Wairakei site tour 22 October 2015 Dennis Barnes, Chief Executive Officer 1
Cautionary statement This presentation may contain projections or forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks. Although management may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realised. EBITDAF and underlying earnings after tax are non-gaap (generally accepted accounting practice) profit measures. Information regarding the usefulness, calculation and reconciliation of EBITDAF and underlying earnings is provided in the supporting material. Furthermore, while all reasonable care has been taken in compiling this presentation, Contact accepts no responsibility for any errors or omissions. This presentation does not constitute investment advice. 2
Welcome Welcome to Contact Energy. Our goal is ZERO HARM and your contribution to achieving this is vital. In everything you do always put SAFETY FIRST.» When in the field you must wear the safety gear provided» Please stay with your host.» If the alarm is sounded, follow your Host to the Emergency Assembly Point» Hazards: Your hosts today are We hope you enjoy you visit with Contact. 3
TWh New Zealand has added subsidy free renewable generation, which, in a period of flat demand, has displaced fossil fuels 40 National electricity demand 100% New Zealand electricity supply (based on GWh of generation) Coal 30 80% Gas Wind 20 60% Geothermal 40% 10 20% Hydro 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0% Agriculture/ Forestry/ Fishing Commercial (incl. Transport) Unallocated Industrial Residential 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total demand has remained largely flat since 2008 Strong migration and increased agriculture demand has offset the impact of energy efficiency Solar photovoltaic has had relatively little impact Recent signs of demand growth Methanol linked gas prices and historical uncertainty regarding long-term gas supply supported a transition from gas generation to geothermal and wind 4 Data source: Energy in New Zealand 2014, Ministry of Business Innovation & Employment
% generation (GWh) $m The investment in renewable generation has lowered Contact s cost of energy and requires limited ongoing capital expenditure 100% Generation mix 600 Capital expenditure 80% 500 400 60% 300 40% 200 20% 100 0% FY12 FY13 FY14 FY15 - FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Thermal Hydro Geothermal 5
Contact s 11 power stations have a capacity of 1,959 MW and generate around a quarter of New Zealand s electricity Ohaaki 50 MW 327 GWh Ahuroa 17.0 PJ 11.3 PJ Te Rapa 44 MW 189 GWh Te Mihi 166 MW 1,159 GWh Whirinaki 155 MW 0.03GWh Clyde 432 MW 2,299 GWh TCC 377 MW 329 GWh Te Huka 28 MW 204 GWh Peakers 200 MW 477 GWh Poihipi 55 MW 298 GWh Wairakei 132 MW 1,086 GWh Roxburgh 320 MW 1,819 GWh Name Capacity FY15 6
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec MW Contact s low cost renewable business combined with gas storage and peakers can support a retail business of around 7.1 TWh 1,400 Generation and load profile 1,200 1,000 800 600 400 200 0 Contact s CCGTs are optional depending on the availability of alternative supply or the ability to secure a spark spread and recover maintenance costs 7 Peakers Hydro (50th percentile inflows) TeRapa Geothermal Purchase position
Geothermal from the beginning 8
New Zealand s geothermal operations are significant by world standards 9
Contact maintains a strong capability in geothermal development and operation Geothermal capability is world class and current» A dedicated, internationally recognised subsurface team in Wairakei» Operational experience in one of the world s longest producing geothermal regions» Recent success in construction management, consenting and stakeholder engagement» Particular strength in stakeholder management Having previously concluded that overseas development was not suitable at this time we are focusing on using our teams skills to provide consultancy services internationally Tauhara remains New Zealand s next most competitive generation development but short term development seems unlikely given the demand outlook Renewable operations Recent developments 431MW Geothermal 752MW Hydro Te Huka (2010) Bioreactor (2012) Te Mihi (2014) 28MW 166MW 10
11How geothermal works
Field locations 12
Plate relationships 13
Turning steam in to power 1 Extraction Reinjection 3 Generation 2 Separation 14
The utilisation of geothermal generation extends beyond power generation 15 Te Mihi site tour 22 October 2015
Underground infrastructure 16
Typical wellpad 17
Constructing Te Mihi 18
Wairakei bioreactor how it works 19
Our OSIP programme is redefining process safety 20
with bow tie diagrams used to visualise the hazard being assessed 21