Mercury to invest up to NZ$1B to scale up its geothermal platform

• Committing to two geothermal appraisal wells
• Looking to add one TWh of new geothermal generation
• Strengthening renewables portfolio

Leading New Zealand energy company Mercury (ASX: MCU) is set to pour in up to NZ$1 billion as its ramps up its geothermal portfolio.

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Mercury is committing $75 million to geothermal appraisal drilling for two projects at existing sites near Taupō as part of its next growth phase.

Together, the projects at Ngā Tamariki and Rotokawa, could total up to $1 billion investment and add 1TWh of new geothermal generation – the equivalent of powering an additional 125,000 homes. First generation is targeted for 2030.

Mercury chief executive Stew Hamilton said the company’s geothermal growth would be progressed in phases, with major capital decisions to follow appraisal results, technical work and investment approvals.

“Scaling our geothermal platform will strengthen our renewable portfolio, support long-term contracting with major energy users, and help meet New Zealand’s growing demand for affordable, reliable and renewable electricity.

“We have a credible, investable and repeatable geothermal platform, a strong pipeline of opportunities, and the capability and partnerships to deliver.”

Mercury is funding the growth from its own balance sheet. It is expected to be a value accretive investment, supporting resilient earnings and balance sheet strength.

“Our investment in geothermal will add further long-term value for our customers, partners, communities, shareholders and New Zealand,” Mr Hamilton said.

Mercury’s near-term focus is on maximising value of conventional geothermal. It is also positioning for long-term next-generation geothermal options, including harnessing superhot geothermal as technology advances.

“Our team is match fit, having successfully completed the $220m expansion of the Ngā Tamariki Geothermal Station on budget and on time in March,” Mr Hamilton said.

“We have deep geothermal expertise, a strong track record of geothermal exploration, development and operations, and enduring, multi-decade relationships with our iwi partners.”

MCU is down 0.18% to $5.68. Mkt cap $8.108B.

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