3 July 2023 at 10:38 am
Central Canterbury‘s electricity distribution company, Orion NZ, reported record growth of new network connections in its annual result released today.
In the 12 months to 31 March 2023, more than 5,000 new households and businesses connected to the local power supply, reflecting strong regional growth and boosting the amount of electricity used in the region.
Central Canterbury’s electricity use is also weather dependent. Despite last year’s mild winter and lower than average irrigation during a wet summer growing period, the total power supplied for the year rose by 105 gigawatt hours to 3,521GWH, three times the increase of the previous year.
Orion Group Chief Executive Nigel Barbour says the company is on the verge of increases in network investment to support growth in electricity as the energy of choice and help decarbonise the region.
“There is a consensus being reached across the sector and more broadly: that the future is electric, and the electricity sector has a key role to play to decarbonise Aotearoa New Zealand.”
The recent report by Boston Consulting Group, THE FUTURE IS ELECTRIC - A Decarbonisation Roadmap for New Zealand’s Electricity Sector, supports the wider energy distribution sector’s view.
The report says unprecedented levels of investment will be needed to gear the sector up for decarbonisation, more than half of that, $22billion, in the distribution sector. It states that policy, regulatory, and market settings will be required to drive changes to deliver a much smarter, more flexible electricity system.
The company announced a $22m profit after tax for the year to 31 March 2023, $14m less than the previous year’s due to growth driving increased interest and depreciation expenses and inflation driving increased operating expenses.
Orion’s network capital expenditure increased by 24 per cent to $111m, $21m higher than the previous year on the back of the record customer growth.
Two major projects under way in the year were a $58m new Grid Exit Point at Norwood which will significantly augment Orion’s network capacity to accommodate growth – both from new developments and customer connections as well as growth driven by decarbonisation.
Orion also has a $33m programme to replace oil filled 66kV cables which are old technology and difficult to repair if a break occurs in an Alpine Fault event.
“Cyclone Gabrielle has reinforced the lessons learned from the earthquakes about the importance of measured and proactive investments in resilience, particularly as we look ahead to the future and our dependence on electricity grows,” says Barbour.
Orion delivered $32m in dividends to local community shareholders Christchurch City Council through Christchurch City Holdings Limited, and Selwyn District Council, $1m more than FY22.