Four New Zealand utilities have signed a non-binding agreement to support utility Genesis Energy's coal and gas-fired Rankine generators at its 953MW Huntly power station through to 2035, underpinning New Zealand coal demand for a decade.

The company announced the deal on 19 June. It did not reveal the specific support mechanisms in the deal, but likely involves the other utilities making annual payments in exchange for the right to buy electricity from the company's Huntly power station as needed.

Genesis will use the support to maintain its Rankine units until 2035 and build a fuel reserve at Huntly. One of the generators was set to retire in 2026, and two others were previously set to shut early in the next decade. Maintenance will be required on the unit set to retire in 2026.

Genesis expects to finalise an agreement with the other utilities by the start of 2026, with the aim to have all Rankine units on line by mid-2026 in time for New Zealand's winter period.

Genesis' Rankine units at its Huntly power station play a supporting role in New Zealand's power system, firing up when renewable generation from hydroelectric, geothermal and wind sources falls.

The company is working on transitioning its Rankine units to biomass generators, but this is dependent on economic viability of black wood pellet prices. Indonesian sub-bituminous coal, which Genesis uses to power Huntly, is currently much cheaper than pellets.

By Avinash Govind