Good morning, everyone. On behalf of the board and of all our people across New Zealand, I would like to welcome you to Contact's Annual Shareholder Meeting. My name is Rob McDonald, and I'm the chair of the Contact board. This year's meeting is a fully virtual meeting, a necessity given where we find ourselves in this COVID-19 world. I'd like to start today by introducing my fellow directors. Attending the meeting today we have Rukumoana Schaafhausen, Elena Trout, Victoria Crone, Sandra Dodds, David Smol, and Jon Macdonald. We also have Contact's Chief Executive Mike Fuge, Chief Financial Officer Dorian Devers, and Acting General Counsel and Company Secretary Kirsten Clayton, as well as representatives from our auditors, KPMG. Today's meeting will commence with an address from me as chair, and then I will ask Mike to speak.
Following this, we'll move to the resolutions that are outlined in the notice of meeting. We have five resolutions to put to the meeting today, and these resolutions will be decided by taking a poll. All shareholders can ask online during this meeting, and I would encourage you to send through your questions as soon as you can. This will allow us to answer these questions at the appropriate time of the meeting. To ask a question, click on the box that says ask a question. Following the instructions on the screen, you must register to vote before you can ask a question. Please note, questions may be moderated, or if we receive multiple questions on the same topic, they may be amalgamated together. If we can't answer the question in this meeting, we'll answer it in due course via email.
I'll provide you with further instructions in relation to voting as we progress through the meeting. If you encounter any issues, please refer to the virtual online meeting portal guide, or you can phone the helpline on 0800 200220. Let's get underway. On behalf of the Contact Energy Board of Directors today, I'm very pleased to be sharing some observations on the year of strategic ambitions and taking a brief moment to look ahead to the future possibilities and opportunities for Contact as we pursue our strategy to play a leading role in the decarbonization of New Zealand. 2021 has been a year in which we have achieved a lot, staring down some significant challenges, kicking off a phase of growth and change, continuing to deliver returns for our shareholders, and ensuring the company is well-positioned for future success.
Before I start, though, I'd like to acknowledge Mike and the Contact leadership team and everyone at Contact who has put in their energy in day after day. Even with the challenges of COVID-19, which continue to this very day, Contact's people have consistently delivered. Well done, and thank you. The Contact26 strategy was developed in the latter half of 2020 and sets out the company's plan of action for the next five years until 2026. We presented this to investors at our Capital Markets Day in May. The pursuit of this strategy sees Contact ushering in a time of significant change and adaptation as we position for growth. Our focus is on leading New Zealand's decarbonization efforts and leading the transition away from reliance on fossil fuels. New Zealand is privileged to start the decarbonization journey with a low carbon electricity system.
As demand for electricity grows with industry and transport decarbonizing, Contact will bring new renewable projects to market to meet that increased demand. These will follow in the footsteps of the world-class Tauhara geothermal project. The highlight of the year was the final decision to proceed with the Tauhara project in February. We're absolutely delighted that the market conditions allowed us to proceed with this important development that has been in the planning stages for more than a decade. Tauhara is not just important for Contact, but for New Zealand. It is a major post-COVID-19 private sector investment and will have a substantial impact on the country's transition to becoming 100% renewable energy. In March, we also successfully completed a NZD 400 million equity raise, which was heavily oversubscribed.
This was to initially reduce net debt and provide financial flexibility to fund the Tauhara project and other future growth projects. The capital raise gives us the flexibility to execute on up to NZD 800 million of additional projects beyond Tauhara. Now we are underway with a new NZD 200 million capital bond. The bonds will be certified as green by the Climate Bonds Initiative as part of our green borrowing program and will be New Zealand's first certified green capital bonds. This continues Contact's leadership in the sustainable financing area, with all bilateral bank facilities converted to sustainability-linked loans earlier this year and all eligible debt certified as green. The bonds provide investors with another opportunity to invest in Contact as one of New Zealand's leading renewable energy companies.
The proceeds from the issue of the capital bonds will be used to refinance Contact's maturing capital bond and to finance renewable generation developments and upgrades and other green assets. We believe hybrid securities, such as these capital bonds, are an effective capital management tool, and we intend to maintain these instruments as a key feature of the company's capital structure into the future. On the subject of growth projects, this year, we entered an exclusive partnership with the wind generation experts, Roaring40s, to develop a pipeline of large-scale wind generation assets. Also, we acquired the specialist geothermal service company, Western Energy Services, and in July, we released a report we've been working on with Meridian Energy that examines the potential to develop green hydrogen at scale in the South Island.
Projects like Tauhara and other potential geothermal developments, the work that Western Energy does to make geothermal production more efficient, the work that Simply Energy does to help new and existing industries access low carbon energy, examining the potential of hydrogen, and investigating the wind, best wind projects, will all play an important role in New Zealand's transition to a low carbon future. Contact's Contact26 strategy gives momentum to these important projects and many others across the company. This includes using automation and digitization to simplify experiences and expanding into new products and plans to help our mass-market customers decarbonize. Contact26 was underpinned by two significant shifts in our operating environment. First, Rio Tinto announced it would extend the operation of New Zealand's aluminum smelter at Tiwai Point, a major source of demand for the energy sector until the end of 2024.
The second, we see continued acceleration in stakeholder expectations and regulatory pressure around natural resource management, and particularly climate change and the drive for action to reduce New Zealand's CO₂ emissions. Contact is pleased to have played its part in helping to secure the Tiwai resolution, which has provided much-needed certainty that the transition away from this significant source of demand can be achieved in an orderly way. We supplied Meridian with a hedge contract for around 17% of the electricity needed to power the Tiwai Smelter. Late last month, some selective analysis emerged from the Electricity Authority's wholesale market competition review, questioning the merits of the deal and making some puzzling assertions about how the wholesale market might perform if the smelter abruptly shut its doors.
Frankly, we do not agree with the EA's criticism of the short-term deal to ensure the smelter continued its operations until 2024. Our view is that enabling Tiwai to stay open until at least the end of 2024 was the right thing to do for several reasons, including providing a window of certainty for an economic transition of Southland, allowing time for a plan for the ultimate exit of New Zealand's largest energy user. At a pragmatic level, it meant the specter of a large spill of water trapped in the lower South Island had been avoided while further investment by Transpower in the lower South Island is made. For Contact, it meant there was sufficient market certainty to invest in renewable energy projects like Tauhara that was green lighted in February and is under construction now.
I know Mike and the team will be providing Contact's view via the submission process, but I think it is important to note that we find the EA's concerns perplexing and unhelpful in terms of providing the market with the certainty needed to drive investment in the significant amount of renewable energy projects the country is going to need over the coming decades. There is also an implication that we only act in self-interest. That is wrong. Our approach is much more holistic. For example, in the case of the Tiwai deal, amongst other things, we consider the impact on Southland, the impact on New Zealand, the impact on the environment, and the impact on the country's decarbonization goals. We are very motivated to avoid an immediate, sudden short-term exit that would likely have been followed by a disorderly exit of thermal generation assets from the New Zealand grid.
As the recent blackout issue highlights, there is an ongoing reliance on thermal assets for some time. When they go, they need to go in an orderly way to ensure reliability of the grid and ensure investor confidence in the market is retained. The fact that not only Contact, but also other participants, have announced significant investments subsequent to the Tiwai renewal highlights the importance of a stable environment if New Zealand wants to transition to a more renewable system at pace. We strongly advocate that the New Zealand electricity market settings are appropriate and remain the envy of many countries for our ability to balance the three parts of the energy trilemma, security of supply, affordability, and sustainability. As Carl Hansen, the Former Chief Executive of the Electricity Authority, said in August this year, and I quote, "The electricity reforms of the 1990s delivered a world-class electricity system.
Today, electricity is more affordable here than in most other OECD countries. It is also green, with renewables generating more than 80% of our electricity. Only Norway and Iceland have more. Renewables will likely generate more than 90% of our electricity later this decade. The 1990s reforms also improved reliability. New Zealand achieves this trifecta of affordable, green, reliable electricity without using subsidies, possibly the only country in the OECD to do so. Renewables compete on a level playing field with thermal generation and win. There is a direct correlation between regulatory interference and markets getting distorted and malfunctioning, as we can see in Europe and elsewhere at the moment. We need to be sure any changes are well considered and ensure confidence is maintained to enable further investment in renewables.
Renewable investments require significant amounts of capital, and to maintain support from investors, we need to minimize uncertainty and ensure we do not tip up the confidence of the capital markets. Let's not make it harder to get renewable projects away at a reasonable cost. There is no doubt that over the long term, recent high wholesale electricity prices are not sustainable. An environment that solves this issue by encouraging more investment in lower cost renewable generation and technologies is a much better option than one that stifles by uncertainty and additional regulation. The market is signaling for people to invest, and they are investing. On the financials front, the last year has been a solid one, a year in which we have continued to deliver solid returns for our shareholders and made significant moves to ensure the company is well-positioned for the future.
We delivered a strong financial result after successfully navigating the potential departure of major energy users, the short-term issues around low rainfall in the hydro catchments, and the ongoing challenges around reliable gas supply. As signaled last year, the dividend policy was revised to target a payout ratio of between 80% and 100% of the average operating free cash flow of the preceding four financial years. This saw the board approve a final cash dividend of NZD 0.21 per share and delivers investors a NZD 0.35 per share annual dividend, down slightly from the NZD 0.39 per share in the previous year. On a personal note, I would like to acknowledge the departure of two directors from the board. In March, Whaimutu Dewes departed after more than 10 years on the Contact board.
In August, we farewelled Dame Therese Walsh from the board as she left to focus on her other governance roles. Both Wai and Dame Therese have made considerable contributions to Contact, and I'd like to thank them both very much and wish them both well. Wai remains an advisor to the company. In March, we were joined at the board by Rukumoana Schaafhausen. Rukumoana holds a range of governance roles at various organizations and has a strong iwi connection and experience. We are delighted to have her strong values, diverse thinking, and passion for Aotearoa on the Contact board. We also welcome Sandra Dodds to the board in September. Sandra resides across the Tasman and brings international infrastructure perspective as well as strong financial skills and executive and governance experience. The board is a robust environment, full of talented people and a wide range of perspectives.
You're in good hands. Thank you to Victoria, Elena, Sandra, Rukumoana, David, and Jon for your commitment and dedication around the board table over the year. I think we can all be proud of the important contribution Contact is making to New Zealand. It remains a strong participant in New Zealand's efficient, competitive energy market and will be a leader in the country's decarbonization. We are entering a phase of significant change, and your company is well-positioned for growth as we focus on leading New Zealand's energy transition. I'm looking forward to seeing what can be achieved in line with Contact26 strategy as we build a better future for New Zealand and create value for all our stakeholders alongside sustainable success for our shareholders over the long term.
Finally, I would like to express my thanks to our shareholders for tuning in today and for your ongoing support. As investors in Contact Energy, we appreciate your commitment to Contact's ongoing success, and we appreciate the opportunities to speak with you today. I will now invite Contact's CEO, Mike Fuge, to share his thoughts on the year. [Foreign language].
[Foreign Language ] I'm delighted to be sharing my perspectives on another action-packed and opportunity-laden year for Contact Energy. Having completed my first full year as CEO, I feel a huge sense of pride and satisfaction at all that the team at Contact has achieved over this last year. I'm proud that we have continued our strong performance and have positioned ourselves well for the future. As we look forward to FY 2022 and beyond, there is a lot more to do. It is a very exciting time to be involved, both in the electricity sector and the wider energy sector in this country. We've had a significant strategic reset with Contact 26, which was delivered in the first half of this calendar year and has ushered in an exciting new chapter for the business.
As Rob mentioned, at the heart of Contact26 is our commitment to building a better New Zealand and leading the country's decarbonization. We're doing this by growing demand for New Zealand's almost unique abundance of renewable electricity, both developed and undeveloped, developing new renewable, flexible electricity generation, decarbonizing our own portfolio, and creating outstanding customer experiences. The key enablers for this strategy are our commitments to strong environmental, social, and governance practices, our relentless focus on operational excellence, and the ongoing transformation of how we all work together. We are well-positioned to deliver on our strategy. We have a strong platform with our existing knowledge and capabilities in decarbonization. We have the renewable assets and development pipeline we need to provide firm and flexible electricity supply at a reasonable price. We have considerable flexibility in our portfolio, both now and in the future.
We also have the people with the passion, capability, and commitment to deliver. Advances in technology and the improving economics will accelerate the shift towards electrification across the economy. Fossil fuel input costs have risen rapidly, with carbon costs doubling over the past two years. Gas prices are rising as supply becomes less secure. Meanwhile, the cost of green technologies has fallen as new uses like green hydrogen emerge and electric vehicle production gains scale globally. The upshot is that clean, low-cost, renewable electricity will be increasingly attractive and in hot demand, and we are ready to respond. We are more than ready. We're in action. The decision in February to proceed with the development of the Tauhara geothermal power station was a huge milestone for the company and a highlight of the year.
An enormous amount of complex work went into the project ahead of the final investment decision. Research, preparation, discussion, listening, and some engineering wizardry that had to happen before an investment like this can ever get off the ground. It has been a long time coming with some of the people involved at Contact since the initial phase of investigation kicked off more than 10 years ago. Having visited the site several times this year, but not nearly as much as I would've liked, given the pandemic, it is hugely exciting seeing this take shape in the central North Island. The team have shown much perseverance, resilience, and patience in the pre-investment decision chapter, and now there is an enormous amount of mahi going into the construction efforts.
We have a fantastic team with both from within and beyond Contact, who will ensure it is a world-class power station that everyone can be very proud of. Delivering this project in these unusual times and amid disrupted supply chains should not be underestimated. Far, the project team have shown that they are more than up to the task in challenging conditions. Given the favorable reservoir conditions we have encountered in our drilling to date, we have commenced studies as to how we can increase the final capacity of the plant to as much as 165 MW. This may require additional cost, but I can assure you it will be very, very reasonable compared to the cost of a greenfield site. As we get conclusions from these studies, we will update you, of course.
Linked to Tauhara is a trio of long-term power purchase agreements announced with Genesis Energy, forestry products manufacturer Pan Pac, and pulp and paper company Oji. These amount to three terrific votes of confidence from customers who are willing to make long-term commitments to support renewable generation development in this country and are exactly the type of long-term commercial arrangements needed to underpin the acceleration of renewable energy investment here in Aotearoa. We want to grow demand for renewable electricity by displacing thermal generation, and deals like this help make that happen. That will ultimately be good for New Zealand, both in terms of reducing carbon emissions and keeping electricity prices as low as possible. It does not stop with Tauhara. We are actively looking at how we can bring more geothermal development forward in response to clear market signals. Long may these continue.
We are underway with innovative options, including increased generation efficiency from our existing assets. For example, new and improved turbines at Roxburgh, gas tolling deals, refined geothermal processes, and we are exploring options around wind, solar, and potential development of a battery in the North Island. We're also excited about our work with Meridian to investigate the potential of a large-scale renewable hydrogen production facility in the lower South Island. The Southern Green Hydrogen Project could be the trailblazer that sees a new industry deliver long-term economic value for New Zealand while helping to decarbonize our economy and parts of the world economy as well. We've received huge interest in the project from around the world and are currently in the process of refining the interest into a shortlist and establishing the best options for progressing this project further.
Another major focus is on our retail business, where our energy is going into creating outstanding customer experiences. This commitment has seen us grow our net promoter score across all of our customer touchpoints by 39 points over the last five years in a highly competitive market. Our plans for a high-profile brand campaign have been postponed due to production complications with COVID, but look out for that in the new year. In line with our plans to increase customer product connections by expanding into new products and services, we have now close to 60,000 broadband connections, and we're New Zealand's fastest-growing broadband provider. We had zero broadband connections four years ago.
A lowlight of the year was the unfortunate outages for more than 30,000 households on the 9th of August, including around 5,000 Contact customers who we provided with a credit as a gesture of goodwill for the inconvenience they suffered that night. We had all of our available generation in the market at the time, including our hydro generation in the Clutha scheme, geothermal generation in the central North Island, and thermal generation at Te Rapa, Whirinaki, and the gas peakers at Stratford. We have been actively contributing to the various investigations that have ensued in the August event, and we're very keen to better understand the details of exactly what happened. One thing does seem clear, though, is there needs to be a better way of communicating outages like this to everyone who might be affected, especially consumers.
We know that the success of our strategy hinges on our people being ready and excited to execute. We have a fantastic team. Engagement is high, and we are building our capability to support growth. We are building on our transformative ways of working, or TWOWAs program, as we call it, and continue to re-engineer the way we work. Our strong and improving engagement survey results show that we are definitely moving in the right direction, but we will need to keep evolving and improving. Our team has also continued to demonstrate great resilience in the face of ongoing COVID restrictions and level changes throughout the year. Our Auckland-based team is well set up to work from home, but has undoubtedly been doing it tough as the lockdowns continue in the City of Sails.
With the support of the leadership team and the board, I have been a passionate advocate for encouraging our people to get vaccinated. We, of course, welcome the government's expanded mandates around requiring vaccination, and we're looking forward to the details of the looming guidance around risk assessments for roles that will require vaccination. We have roles across the company where our own risk assessments have shown that up-to-date vaccination status will be very important in maintaining our lifeline utility capability. More broadly, we may arrive where others have already done so. One of the key ways of keeping indoor environments shared by groups of people safe is to only allow fully vaccinated individuals into them. We'll be moving into the consultation phase with our people very soon on this. We've had some changes in our leadership team this year.
Our Chief Customer Officer, Vena Crawley, left in April 2021. Our Deputy CEO, James Kilty, left in August to become the CEO of PowerCo. Our Chief Corporate Affairs Officer and General Counsel, Catherine Thompson, resigned this month. All have made significant contributions to Contact over a long time, and we wish them well in the future. We've also had a series of senior appointments, with Jacqui Nelson joining the leadership team in July 2020 as Chief Generation Officer, and recently moving into the role as Chief Development Officer. Jack Ariel joined the leadership team and took up the role of Major Projects Director in April. Jack is responsible for overseeing the execution of all major surface engineering projects, starting with the Tauhara Power Station development, and brings a wealth of international experience.
Iain Gauld joined the leadership team as Chief Information Officer in September, alongside our Chief Digital Officer, Tighe Wall. In October this year, Matt Bolton was appointed as our Chief Retail Officer. It is great to have the bulk of the leadership team now in place and poised to deliver on the growth and transformation agenda that we have already set out earlier this year. This year, we delivered a strong financial performance with EBITDAF up 24% year-on-year to NZD 553 million, and profit up significantly to NZD 187 million from NZD 125 million a year ago. Operating earnings were up by NZD 107 million on FY 2020, partially offset by increased depreciation on thermal generation stations and higher tax to pay on the improved financial performance.
We did an outstanding job in securing gas supply to ensure we could continue to generate electricity when renewable generation options were constrained by weather for most of the second half of the year. Although we expect continued reliance on continued higher cost fuel sources over the short term, these will be displaced over the next few years as more than 3 terawatt-hours of low-carbon renewable generation plants come on stream, including our own geothermal development at Tauhara. Operating free cash flow for FY 2021 was NZD 371 million, up 28% on FY 2020, with higher operating earnings and lower interest costs. This was partially offset by higher sustaining business capital spending to support our scheduled geothermal outages.
Our results have been underpinned by continued smart channel management of our flexible portfolios of gas-fired and renewable assets, continued operational excellence, strong asset availability, and a strong financial position. You will have seen from our operating stats that we have made a strong start to this year as well across the board, maintaining the momentum from FY 2021 into FY 2022. While we can be proud of our FY 2021 performance and results and the ground we have taken to assure future growth, there is absolutely no room for complacency. Our retail landscape continues to change with the sale of Trustpower announced in June. We're looking forward to the challenges and changes this brings to the market. After all, competition drives us all to evolve faster, and it brings out the very best in us for our customers.
We continue to see volatility in the wholesale market too, underpinned by the increase in gas shortages and gas field issues over the past three years, and the impact on investment that accompanies the Tiwai Point smelter's threatened closure. There is no doubt flexible thermal generation will be required as New Zealand transitions to 100% renewable. Market stability encourages investment in sustainable generation. We, as an industry, have made a good start with more than two terawatt-hours of low-carbon renewable generation projects set to come on stream across the sector in the next three years. As an industry, we will need to expedite sensible decarbonization while maintaining security of supply and affordability. One action we've taken on that front is to start engaging about an option to consolidate New Zealand's thermal generation arrangements into one entity, which we have dubbed Thermal Co.
As the market transitions to lower carbon solutions, we're likely to see suboptimal levels of capacity from intermittent renewables, for example, for demand peaks or dry periods. Additional flexibility from fast start thermal generation will continue to be needed during this transition. However, asset owners will struggle to make economic returns as the frequency of use inevitably declines. We believe consolidating thermal assets into a new Thermal Co could encourage electricity generation from coal and gas-fired plants in ways that are aligned with New Zealand's decarbonization objectives, ensuring affordable, ongoing, stable electricity supply. We'll be sharing more details on our thinking around this next week. There is a further stake in the ground for our industry with the goals and challenges set out in the Climate Change Commission's advice to the government in June. Our response of Contact is unequivocal. We are absolutely up for the challenge.
Let's get moving. It's a hugely exciting time to be involved in this electricity sector. As a country and as a company, we have some audacious goals. We are confident we can deliver, and we're looking forward to it. Now some brief acknowledgements before I finish. I would like to thank Rob and their board for their unfailing support over the last year. A huge thank you to the Contact team for their commitment to doing a great job. None of this would have been possible without our people. A big thank you to our partner suppliers. A thank you to our neighbors. We live, work, and operate in communities across the country, and we know our actions impact on the people and environment around us. We'll keep striving to be the neighbor you absolutely want to have.
Thank you, of course, to you, our investors. We absolutely appreciate your continued support of Contact, both now and into the future. [Foreign Language]
We now come to the formal part of the meeting, that is requiring resolution which are outlined in the notice of meeting. As I mentioned, shareholders will be able to cast their vote using the electronic voting card received when the online registration is validated. To vote, you will need to click "Get Voting Card" within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking for, against, or abstain on the voting card. Once you have made your selection, please click "Submit Vote" on the bottom of the card to lodge your vote. Please refer to the virtual meeting online portal guide or use the helpline specified if you require assistance. Voting will remain open until five minutes after the conclusion of the meeting.
Each resolution set out in the notice of meeting is to be considered as an ordinary resolution. This means it must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. The outcome of the proxy votes will be displayed for your information after voting on all the resolutions. Our first four resolutions today relate to the election of directors. I will run through each of these resolutions in turn and invite each of the four directors to speak to the meeting. We will then pause to take questions on all of these four resolutions. If you have a question, I encourage you to submit it now so that we can address these questions in an orderly way.
Under the NZX Listing Rules and the company's constitution, a Contact director must retire and stand for re-election by shareholders every three years. The first resolutions today relate to the re-election of two existing directors in this manner. Resolution one, re-election of Jon Macdonald. It is now my pleasure to move that Jon Macdonald be re-elected as a director of Contact. Jon joined the Contact board in November 2018. Jon is the director of the People Committee and a member of the Development Committee. A brief biography of Jon is set out in the notice of meeting. The board unanimously recommends that shareholders vote in favor of his re-election. We will now hear from Jon.
[Foreign Language] Thank you, Rob, and good morning, everyone. My name is Jon Macdonald, and I'm very pleased to have this opportunity to stand for re-election as a director of Contact Energy. It's clear to me that Contact's job is an important one, and that affordable and reliable electricity generated with low or no emissions is fundamental to the quality of life of New Zealanders. I believe that Contact is in good shape in making good progress, in particular with the build underway for the Tauhara Geothermal Power Station and the pipeline of potential further renewable energy development around Wairakei. Though we have so much more to do on a number of fronts, including building more renewable generation, further improving our retail offer, and being more useful to all our customers. For example, helping them better manage their power requirements.
This setting affords Contact great opportunity if we respond well and help to lead change, but it also exposes us to the risk of being left behind. In this environment of change, I believe I have a lot to contribute to Contact Energy. I'm a technologist and engineer by trade, and earlier in my career, I worked for Deloitte and HSBC. I then spent 16 years with Trade Me, including 11 years as its CEO. For the last two years, I've been a professional company director, and I hold board roles across a range of businesses. The smallest being a high-growth fintech called Sharesies, through to Mitre 10 and Contact Energy at the more established end. I've developed a deep experience in digital businesses, technology, and the changing expectations of Kiwi consumers towards transparency, immediacy, and a greater ability to make informed choices.
I believe that my prior experience as the CEO of a public company equips me to support and, at times, appropriately challenge Mike and the team. I also bring governance experience, having served on the board of NZX for eight years and through my other current directorships. In addition to my time so far on Contact's board, I've had prior exposure to the electricity sector as NZX operates New Zealand's wholesale electricity market under an agreement with the Electricity Authority. Finally, I have a good grounding in the technical and engineering concepts behind electricity generation, transmission, and consumption, having completed an honors degree in electrical engineering. I've very much enjoyed my three years on the board to date, and I'm very confident that I'll be able to continue to give this role the time and attention it deserves.
I plan to keep working hard for Contact Energy, and I believe that we are well equipped to deliver on our Contact26 strategy to help decarbonize New Zealand and to deliver great returns to shareholders. Thank you for your consideration, and if you choose to have me continue as a director, thank you in advance for your support looking ahead.
Thank you, John. Resolution 2, re-election of David Smol. It is now my pleasure to move that David Smol is re-elected as the Director of Contact. David joined the board in October 2018. He is the Chair of the Development Committee and a member of the Safety and Sustainability Committee. A brief biography for David is set out in the notice of meeting. The board unanimously recommends that shareholders vote in favor of his re-election. We will now hear from David.
[Foreign Language] Thank you for the opportunity to be considered for a second term as a director of Contact Energy. I joined the board in 2018 as an independent director. I now chair the board's Development Committee, and I'm a member of the Safety and Sustainability Committee. I'm standing for re-election today because of my commitment to Contact and to our strategy to lead New Zealand's decarbonization and the growth opportunities that flow from that strategy. I've spent a big part of my career in the energy sector as an energy executive, as an energy consultant in the U.K. and Europe, and in advising successive New Zealand governments on energy policy. A highlight of my career was to be part of the team that first set Contact up in the mid-1990s. I'm an economist with an in-depth understanding of the economic, commercial, and regulatory drivers of energy markets.
I've had extensive experience as a senior executive, notably as Chief Executive of the Ministry of Economic Development and of the Ministry of Business, Innovation and Employment. I'm now an experienced company director with roles that span the infrastructure, financial, and health sectors. The next few years are filled with exciting opportunities for Contact to add shareholder value while helping New Zealand rise to the challenge of climate change and also in delivering outstanding service to our customers. I would welcome a chance to be part of the board for the next stage of our journey. [Foreign Language] Thank you.
Thank you, David. Our next resolutions relate to the election of two new directors who have joined the Contact board during the year. These directors, who were appointed by the board, must stand for election by shareholders at the first meeting following their appointment. Resolution three, election of Rukumoana Schaafhausen. It is now my pleasure to move that Rukumoana Schaafhausen be elected as a director of Contact. Rukumoana Schaafhausen joined the board in March this year. She is a member of the Audit and Risk Committee and the Safety and Sustainability Committee. A brief biography of Rukumoana Schaafhausen is set out in the notice of meeting. The board unanimously recommends that shareholders vote in favor of her election. We will now hear from Rukumoana Schaafhausen.
[Foreign Languag e] It is my privilege to address you today. I acknowledge you, our shareholders, and also our stakeholders for your part in keeping our whānau and community safe as we respond to the impacts of COVID-19. I also express our gratitude for your ongoing support of the company. [Foreign Language]
I'm seeking election as a director of Contact Energy today because I want to serve or continue to serve the vision of Contact to build a better Aotearoa through decarbonization, while at the same time addressing the challenges of safe supply, affordability, and environmental protection as we seek to balance energy, supply, and demand. Globally, the energy sector is undergoing significant disruption driven by the convergence of key technologies, namely solar, wind, and battery energy storage to address pressing societal issues. COVID has taught us that risk is interconnected and that we cannot think discretely about individual risks. Now more than ever, I believe the role of leadership has never been so important. There needs to be agility and collaboration between board leadership and senior management.
We all need to be able to co-create robust strategies, including with our stakeholders, to be able to reorient from the way things used to be to a range of possible future scenarios. Contact Energy is well-positioned to respond as a leader in this space. I believe my leadership experience of working across sectors will also have a positive impact as a director of the company. My governance experience of over 25 years across iwi, public and private sector boards positions me to make a strong contribution to the strategic direction of Contact, as outlined in the Contact26 strategy that you will hear multiple references to today. As we move forward, I think it is important for directors to engage in meaningful dialogue at the board table around what it means to deliver a meaningful, actionable, and authentic ESG agenda.
Companies are part and parcel of the social and economic fabric of our communities. We therefore need to give confidence to investors on the actions we are taking with regards to sustainability, diversity, and inclusion. Directors, in my view, also need to demonstrate an understanding of the interconnectedness of risk. This is critical in terms of how we handle risk, how we handle opportunities, and how we deal with multiple stakeholders. This will require directors to be more courageous and exercise strong leadership. Data and digital are also transforming how we operate and interact with our customers and engage with the regulators. It is therefore important for directors to have greater digital literacy to ensure that we are ready to contribute to strategic discussions on these issues. As a director, this is but a snapshot of what I will be striving to be and do on your behalf.
Thank you for considering my submission, and if successful, I look forward to serving the company for another term. [Foreign Language]
Thank you, Rukumoana. Resolution four, election of Sandra Dodds. Finally, it is my pleasure to move that Sandra Dodds be elected as a director of Contact. Sandra joined the board in September this year. She is the chair of the Audit and Risk Committee and is a member of the People Committee. A brief biography for Sandra is set out in the Notice of Meeting. The board unanimously recommends that shareholders vote in favor of her election. We will now hear from Sandra.
[Foreign Language] My name is Sandra Dodds, and I'm a proud New Zealander, born in Invercargill and talking to you from Melbourne, Australia. I'm honored to be standing for election as a non-executive director and chair of Audit and Risk for Contact Energy. In my view, there are five key qualities that shareholders are looking for in their representatives, and these are being able to look at the big picture that is strategic, knowing what good governance looks like, being independent, being an ambassador for the company, and being committed with lots of energy. I believe that my financial background, combined with my experience as an executive and now as a professional director, have equipped me with the skills to be able to deliver on these qualities. I have a Bachelor of Commerce from Otago University, and I'm a Fellow of Chartered Accountants Australia and New Zealand.
Current directorships currently include Beca, OceanaGold, and Snowy Hydro. Interestingly, the first two of these companies operate in New Zealand. Prior to becoming a professional director, I led complex infrastructure businesses providing services and constructing assets in New Zealand, Australia and Asia. This experience was invaluable for me. I was attracted to Contact Energy because of its exciting and important growth journey whilst being a leader in the decarbonization of New Zealand. It would be a privilege to be part of Contact Energy's journey as I believe that my skills and experience will add value and assist in achieving Contact's goals. Thank you for the opportunity.
Thank you, Sandra. Now I invite discussions on the resolutions concerning the director elections. We have received one question in advance of the meeting about Sandra Dodds's appointment. This question is: Why are we appointing a board member who is resident in Australia and on the board of a potential competitor? I am happy to answer that question. I would say we are excited about the valuable experience Sandra brings to the Contact board. We see her international infrastructure experience as a plus, and this, combined with her strong financial expertise, makes a great addition to Contact board. Snowy Hydro isn't a direct competitor, so we don't see a conflict here. I'd also say, and you just heard that, Sandra sees herself as a passionate New Zealander. Are there any other questions that shareholders would like to ask Jon, David, Rukumoana or Sandra?
Hi, Rob. No, we do not have any further questions on these resolutions.
Thank you. The last resolution to be considered relates to the auditor. I now move that directors be authorized to fix the fees and expenses of the auditor. KPMG is Contact's auditor. This resolution proposes that the board be authorized to fix the remuneration of the auditor, which is the conventional practice for New Zealand listed companies. It reflects the fact that the level of the auditor workload, and therefore fee, may change from time to time to take into account changes in the company's size or complexity or changes in the law. I now invite discussion on the resolution regarding the auditor's fees and expenses. Are there any questions?
No. No questions on that resolution, Rob.
Thank you. If you haven't voted already, please now cast your vote. Voting will be open until five minutes after the close of the meeting. For the information of shareholders, here is the proxy votes received for all five resolutions. The results of the poll will be announced on the NZX and ASX later today. We now move to general business. This is your opportunity to ask questions on anything we have not already covered. We will address questions that have already been submitted. You can continue to submit questions online. If we run short of time and are unable to answer your questions today, we will endeavor to respond to you after the meeting. Are there any questions?
Yes. The first question asks: Will you consider a share buyback program instead of a reduced dividend? This is more tax efficient for long-term investors.
Well, the feedback from investors generally has been that they like dividends. And a regular buyback scheme would actually be treated as taxable. But there's a much more fundamental reason why we, you know, are not considering a buyback, and that is we are in a growth phase with fantastic projects in front of us, and we've also just raised equity, and so introduced a DRP. So it'd be quite unusual then to have a buyback.
The next question asks: Could you update us on the Tiwai Smelter? Are you assuming it is going to stay, or are you preparing for it to close in 2024? How would its closure affect Contact's bottom line?
The smelter has an electricity contract with Meridian. Remembering we're effectively a subcontractor. That contract runs to December 2024. With current aluminum pricing, smelting is currently a profitable activity. We're preparing for a future without the smelter, including advancing discussions on alternative demand sources. We also look to supply the highest value industries as we grow demand for New Zealand's renewable resources.
The next question asks: I think it's highly likely that as worldwide energy systems become green, the Tiwai Point Smelter will not close. What strategy are you developing for this possibility? What are you planning as a possible alternative use should it become available?
Well, we all hope that the global energy system does become more green, and that's what the environment needs. We are absolutely planning for alternatives. Our strategy is about growing electricity demand and decarbonizing New Zealand. Green hydrogen, data centers, process and space heat conversion are all examples of new demand to offset Tiwai when they exit.
The next question asks, "Electrification of the vehicle fleet and or the use of hydrogen for transport purposes will require a substantial increase in electricity generation. Given the long lead times for new plant installation, irrespective of the method of generation, what is Contact doing to address future demand?
Contact is working to ensure that there's a pipeline of the best renewable projects that we can bring to market to support new demand. We believe we've already had the best pipeline with our geothermal build options, and indeed, we're underway with the Tauhara project. We're also looking at wind through our work with Roaring40s and looking at grid-scale batteries. The new equity raise undertaken this year provides the balance and flexibility to build new renewable generation.
The next question asks, "Should Contact Energy be getting involved in a high-performance data center project with the Lake Parime Company, seeing as how it appears to be an organization solely devoted to facilitating cryptocurrency transactions?
The Lake Parime contract was considered, and debated, and approved by the board. Contact undertook due diligence on Lake Parime. I'll actually ask Mike to comment further on Lake Parime.
Sorry. Sure. Just to reiterate Rob's comment, it was discussed extensively. Lake Parime doesn't just do cryptocurrency mining. It does do processing of meteorological data and various other data processing activities. It is only small scale. It was very much to see how we could interact with a data center. Because one of the things they do bring, which is really important in the future for the New Zealand electricity sector, is that they do provide flexible demand. They are able to be turned off in periods of high demand in the rest of the country when the rest of the country needs that electricity. For those reasons, and considering the whole of the proposition, that is the reason we went for it.
Thanks, Mike. Are there any other fur-
Yes.
Sorry.
Yes. Yes, there are, Rob. A couple more. The next question asks, "Apart from understanding the outage incident on the ninth of August, what is being done to guarantee the continuity of supply in a world that is now totally reliant on electricity supply?
I'm gonna hand over to Mike again for answering that question.
Look, in terms of the ninth of August, there's a whole range of things we're looking at. As a company, we're looking at obviously investment in batteries, as well as the underpinning generation that our geothermal generation development pipeline will bring. Also, as Rob alluded to and I alluded to in our speeches, the discussion around ThermalCo, ensuring that thermal assets were brought together and deployed in one entity so that they could provide that surety to the industry as the industry invests rapidly in new renewable generation. There's also a key opportunity to directly answer the questions that incident on the ninth of August raised.
Thanks, Mike.
The next question asks: What was behind the push for minority shareholders to switch their shareholding to the Sharesies platform?
Well, as small parcel shareholders will know, when and if they decide to sell, it can be a very expensive endeavor. There's the opportunity here to move small parcel shareholders over to Sharesies, which is a very low-cost platform. From our perspective, I think it was the right thing to offer shareholders. Of course, if they don't, you know, wish to move over, there's no obligation at all.
The next question asks: Is there any thought or desire to offer shareholders an extra discount to join Contact's broadband service?
I'll hand that one to Mike.
We give a cracking deal on broadband already. We're delighted when our shareholders back us in this. We're very proud of the offering we make in broadband and across our broader electricity and gas products. Absolutely, come on and join us. You're very welcome.
Thanks, Mike.
This is the last question: With the increasing demand for electricity, can Contact help consumers to find an instant hot water product that actually works well with electricity?
Again, that's a consumer question. I'll hand back to Mike.
We're looking at a range of new products and innovations in the home space, which over the next 18 months. Fair to say, we're always looking at new innovations. I think heat pump hot water heating is one very efficient option we're looking for that makes sure that our homes are warm and that we do indeed get a hot shower at night.
Thanks, Rob and Mike. There are no further questions.
Okay. Now, as there are no further questions, I now declare the meeting closed. Thank you very much for your attendance at the shareholder meeting today and for your continued support.