Meridian Energy highlights strong generation growth despite softer retail volumes

About Meridian Energy

Meridian Energy Limited (ASX: MEZ) is the largest electricity generator in New Zealand and one of the leading renewable energy companies in the Asia-Pacific region. The company operates a portfolio of hydroelectric and wind generation assets across New Zealand, including major hydro schemes in the Waitaki and Waiau catchments.

Meridian’s business model combines renewable electricity generation with a growing retail electricity segment that serves residential, commercial and industrial customers. The company also owns the Powershop retail brand and supplies electricity to the New Zealand Aluminium Smelters facility at Tiwai Point, one of the country’s largest electricity consumers.

With a strong focus on renewable generation, Meridian continues to position itself as a key participant in the energy transition across the New Zealand electricity market.

Generation performance strengthens

Meridian delivered a solid generation performance during February 2026, reflecting stronger hydro and wind output compared with the same month last year.

Total electricity generation reached 1,082 gigawatt hours, an increase of approximately 5.2 per cent compared with February 2025. Hydro generation accounted for 949 GWh, while wind generation contributed 130 GWh, highlighting the diversified nature of the company’s renewable energy portfolio.

The improvement in generation volumes contributed to a strong year-to-date performance. For the financial year so far, Meridian’s total generation has reached 9,934 GWh, representing an increase of 12.6 per cent compared with the same period last year.

This increase reflects stronger hydro inflows earlier in the year as well as improved wind conditions across Meridian’s wind generation fleet.

However, electricity prices remained significantly lower than the previous year. The average price received for Meridian’s physical generation during February was NZ$41.3 per megawatt hour, compared with NZ$253.1 per megawatt hour in February 2025, reflecting a substantial decline in wholesale electricity prices across the market.

Lower electricity prices also reduced the average cost of supplying customers, contributing to a significant decline in retail supply costs during the month.

Water storage remains supportive

While inflows during February were weaker than average, Meridian’s hydro storage levels remained relatively healthy.

Combined catchment inflows for February were 72 per cent of the historical average, although inflows across the financial year to date remain significantly stronger at 129 per cent of historical averages.

Water storage levels across Meridian’s key hydro catchments also remained supportive.

The Waitaki catchment, which represents the company’s largest hydro generation system, recorded storage levels of 111 per cent of historical average at the end of February. In addition, the region retained approximately 95 GWh of snow storage in early March, despite snowpack typically melting by this time of year.

By contrast, storage levels in the Waiau catchment were lower, ending the month at 82 per cent of historical average.

Across the broader New Zealand electricity system, national hydro storage declined from 117 per cent of historical average in early February to 110 per cent by early March. Storage in the South Island fell to 102 per cent of historical average, while North Island storage rose to 169 per cent of average.

Retail business continues expanding

Meridian’s retail electricity segment continued to expand during February, supported by ongoing customer growth across both Meridian and Powershop brands.

Total customer connections increased 2.1 per cent during the month, extending the company’s annual growth in customer numbers to approximately 19.3 per cent over the past year.

Despite the expansion in customers, retail electricity sales volumes during February were 2.7 per cent lower than the same month last year.

The reduction in retail demand was largely driven by lower irrigation demand across the agricultural sector. Agricultural electricity sales declined 36.6 per cent year-on-year, while residential sales increased 27.9 per cent, small and medium business sales rose 9.2 per cent, and large business sales increased 17.6 per cent.

Corporate electricity sales volumes recorded a more modest decline of 3.6 per cent compared with February 2025.

Overall, retail electricity sales volumes for the financial year to date remain 8.9 per cent higher than the same period last year, reflecting the ongoing growth of Meridian’s retail business.

Market conditions and electricity demand

Electricity demand across New Zealand was relatively stable during February.

National electricity demand during the month was 0.5 per cent lower than February 2025, reflecting mild weather conditions and lower agricultural electricity consumption.

Weather conditions during the month were influenced by the “Valentine’s Storm”, a deep low-pressure system that brought widespread rainfall across many parts of the country. While rainfall was above average in several regions, inland areas of the South Island remained comparatively dry. The month was also recorded as the coolest February since 2012.

Operational conditions were also affected by outages on the high-voltage direct current (HVDC) link, which limited electricity transfer between the North and South Islands from 15 February through to 2 March.

Outlook

Meridian Energy enters the final months of the financial year with a stable operational foundation supported by strong hydro storage levels and continued growth in its retail electricity customer base.

Although inflows during February were weaker than average, the company’s year-to-date inflow performance and above-average water storage levels provide a supportive backdrop for electricity generation heading into autumn.

At the same time, softer wholesale electricity prices and fluctuations in retail demand remain key factors influencing near-term earnings performance.

Looking ahead, Meridian’s strategic focus remains centred on maintaining reliable renewable generation output while continuing to expand its retail market presence across New Zealand’s evolving electricity market.