Meridian Energy, New Zealand’s second-largest listed company, reported a 19% increase in net profit to $315 million for the first half of its fiscal year thanks to its renewable energy growth.

This was driven by positive changes in the value of the company’s hedging arrangements, offsetting a 9% decline in operating earnings to $422 million.

The drop in operating earnings was attributed to lower hydroelectric generation volumes in New Zealand and lower market prices in Australia. Hydro generation was down 7% due to lower starting storage levels and reduced inflows since October 2020.

Despite the challenging conditions, Meridian said its customer numbers across New Zealand and Australia now exceed 500,000, growing 3% since June 2020. The company also highlighted the continued strength of its Meridian and Powershop retail brands.

Looking ahead, Meridian announced it will soon begin construction of a new $395 million wind farm project in Hawke’s Bay. The Harapaki wind farm will be New Zealand’s second-largest, with 41 turbines generating 176 MW of renewable electricity – enough to power over 70,000 average households.

“Our decision to build the new Harapaki wind farm is our next step towards [the] solution” of decarbonizing the economy, said Meridian CEO Neal Barclay.

The wind farm project was previously deferred last July due to uncertainty around the future of the Tiwai Point aluminum smelter, Meridian’s largest customer. However, Rio Tinto’s recent announcement to extend the smelter’s closure to 2024 has provided the company with the confidence to move forward with Harapaki.

Meridian, which is over 51% owned by the New Zealand government, declared a 5.7 cent interim dividend, unchanged from the prior corresponding period.

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