Meridian Energy’s Hydro Storage Hits 94% While Demand Drops 6.1% in May

Hydro Storage Recovery

Meridian Energy’s latest monthly operating report for May 2025 highlights a significant rebound in hydro storage levels across New Zealand. National hydro storage increased from 88% to 94% of the historical average by early June, with the North Island notably outperforming at 138% of average, while the South Island reached 88%. This improvement is underpinned by inflows that were 106% of the historical average for May, with the Waiau catchment exceeding expectations at 123% of average.

Demand and Weather Dynamics

Despite the positive water storage trends, national electricity demand in May 2025 was 6.1% lower than the same month last year, which was marked by unusually cold conditions. May 2025 was warmer than average, with mixed rainfall patterns, particularly below normal levels in much of the South Island, contributing to subdued demand. The New Zealand Aluminium Smelter maintained an average load of 523MW, reflecting steady industrial consumption.

Retail Sales and Customer Connections

Meridian’s retail sales volumes edged up by 0.7% year-on-year, supported by a 0.4% increase in customer connections during May and an 8.1% rise since June 2024. However, sales performance varied across segments, large business sales surged 10.5%, corporate sales rose 3.8%, while residential and agricultural segments saw declines of 4.4% and 8.1% respectively. This mixed picture suggests shifting consumption patterns amid evolving market conditions.

Generation and Pricing Pressures

Generation volumes fell 14.2% compared to May 2024, driven by lower hydro output despite increased wind generation. Correspondingly, the average price Meridian received for its generation dropped by nearly a third, while the cost to supply customers also decreased by 28.7%. Year-to-date figures show a 7% decline in generation and a complex pricing environment, with generation prices up 15.7% but supply costs rising 25.9% compared to the previous year.

Operational and Capital Expenditure

Operating costs remained relatively stable, with employee and operating expenses marginally higher than the previous year. Capital expenditure showed a balanced approach, with investment and maintenance spending reflecting ongoing commitments to infrastructure and business continuity. Meridian continues to provide weekly updates on lake storage levels, underscoring transparency and operational vigilance.