Meridian Energy rules out winter drought as hydro inflows hit 28-year high

Author: Jamie Gray,
Publish Date: Mon, 15 Jun 2026, 11:30am

Meridian Energy spilling water at its Benmore Dam. It says hydro inflow levels are at their highest point in almost three decades.

Meridian Energy says there is no risk of a significant drought this winter as hydro inflow levels are running at their highest point in almost three decades.

The company said in its monthly operational report storage levels were well above average going into the end of the financial year, which ends on June 30.

To date, total inflows were 118% of the historical average, the highest financial-year-to-date inflows since 1998, Meridian said.

“Consistent inflows and careful management of the southern hydro lakes have removed any risk of significant drought this winter,” Meridian chief executive Mike Roan said.

“These conditions have also allowed Meridian to maintain solid momentum as we close in on the end of the financial year,” he said.

Last week, Genesis Energy said high hydro lake levels would allow it to shut its gas-powered turbine, the 400 megawatt Unit 5 at Huntly, to make gas available to commercial and industrial users over the second half of this year.

Current hydro conditions are in stark contrast to winter 2024, when low gas supplies and a dry and calm winter drove prices up to $820 a megawatt hour (MWh), forcing some factories to close and prompting calls for system changes.

Prices towards the end of last week were at around $60 to $70MWh.

Low wholesale powers rarely translate into lower power bills for retail customers because of the hedging contracts that protect customers from sharp price spikes.

Separately, power distribution prices or lines charges have risen sharply and will continue to rise to fund Transpower’s increased investment in the power grid.

Industrial contracts are guided by the ASX futures market, which shows prices easing over the next three years because of the increased investment in new power projects and last year’s deal between the big power generators to support Genesis Energy’s coal and gas-fired Huntly Power Station.

In its update, Meridian national hydro storage increased from 119% to 125% of historical average in the month to June 8.

South Island storage increased to 120% of average and North Island storage decreased to 160% of average by June 8.

National electricity demand in May 2026 was 1.7% higher than May 2025.

Excluding New Zealand Aluminium Smelters (NZAS), demand in May was 0.6% higher than in May 2025.

NZAS’s average load during May 2026 was 576MW, compared with 523MW a year ago, when Meridian and NZAS had agreed a 50MW demand response reduction deal.

Meridian’s retail sales volumes in May 2026 were 7.8% higher than May 2025.

Compared to May 2025, segment sales in residential were 20.4% higher, small medium business were 6.7% higher, large business 8.3% higher, agriculture 9.7% higher and corporate 1.2% higher.

Earlier this month, Meridian said it might soon be allowed to take more water from Lake Pūkaki for power generation after receiving a draft decision from a fast-track panel.

The company had sought approval under the Fast-track Approvals Act to allow access to water stored between 518m and 513m above sea level before the point where Transpower estimates there is a 4% risk of electricity shortage.

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.