was done so fast. But since then, things take longer and the condition suite is more complex and pick an example of a project, we've done, Mill Creek, it took nearly 4 years to consent. So when you kind of wind the clock back before you even start building a wind farm, you find a location, you're probably up for at least 3 years worth of resource assessment, ecology assessment landscape. So you kind of got a 3-year runway, a 4-year consent period and probably 3-year build period. So you get to 10 years relatively quickly for a major wind farm. At the bottom, here's our outlier. Ruakaka took around 100 days. And the reason for that is we got that done through a non-notified process at a district regional council level. That is by far the fastest route possible and the RMA. But it's only really open to noncontroversial projects that fit really well within that kind of matrix of the RMA. Here's a picture of the future and the purpose is not to debate what the future looks like because most people will agree there's an upward slope and curve. The main point here is to look below the surface of the growth trajectory. All of that stuff will need to be either repowered. So all the wind farms in the country at some point over the next 20 to 30 years will need to be repowered or need to be reconsented. But the biggest part really is the hydro system. It still accounts for the majority of the country's energy and the majority of the country's flexibility. Best case consenting duration for hydro is just 35 years. So the Waitaki is up next year. So let's not forget about the importance of hydro when it comes to the consenting conversation. Okay. Turning to the options and choices that we have and everybody has to make when you're looking at new projects. There are numerous ones, and they will have pros and cons. At the top, I've already talked about, the non-notified route as by far the fastest but you've only really got the chance to put noncontroversial stuff through there. So for example, our Ruakaka battery went through that process. The land we had was zone commercial/industrial. So we had a really helpful district planning framework to work with them. Our neighbors kind of look like us. They're all heavy industrial, so there wasn't much of a landscape issue to worry about. And visually, it's quite low lying. So that's probably the tougher project that we will continue to run through a non-notified process because it's quick. We did try to run the Ruakaka solar project through that, and we got half through it and the other half, we got stuck in the other half Rebecca talked about, which is the regional council component of that consent process and that added a year to that, which would otherwise have been hopefully taken to Fed last year. If we come down this, where is Ruakaka solar is at, it's a notified process. Direct referral, Mike and Rory talked about that. We lodged those consents since May last year and the hearings coming up in September. So that's a really long time to wait just within a process. And there's a lot of stuff that happens within that period, but it's still in our view too long. And that's the other fastest broke at the moment. There's a direct referral so you skip out the local decision-making process and go straight to a final decision. COVID fast track, that's closed but Te Rere Hau joint venture we're part of as consented under the fast track COVID region. The challenge with that one is the consents going in a 2-year lapse time. So -- it's means you're going to move quite quickly. And then the proposed new fast track and Rebecca talked about our 2 projects that we have put forward to be considered for the schedule of the first suite of projects to be assessed under the fast track. So moving to the fast track. I'm sure you've all heard of this. It's resonating quite controversially and it will attract, I'm sure, a suite of projects from a range of sectors. Some -- in our sector, we believe our stuff is relatively noncontroversial but you can expect to see some stuff on there that is a lot more controversial. The process -- we put our submission in, it's all notified. I'll talk about our key issues next, but we do expect this to be become a bill in the last quarter of this year and we expect to know where we stand in respect of that on the same time. So our view of the Fast Track Bill, we think on balance makes sense if it's enacted properly. We think it can take time out of the development process, which is important, I think, not just for us but all of our competitors in the sector and the country as a whole. The 2 issues that we've really flagged up, the first one is the bill has been constructed around new development and it doesn't really lend itself naturally to putting a hydro that can seen through that process. So we think the FTAB needs to be opened up to be able to consider existing hydro and alongside new projects. And the second one, and Mark alluded to this in his opening, which is in terms of kind of political stability of decision-making. We believe decisions should really rest with an expert panel and center around evidence rather than to be elevated up to be made by ministers. I think that kind of makes longer-term resilience and decision-making. But apart from that, we're largely in agreement with what's been put up. And I don't have to cover them most, we've got really exciting looking projects. Waiinu is close to my heart because I grew up around there. It's also big and scalable. So there's a lot to like about it. And our construction team love it because it will be our first flat project. So there's a lot of -- for those that went to Harapaki, there is a bit of monster so to come down and work on the flat will be a welcome relief. And Western Bays Solar shows the benefit of having boots on the ground, that came through Lisa's team through her agri team. So we've picked up a few of our development options just through our kind of farming connections through retail agri team. And last but not least, our most valuable consent process in the nation and for our company as the Waitaki chain. Between us and Genesis, that accounts with a little under 20% of National Energy, so that's huge. The vast majority of hydro storage [indiscernible] in this hydro chain as well. So it's a massive one. We've been working on this for at least 10 years. So those layers of all of the regulatory framework, we've been attending to those layer by, layer by, layer to try to secure the best possible route for the Waitaki consent to be considered. And our kind of -- our target or our aspiration is to achieve an outcome where we get the same operating conditions, nothing more, nothing less. So the same generation capability, the same operating flexibility, important for our company, but it's also super important as we move forward. That flexibility of hydro becomes more and more and more valuable as you -- as you kind of amalgamate wind and -- wind and solar intermittency and kind of manage that. So a super important milestone for us. We're going to run this through the existing RMA process. We have thought about pulling it out and putting into the fast track. But because of the work we've done around the RMA framework, we're in really good shape. So to give you an example, we've got what's called and activity is -- we have to get a consent. So we've got -- and just the words escape me, there's a word in the consent for an activity status where the consent authority must grant you a consent. All that's up for grabs are the conditions around that. We've also got agreements with Ngai Tahu with Dock, Fish and Game with all of the key stakeholders in the catchment that supports the same consent in the outcome. Any evidence suite is massive 300 pages, 20-odd appendices, 25 evidence providers. That's a huge one. It's the biggest consent under the RMA period. So yes and pleasingly, our consent now that we've lodged they are operative until a decision is made to replace them. So we're kind of good to go. So we're ready. I think that's my last slide. We've got 8 minutes for questions.

Just coming back to Waitaki. I understand contact maybe looking at fast tracking some changes through -- in their consents. I suppose my simple question that's [indiscernible] obviously. My simple question is, why not take your time on Waitaki? I mean -- and why not go for more? I guess the price could be large around inflows or access to contingent hydro, et cetera.

It's an interesting question because other people always ask us here much more can we hear around Waitaki. The approach we've had with all stakeholders is to say, let's try to achieve what we currently have because there is headwind around all the hydro catchments, not just Meridian's hydro catchments to relinquish either energy production or flexibility. So our current view is if we can achieve like-for-like conditions that were set 1991, we will have achieved an outstanding result. The next tier above that, we have a couple of projects that could add additional capacity into the Waitaki chain. So we've decided rather than to risk the 95% of the value of that chain. We will secure that first, and then we'll go back and have a second quarter about things like putting a new power station at the front end of -- for those that have been into that chain at the Pukaki canal. There's a possibility of putting an additional hydro scheme at the top end. There's also the potential for a little bit more kind of like management. But recently, we did secure access to the bottom end of Lake Pukaki anyway. So I've almost got to the bottom of that lake as it is. So the next step up would be can you raise that late level and you start to get them to a conversation that has quite big effects on a number of people, including Genesis and how they operate the ticket or scheme. So that's a hefty conversation thereon.

Can I just on the back of that question. If the base case view is just status quo sort of the consenting for this Waitaki scheme, can you frame the downside a little bit? Sort of what does that mean for capacity through the scheme, like sort of worst case, maybe outcome and maybe probability associated with that as well?

You don't really want to think about it too much because things can get -- so put it this way, the upper part of that scheme at the Ohau division, that's rerouted water from Lake Pukaki right around the site through Ohau A, B and C then it came on comes back to the Waitaki scheme. So the rivers that once flow the Pukaki River is now dry. And Tekapo the same thing, it was a Tekapo River once upon a time. It's also dry. The Tekapo water is routed into Lake Pukaki, which then runs through the Meridian catchment and the Meridian schemes. So the worst case, there could be a world where there's pressure to reinstate flows within those dry river catchments and that would move water around a substantial bunch of hydro schemes in that. So the downside is what we've been managing to, which is why achieving status quo would be some result because there is pressure for reinstatement of ecological flows and cultural flows. And it's not just a Waitaki quarter or that one, so yes.

Just wondering as your portfolio kind of expands into the North Island, does it take -- and thinking about some of these reconsenting kind of arrangement, does it take some of the pressure off having to achieve so much in these reconsenting arrangements for water flow and so forth is your generation portfolio kind of evolves?

Not really we feel a lot of pressure to meet such an important scheme, not just for Meridian. The energy -- every gigawatt really is, you've got to build more. So that's a cost of the country as a whole. But the flexibility in particular, if we lose that, and then you start to look at what's the cost of alternative flexibility options like whether it be demand response or gas, the economic cost of that is quite large. So yes, we -- I don't know, we really want to get Waitaki consenting down status quo that would be an amazing result. So there's no pressure off what you say. Well, thank you. I'm around later, too if you want to...

[Foreign Language] My name is Tania Palmer, and many of you have probably picked up already, everyone calls me Tans, except my mom and dad. I grew up with 4 older brothers. So it kind of started the year and then it's stuck. And Mike Roan has started calling me Tans. We had a conversation at dinner last night. There was -- everyone calls me Tans, except my mom, dad and Mike Roan, but Mike you did it today. Nice Roan. So those of you that came on the trip yesterday will probably recognize this photo. This is Unit 4, which is currently in paces for mechanical and then automation upgrade. So it was a pretty cool visit. So I look after the generation business. In between Chris Evers and I because Chris Evers is our GM wholesale sort of between us, we operate, maintain and run the assets basically. We sort of work like this. We're pretty close with our wholesale family. So I'm going to talk a little bit today about generation's shift in strategy. In this slide, probably explains a little bit about why we needed to do that, and you would have picked up through all the previous presentations today to around the last 20 years versus the next sort of 30-plus years are looking quite different. So the sort of decades prior, modest demand growth, not a lot of build. Capacity wasn't that valuable, also capacities that sort of shorter megawatts available over those short, high demand peak periods. We could take a hydro kit out for 6 months. It actually took us a bit longer, it's probably 9 months and it probably didn't really impact terribly much, can't do that anymore. So that's a big shift. So our focus was on managing risk, extending asset life at the lowest achievable cost, efficiency gains, optimizing our costs and where we needed to end-of-life replacement sort of 2021 onwards, changing landscape, there's growth that's happened and is happening, which Lisa and Rory talked to a fair bit. New renewable build largely intermittent, which is what Rebecca was talking about. So it doesn't always blow wind and it doesn't always -- the sun doesn't always shine. So hydro is critical, obviously. And so peak electricity demand risk is the year in big, big value with capacity. So that means generation needs to be even more flexible than it is already. You would have heard in Rory's presentation just how flexible and valuable our hydro assets are, how do we get even more flexible. And so our focus has shifted a bit. It's not a reticle chuck the baby out with the bathwater and come up with something new. So managing risk is still critical. And a large asset business like ours, managing risk is really important. Do the work that we need to do on our assets, that's really important because then we can manage those assets in a way that sustains the energy contribution that's so vital. And we've been exploring low capital growth options in the generation business. So how do we grow dispatchable megawatts and deliver flexibility and really low capital ways that delivers quite a bit of value. And we've also been thinking with Guy's team around how do we enhance repower, rehabilitate the hydro and wind fleet. All our existing wind fleet will exceed the design life in the next 25 years, which Guy mentioned. So that's on our radar as well. But I guess to grow and flex our assets, which I asked of the team, you really need a foundation of really healthy, well-managed assets. We can't do that. And so the next couple of slides, I'll just do a bit of an overview of our fleet. So first off, hydro. We've got a really iconic fleet of hydro assets, as you've heard today. Really outstanding team of technicians, engineers and contractor partners who help us operate and maintain them. They are just superstars. They're deeply passionate about our assets and they definitely think about it for the long term. They know that what they're doing on the assets matters for future generations. And so you heard Chris talk this morning about the value of passionate people and really highly engaged people in in-house truly are, which is amazing. And so our strategic asset management planning, which we're really pretty good at and we are looking at constantly improving that. But it does allow us to pivot so effective life when you're running a large set business like ours, sometimes stuff won't go, how you thought it was going to go. And you need to be able to pivot really, really well. So the chart here shows a few things. It shows hydro availability, that line at the top. So that's kind of when you need them to run, they'll run. The availability is pretty high. And it's a reflection of the work that my team do on them. The service sector, so when they're actually online, Chris' team have them online and running is sort of in the mid-70s here, it's at green line and then the capacity factor. So the capacity factors are sort of the percentage of time they're running at full load. So -- and it's the red line. So you can kind of see, we've actually got headroom and we've also got other levers we can pull that Chris' team is around how do we look at wind forecasting and use our wind to undertake work on hydro, which we started getting better and better at, how do we reduce our contract position, calling this so option. So we've got lots of levers that we can pull along with our strategic asset planning. The most obvious pivot that we've had to undertake as an example, was when we started the Ohau refurbishment in 2016 and then just said we're leaving and we went -- frankly, we don't want to have the Ohau chain constrained. We want that flexibility available. So we switched to the Manapouri program. So that was a pretty big switch for the team, but they did it well because they're really good at it. And then complexity hit and the transform has started misbehaving. So on top of a really large complex program of automation upgrades and mechanical work, one transformer started guessing and then another one did in. So that brought massive, massive complexity into that program of work. So -- and as well as the impact on the planned program of works, it's impacted our cash. I think you guys heard yesterday from, look, transformer should be set and forget, [indiscernible], you turn them on and they should last you 40 years. So the fact that they lasted at least than 10 is really frustrating for us. Not only have we -- and you're really vulnerable, right? You don't have a transforming, you can't run a generation unit. So it's pretty key. It's also affected cash. I know Mike has always -- you'll be happy to know and he assist to each of us on the exit. I don't play favorites with anyone chance. I'm hard on your all around how much money you get to spend and if you look like you're not going to -- not going to come within the window. And I mean, the money we've had to spend on transformers this year, OpEx is about $3 million, which we shouldn't have had to spend and we could have spent elsewhere. And of course, it's going to hit us on CapEx this year and next year because we had to buy some new ones. So it's a bit gutting. But despite that complexity in those transformer issues, you can see the dotted line there, our generation output has actually increased. So that kind of reflects just how good we are at pivoting and how good my team and Chris's team are working together to really get maximum generation output for [indiscernible]. So we're pretty proud of that. Equally, we have a really strong fleet of wind farms with a really outstanding team of technicians, engineers and contractor partners who manage and service the turbines and they help us with the major component replacements. The crane lifts that happen in wind are the most complex in our business. They're really high risk that is very complex, as you can imagine, just location a line, but the sort of size and nature of the components in cranes. And we've got a really good contractor team that support us with that. And we've got a really good mix model of in-house staff hybrid, so mix of contract or an in-house and then totally outsourced to the OEM, which is what we've done with Harapaki. So that mixed model has served us really well. We're not solely reliant on the OEMs and we can train -- we've got really good training and technical capability in-house as well. So those of you with sharp eyes will notice that the West wind availability looks quite high given that it's curtailed at the moment because of the one of the transformers at West wind failed. So the total output of that site is 143 megawatts and we've had to curtail it to about 98 megawatts. But what this chart shows is turbine availability, not total farm availability just as a bit of a call out there. We've also got a really strong inventory model that ensures us against supply constraints. A lot of these components, they come from Europe and offshore in Asia as well. And so we have about nearly $20 million worth of inventory sitting there of major components so that we can swap if something fails, we can swap it out. I mean it's a little bit like when turbines are a little bit like a car, you've got a service and maintain them really well, and then sometimes you'll need to replace it, to keep it going. So they're quite a bit different to hydro and my team sort of described hydro, the risk and deterioration accumulates very gracefully and slowly and over a much longer time frame with hydro, and Josh explained that yesterday about the facing plate issues that we've actually been watching that for quite some years and then able to -- whereas a wind, a bearing might just go, although we're getting better and better with our online monitoring and sort of deploying some tools to keep an eye on that and grab it before it actually happens. The other thing when fleets of Te Apiti and White Hill have benefited from quite significant remediation in White Hill create 90% this year. So the team have done some good work here. We've got really good capacity factor versus global averages. The percentage of time our wind farms run at full load is pretty high. We're pretty proud of it and you can see some doubt of the air. But the [indiscernible] is that those higher wind speeds mean higher maintenance costs as the farms get older because they give real better. So with those strong foundations with hydro and wind, we've got nature's power, we've got iconic assets and we've got supersmart people. And then we've got this need to deliver on growth and flex. So we've been working for the last sort of couple of years in generation around how we might do that. And so what we came up with was 505. In fact, my team see turns -- Guy's got 7 and 7 and that sounds really cool. And Lisa, what was your one? You had something and they say, we've got nothing okay, right. So we sort of sat down as a leadership team, see right. What's our 7 and 7 actually, we came up with 505. So really, how do we deliver 500 megawatts of generation in 5 years from a baseline of 1 July 2023? So that was last year. And I'll talk a little bit more about that on the next slide, but the basic construct of our sort of a pre-strategy is a clear goal for the team, 6 strategic pillars to provide clear direction and the people 1 is first because it's the most important one. The 3 pillars that contribute most to the 500-megawatt in 5 years is growth flex in assets. So growth is new megawatts that we haven't had before, flex is making more megawatts available through flex and things like that and assets as healthy assets, that's really vital. And then climate action and just general improvement, innovating and getting better productivity. So this goes into a little bit more detail. So what we did back in 2022 to support our strategy and that focus on growth flex and innovation. We stood up a new operating model. I bought our wind and hydro teams closer together that were quite secret previously, and it created some capacity and some new roles to focus on growth and innovation initiatives. And it's been pretty successful. You can see how we've delivered so far on 505. So off that 505, from that baseline, 200 megawatts is in returning stuff service that's parked. How do we create a real burning platform to get that back in? The other 300 megawatts is new megawatts through growth and flex. So that 200 megawatts actually became 375 shortly after the 1st of July because another transformer started misbehaving, and then -- and then we had to curtail Manapouri Unit 4 because the goaling on the facing plates have got to the point where the engineers lets just dial down the load a bit. So it was -- that made the job a little bit harder. The sort of shoulders slumped a little in my team but that delivered really well. And we've delivered 64 megawatts of that so far. We've got over 300 to go, and we'll deliver that on the next sort of 12 months or so. The 300 megawatts, new megawatts, we've delivered about 100 so far and so we got 200 to go by 2028. So about half of that extra 200 will come from like hydro uplifts in flex and then the balance will be from a major upgrade investment. We might not have it built, but we'll have a really firm option in case for it and it's probably our Waitaki power station. It's in October turns 90 years old. So she's a very old member of our family and she's in need of an upgrade. So there will probably be -- we thought we're going to be able to get a lot more megawatts out of that. I'm pretty proud of what the team has achieved. Those Manapouri and Benmore uplifts that we did over the last year have delivered new megawatts and $7 million of additional revenue in the sort of last 10 months. And that megawatt growth uplift has cost us less than $1 million. So I brag about that all the time. I'm really proud of the team. It's the lowest capital growth in the business that is fantastic. So it's created a lot of motivation from my team to go and find more, which is great. And then the flex is delivering really good megawatts for peak demands and fewer outage days. The team is currently forming up a bit of a backlog for the next few financial years, things like automation, how do you replace manual inspections in automated, so you don't need to take a machine out of service to do what you might previously do manually and they're rethinking their maintenance work and they're doing a fantastic job. So I'm pretty proud of what they've achieved. So that's us, 5 minutes to spare that concludes my words, any questions?

Tania. How are you prioritizing CapEx against you say your growth in Flex and so forth with additional assets or the enhancements versus your new builds? And what sort of framework does that sort of go through?

So Mike is kind of the oversea of that, and it's pretty good. I mean, we -- like I guess, relative to the capital spend, I mean, our cash window this year is about $100 million and about $30-odd million of that's CapEx. So really, ours is a tiny slice relative to what we're investing in the rest of the business. And year-on-year, it will depend on the projects. So the team will put some cases together for projects and we get grilled as we should, by the investment committee, which is led by Mike on timing, what are the alternatives? Have you really tested them thoroughly. And if it stacks up, then it will get done. And as Mike and Neal always say, "Hey, if the team come up with a really good idea, it needs some CapEx that you haven't got on budget, but it's just a no-brainer. You'll get the money." So it's a pretty good process. It certainly doesn't feel like Dragon's Den.

I'm making up the numbers. Just a repeat question, this gets asked sort of every investor day. Just to remap ourselves, what are we talking about sort of a long-run average sustaining CapEx spend for the quick hit you've got today?

That's a tough question. You need to speak into the microphone, Mike. We might do that in August. It's Mike Roan here.

Yes people, it's a great question, Nev's got, which is what's our stand business -- long-run stand business CapEx profile look like. And you might remember that 3 years ago, we had a stand business CapEx profile of about $65 million annually. We dropped that to $50 million as we're going back through that as we have noticed that our stand business CapEx profile given some of the opportunities for change that would still throw in that stand business CapEx profile. You might see that lift. But-- what I was saying was we'll bring that back in August as part of the announcements that people got good insight into what we're forecasting. So over to Neal.

We'll wrap it up. If you just reflecting on one conversation we just had about the Waitaki reconsent. If I think back in 2021 at this same event, you'd ask me what I'm really worried about. There was insane play, obviously. But probably the thing that was on my mind most was our ability to reconsent that hydros game. It's the most critical part of the New Zealand electricity system and we fundamentally rely on it, and it's a source of competitive advantage for our country. So it was at the forefront of our mind. I think we've implemented a strategy that was very risk averse. We haven't been chasing extra megawatts extra flex, but we had to nail what we had. And I think the way we work through that process, we've de-risked that significantly. And I know Guy and myself have invested a lot of our personal time in that, which you would hopefully that's where we were spending our time because it was so important. So we don't have it wrapped up just yet, but every key stakeholder is aligned with what we're trying to achieve there. So that's a really good -- it's not quite an outcome but a good progress towards a great outcome. Then one question came through online that no one asked earlier, I was expecting that we haven't mentioned Southern Green hydrogen. The project team is still in play. Our partners are still working on it. What we're finding, mainly working through Woodside in Missouri up into the Asian markets is that the market for the green product isn't there and may not be there for a few years. So I expect that project will slip in terms of delivery time frames. But we'd probably be in a position to talk more about it again at the -- in your annual results announcement because we're having a bit of a catch-up with Woodside team in a couple of weeks. So we'll provide a bit more color there. But I can't see an outcome where it's not slipping further into the future just because the market is not really evolving the way -- about the way we had hoped it would. A few moments. Any other questions? Tom's got -- Grant?

And Neal, can you just talk about the flex costs that just continue to rise. What's the plan there? Is it -- we're currently making a big cash win out of the current wholesale price all is, is there just so much money around that you're not worrying about costs on that front? Or is there a plan over the longer term?

We've been very, very focused on the flex cost. We were chasing growth on the international stage. The team have done a lot of work for them in a relationship with sales force. But the pipeline wasn't materializing in sales. So what we've decided to do is we reshape the strategy of that group. They're now focusing back in on the New Zealand business. And on our Australian customers, we've got to over there, Blue Energy and Shell. As part of that, we'll get a bit more focused. We'll manage those costs and deliver the outcomes that those customers need first off. So I don't think Flex is going to be that super international sales opportunity, but we weren't really flagging, but we were hoping for. Any other last questions? Good. Well, if I -- just a couple of closing comments. I think hopefully, you've enjoyed the day. I mean the real purpose of today is not to hear Mike and I are talking too much because you get that from time to time, but to actually see a bit of the rest of the executive team. And how we're thinking about the business. I think our strategy is super clear. And hopefully, that came through execution is a lot harder, of course. But we do have a track record of executing extremely well. And I think I've got -- we've got a great capable team that will deliver great outcomes for this business and for our customers over time. The opportunities for growth are immense. You've no doubt picking up on that. And we have certainly have strong ambitions to be part of that growth. So we have resourced up the business. But the one key point I want to leave you with because it's been a bit of a busy day, but our cultural heritage is very much steeped also in commercial rationality. And you've seen a little bit of a snippet of some of the quality of the strategic and financial modeling capability we have in the business. We're not slaves to those models because they don't predict the future. They just sort of tell you what outcomes could possibly happen. We look at various other signals for the future in terms of guiding our business decisions, but we are steeped in commercial reality. So put it another way, we genuinely do try not to do dumb **** and you can count on that as shareholders of this business. So with that, I'd like to wrap it up. Thank you all for being here. Thanks for those who came down to Manapouri yesterday. I hope you really enjoyed that trip. It's fantastic. I love going to that place. Actually, it's a great reminder. When we're talking infrastructure projects, ROIs, all that sort of stuff, it's really cool. But it's really about vision and taking risks and getting big stuff done. So Manapouri is always a great reminder of that to us. And thank you for all those online. I'm not sure what their experience was like. But hopefully, you've found the whole thing informative and we look forward to doing another one probably sooner than 3 years. Thank you all. Cheers.