Morning, ladies and gentlemen. I'm Barbara Chapman, Chairman of the Board of Genesis Energy Limited. On behalf of my fellow directors, our Chief Executive and his team, and all Genesis employees around New Zealand, welcome to our 2021 annual shareholders meeting. Continuing restrictions on gatherings due to COVID-19 mean we have once again proceeded with a virtual only event this year. I thank you for your understanding and continued participation in Genesis' annual shareholder meeting. As Chairman, I regret not being able to engage with you in person, but invite you all to make use of our other channels to provide your feedback on our board's performance. Today's meeting is being held online via the Computershare online meetings platform. This allows shareholders, proxies, and guests to attend the meeting virtually.
All attendees can watch a live webcast of the meeting and read the company documents associated with the meeting. In addition, shareholders and proxies may ask questions and submit votes. If you have a question to submit during the meeting, please select the Q&A tab on the right half of your screen at any time. Type your question into the field and press Send. Your question will be immediately submitted. Should you require any assistance, you can type your query and one of the Computershare team will assist through the chat function. Alternatively, you can call Computershare on 0800 650 034. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting.
Please also note that your questions may be moderated, or if we receive multiple questions on one topic, amalgamated. Finally, due to time constraints, we may run out of time to answer all of your questions. If this happens, we will answer them in due course via email. You will also be able to vote on today's resolutions using the Computershare platform. I will refer to the instructions on how to vote when we reach that point in today's meeting. Bryce Henderson of Deloitte is with us online today as our company's auditor on behalf of the Auditor General. Notice of the meeting has been duly given to shareholders and we have the required quorum. I now declare the 2021 annual shareholders meeting of Genesis Energy Limited officially open. Thank you all for joining us today. I will quickly run through the agenda for this morning.
Firstly, I will provide a brief overview of the board's key highlights of the year. Genesis Energy's Chief Executive Officer, Marc England, will then provide you with a more detailed overview of our company's performance, strategy, and our targets for the coming financial year. There will then be an opportunity for you to ask questions of the board and the executives. Finally, we will move to the formal business of today's meeting. At that point, I will outline the process for the discussion and voting on the three resolutions in the agenda. Shareholders will then be provided with an opportunity to raise any items of general business that may lawfully be put to the meeting. If there are any additional discussion points that you feel haven't been covered in today's meeting, please reach out to the board directly at the email address board@genesisenergy.co.nz.
To begin, let me introduce your board of directors. Maury Leyland. Maury joined the Genesis board in 2016 as a member of the company's Audit and Risk Committee and the Human Resources and Remuneration Committee. Maury is a qualified engineer and brings a wide range of governance and operational experience in large corporations in infrastructure companies. In particular, her skills focus on risk and crisis management in human resources. Thanks for joining us today, Maury. Tim Miles. Tim joined our board in 2016, coming to us from his previous role as Chief Executive of Spark Digital. He's a member of the Human Resources and Remuneration Committee and the Nominations Committee. Tim has had a long career in customer and technology-focused roles at the most senior levels, both in New Zealand and internationally, and applies that insight and scrutiny to all of the board's work. Thanks, Tim. Doug McKay.
Doug joined our board in 2014 and is a highly- experienced commercial executive and director. He chairs our Human Resources and Remuneration Committee and is a member of the Nominations Committee. As well as his extensive experience in the energy sector, Doug has also been CEO of numerous local and international companies such as Lion Nathan and Goodman Fielder, and was the inaugural CEO of the Auckland Council. Thanks, Doug. Paul Zealand. Paul also joined our board in 2016 and is a member of the company's Human Resources and Remuneration Committee and the Nominations Committee. Paul has over 40 years experience in the oil and gas sector, including senior executive and chief executive roles at Shell and Origin Energy. In particular, he brings strong expertise around health, safety, and environmental management and advice around operational risk. Thank you, Paul. James Moulder.
James joined the board in 2018 and is a member of the company's audit and risk committee. James has strong governance experience, having held a number of non-executive board and advisory board positions in the electricity sector. James brings strong industry experience in carbon and energy asset management to your board. His background advising the electricity industry's regulatory bodies also strengthens our governance. James is presenting himself for re-election today. Thanks for joining us, James. Kathryn Drayton. Kathryn joined the Genesis Energy board in March 2019 and is the chair of the company's audit and risk committee. Kathryn is a former senior partner at PwC, specializing in mergers and acquisitions, culminating in her leading the assurance and advisory divisions in Central and Eastern Europe. Her extensive cross-sector governance experience also includes multiple directorships across the healthcare, infrastructure and energy sectors. Thank you, Kathryn, for joining us today.
Joining me in this presentation is Genesis CEO Marc England, who will speak shortly, and our Corporate Affairs Officer, Matthew Osborne. Our Chief Financial Officer, Chris Jewell, departs this week for a new challenge after eight years with the company. We thank him for his outstanding contribution to Genesis and wish him very well for the future. My presentation will touch on a number of matters that Marc will discuss in more detail. You will have the opportunity to ask questions on these matters towards the latter part of the meeting. Ladies and gentlemen, I am proud to lead a strong and capable board of directors, each of whom gives generously of their time, providing their extensive experience and specialist skills for the benefit of the company, our staff, our stakeholders and the wider community.
I'm also presenting myself for re-election today as a director and look forward to continuing to help guide Genesis Energy into the future. Genesis Energy has a meaningful purpose: to empower New Zealand's sustainable future. Our aspirations are to be our customers' first choice for energy management and to be an active enabler of New Zealand's energy transition. To achieve this, we need to be a top performing company. This year our EBITDA was NZD 358 million, an increase on last year's NZD 356 million. Underlying earnings were NZD 75 million, up from NZD 53 million, and free cash flow was NZD 191 million, up from NZD 168 million. Dividends grew for the seventh year in a row. The full year dividend was NZD 0.174 per share, representing a 6.8% gross yield.
Looking ahead, our FY 2022 EBITDA guidance is NZD 420 million-NZD 440 million. These positive results are pleasing considering the challenges and opportunities faced by management and the board this year. The issues the board dealt with were reflective of the current environment and our ongoing focus on our future. In addition to the strong focus by management and the board on the implications of COVID for our people and our customers, a key consideration for the board this year was a strategic review of our interest in the Kupe Gas Field. This review resulted in our decision that it was in the best interests of Genesis to retain our part ownership of Kupe. The board also considered and approved the decision to enter into litigation with Beach Energy around the issue of liability for the payment of carbon credits.
We did this with careful consideration of the best interests of shareholders, given the magnitude of the value to the company had the litigation resulted in Genesis not being required to meet those ongoing carbon obligations. As you will know, we did not win this litigation and we're directed to resume our historical position of paying for the carbon liability. An external review of our decisions and processes around this litigation is almost finalized, and it is pleasing to note that interim findings were supportive of the due diligence and governance processes undertaken by management and the board. Challenges and opportunities like the Kupe review and the Beach litigation that I've just mentioned require a strong corporate governance focus and a highly- skilled board.
In recognition of the fact that Genesis directors have not received any increase to directors' fees since 2016, this year we undertook a market benchmarking study to consider whether those fees were commensurate with the size and complexity of the business. The fees received by Genesis directors were largely in the lowest 25% of comparable companies. Accordingly, we have put a resolution to shareholders today to increase those fees in order to ensure that we can continue to attract and retain excellent directors for your board. A high performance board is critical for the ongoing success of Genesis. With the last formal review of board performance having been undertaken in 2016, this year the board committed to conducting an external review process to ensure our ongoing effectiveness. The review included a whole of board evaluation as well as evaluations of the chair and individual directors.
The outputs and recommendations from this process are being discussed by the board, and individual directors' feedback will be used for ongoing professional development purposes. Being customers' first choice of energy management is one of our top priorities, and the continuing effects of COVID-19 have led us to find new ways to support them. Over the past year, we've developed a dedicated team to support the elderly and those with medical or financial circumstances requiring extra care. I'm very proud of Te Tira Manaaki o Kenehi, the Genesis caring team, and the empathy they show in finding solutions to our vulnerable customers' unique circumstances. We frequently receive good feedback about the capability of our executive team. We don't take this for granted and continue to invest in our top people.
This year, we began an executive development program providing assessments and coaching to ensure our executives to continue to develop their talents and abilities in leading their teams. Ultimately, this process, along with the board evaluation process, will help the company perform at its best and maximize shareholder returns. Diversity and inclusion principles and practices remain a strong focus within Genesis and are a particular priority for Marc. This year, Genesis updated its diversity and inclusion policy and is delivering on a strategy to promote and raise awareness of our diversity and our cultural capability. We've started the process towards earning the Rainbow Tick, have developed a te reo Māori resource for staff, and have continued to close the gender gap and the leadership gaps.
The recommendations of the Climate Change Commission and subsequent policy settings will have far-reaching implications and provide a framework to transform New Zealand society and the economy. We supported the commission's work with submissions that advocated for a 30-year national energy strategy that takes into account the interconnectedness of the system and enables the right sequencing and prioritization of actions to avoid unintended consequences. If we get it right as a country, we can mobilize investment and markets to accelerate our transition and deliver a dependable, low- cost and low emissions energy system that underpins the country's transformation. In conclusion, along with my fellow directors and our Genesis Energy team, I would like to thank you for your support of our company over the past year.
I have every confidence that your board, overseeing our strong executive team, will position the company as an essential and profitable part of New Zealand's energy future, while at the same time living up to the company's purpose and vision. It's now my pleasure to invite your Chief Executive, Marc England, to speak. Welcome, Marc.
Kia ora, everyone, and thank you, Barbara, for this kind introduction and for providing an overview of some of the challenges and opportunities the company has faced in what has been a demanding year. The journey through COVID-19 has proven to be a marathon rather than a sprint, and I'm proud of how our staff have adapted to fluctuating alert levels and varied restrictions to continue supporting our customers and keep our sites operational. They've also stepped up to be part of our proactive response to the pandemic. Our staff at Huntly, for example, undertook saliva testing as soon as the level four lockdown was initiated in August. Due to some staff receiving training and accreditation in sample collection earlier in the year, we were able to remain relatively self-sufficient.
An effective saliva testing regime through levels 3 and 4 at Huntly gave our staff peace of mind and ensured this critical part of New Zealand's energy network remained operational. We also joined other businesses this month in calling on the government to allow us to import rapid antigen tests to give additional health protection for staff and help ensure workplace continuity. The government responded and has agreed. For Genesis, the immediacy of rapid antigen testing will add another layer of protection to the saliva testing we'll continue to use. Huntly's specialized workforce plays an essential role in New Zealand's energy security, and antigen testing will give our staff reasonable confidence before they step on site that they are safe to do so.
My address today has four main elements: a summary of our financial performance in the 2021 financial year, the state of the energy market and Genesis' role in it. Genesis' business success over the past year, and finally, our future steps. As a business, we remain committed to maximizing shareholder value as we navigate the challenges of COVID-19 and New Zealand's transition to a low-carbon future. First, an overview of the numbers. Genesis' FY 2021 EBITDA was NZD 358 million, impacted by the decision to utilize the carbon fixed price option and the unfavorable Beach arbitration decision relating to carbon obligations. Together, these two items lowered EBITDA by NZD 60 million and impacted underlying earnings by NZD 43 million. However, they are one-offs.
We achieved underlying earnings of NZD 75 million, up from NZD 53 million in FY 2020, and free cash flow was NZD 191 million, up from NZD 168 million in FY 2020. Genesis has proactively protected shareholder value. The full year dividend amounts to NZD 0.174 per share, up 1.2% on last year's NZD 0.172 per share, representing a 6.8% gross yield. Our dividend policy has been revised to a range of 70%-90% of free cash flow from one based on maintaining dividends in real terms. The change in policy ensures our dividends will better reflect underlying business performance over time, and introduces the flexibility to make funds available to invest in delivering in a low-carbon future through our Future-gen strategy.
Recognizing the importance of dividends to our investors, the change in policy does not represent a departure from our aim to grow dividends year- on- year. FY 2021 full- year dividend represents a payout ratio of 96% of free cash flow or 76% when the impact of the carbon fixed price option and Beach arbitration decisions are excluded. The FY 2021 full- year dividend was the seventh consecutive year of dividend growth. FY 2022 EBITDA guidance, as Barbara outlined, is to be between NZD 420 million and NZD 440 million, subject to normal hydrological conditions, any material one-off expenses or other unforeseen circumstances.
The key drivers for this guidance are increased renewable generation delivered through a full- year of the YPP wind farm in operation and a return to normal hydrology, as well as portfolio optimization delivered through recontracting activity and growth in LPG. For a detailed breakdown of our FY 2021 performance and dividend policy, I recommend you visit the Investor Center, where our FY 2021 investor presentation is available for you to review. In this presentation, our Chief Financial Officer, Chris Jewell, and I talk in detail about the company's financial performance as well as the broader underlying themes I'll touch on today. We took bold steps this year, committing to remove 1.2 million tons of carbon emissions by 2025, tied to the internationally recognized benchmark of limiting global warming to below 1.5 degrees centigrade of pre-industrial temperatures.
This supports New Zealand's commitments under the 2015 Paris Agreement. The targets have been verified by the Science Based Targets initiative, and Genesis was the first New Zealand generator retailer to use them in committing to the 1.5 degrees goal. This will mean a 36% reduction in carbon emissions from electricity generation between 2020 and 2025. Despite the market experiences in the last financial year, we remain steadfast in our commitment to meet these ambitious targets. How? Well, through our Future-gen strategy, as you've heard us talk about before. The objective of that strategy is to economically displace base load thermal generation with 2,650 gigawatt hours of new renewable generation by 2030, enough to power 380,000 households a year.
We achieved the first chunk of that in March with the completion of the Waipipi wind farm in South Taranaki, and we've since signed a 20-year power purchase agreement with Tilt Renewables for all the electricity generated from that site, 450 GWh per year, approximately. In August, we announced the signing of a similar agreement with Tilt Renewables for the Kaiwaikawe wind farm to be built in Northland by early 2024, giving us an additional 230 GWh per year. Same month, we came to an agreement with Contact Energy to purchase around 500 GWh per year of geothermal generation from its new Tauhara plant near Taupō, and announced our intention to develop utility scale solar of 750 GWh per year.
Combined, these projects will already create about 2,000 gigawatt hours per year of new renewable generation, putting us well on the way towards our goal of 2,650. The emissions trading scheme and cost of carbon is working to its intended effect here. With the price of carbon increasing the marginal cost of thermal generation, building or procuring new renewable generation has become economically viable. Our Future-gen projects are clear examples of the impact of the ETS in driving the build of new renewables. The critical role of Genesis in providing security of supply through the transition to renewable energy was highlighted by this year's difficult market conditions. Extremely low hydro levels and tight supply of gas meant Huntly once again became an essential backstop and supplier of energy to other major gentailers and small retailers.
Supply contracts, sometimes known as swaptions to meet their shortfall from renewable sources, ballooned from around 154 GWh in FY 2020 to nearly 820 GWh this year. The value of Huntly's fuel flexibility and our position at the intersection of the electricity and gas markets enabled us to reach supply agreements for gas with Methanex and Ballance Agri-Nutrients as well. These agreements help support energy security through winter and ensure steady electricity and gas supply to our customers and other market participants. Reliable gas supplies will likely remain a challenge for the sector through a transition to a lower carbon future. Similar but greater issues are now playing out in Europe, with tight gas supplies playing havoc with energy markets in several countries.
For the time being, in New Zealand, coal will occasionally need to be used to fill any shortfall in hydro, wind or gas. Now, the good news is, while we had to burn a lot of it this year, we believe the electricity sector has reached peak coal. With new renewable generation being enabled by Genesis and our competitors, we expect much less coal-based thermal backup generation over the next few years. However, fuel diversity remains important. We need options should there be a shortage of one or more source of electricity in the future. The North Island blackouts in early August were a reminder that short-term demand spikes may need different markets or generation solutions going forward. We're cooperating with the various inquiries into that event as part of the industry's shared accountability for the outages.
This week saw the release of the Electricity Authority's review of competition in the wholesale market, which recommended a number of options to address what the EA considers to be pricing issues affecting consumers and generators. We're now considering the report and will make submissions by the deadline of the eighth of December. For now, suffice to say, Genesis considers it crucial the electricity sector can continue to invest in new renewable energy to replace baseload thermal and support New Zealand in decarbonizing. Indeed, the strength of the gentailer model is that it enables investment in generation for the future. About NZD 4 billion has been committed to new renewable projects by the 4 gentailers, including our Future-gen projects mentioned earlier.
We also have the capacity to develop energy storage, and the South Island Lake Onslow project has been put forward as one such energy storage option, which stores water for hydro generation should it be needed. We believe there may be better alternatives closer to the North Island population centers with the greatest electricity demand. Huntly's Rankine units, for example, could be extended beyond 2030 to burn biomass as an alternative to coal. We're planning to run a trial there early next year, and if successful, we'll start to look seriously at biomass supply, transport, and storage options. Our belief in our ability to play our part in addressing climate change is reflected in our refreshed purpose, strategies, and vision.
Our purpose, as Barbara said, which is to empower New Zealand's sustainable future, will be achieved through strategies of building for the future, navigating the transition, and delivering more from our core. This will enable us to realize our dual vision of being customers' first choice for energy management and being an active enabler of New Zealand's energy transition. Genesis is taking a leadership role in transitioning New Zealand to a low emissions economy built around affordable, reliable, and renewable electricity. Our sustainability commitments align with five of the 17 UN Sustainable Development Goals, Decent Work and Economic Growth, Affordable and Clean Energy, Reduced Inequalities, Partnerships to Achieve the Goals, and Climate Action. We literally walk the talk, and in late 2020, with the move to our head office in Auckland, demonstrated that. We moved to a Six Green Star rated building.
We did away with staff car parks, removed company cars from salary packages, and replaced our corporate car fleet with the EV car-sharing start-up, Zilch. We provided staff with a 25% subsidy for public transport, a carpool hub in South and West Auckland, and free shuttle service from the eastern suburbs, and with top-end changing facilities to encourage staff to ride, run, walk, or work. I'm pleased to say this week, we won an industry award for that effort. What was the result? Well, our people loved it. Compared to the travel routines in our previous offices, which had car parks for everyone. We've seen a 50% increase in people taking public transport or using EVs. A 102% increase in biking, running, walking, or e-scootering to work.
81% of staff have signed up to the public transport subsidy, and there are 984 less carbon contributing trips each week, a reduction of 71%. Staff have collectively reduced carbon emissions by 158 tons per annum so far. We also turned our attention to the commercial fleet, becoming the first company in the Southern Hemisphere to put the new fully electric FUSO eCanter on the road, delivering LPG gas cylinders to customers around Auckland. We're now gathering information about the technology, charging, maintenance, and cost of running the electric truck as we work towards converting more of our fleet over time. We've not only transformed from within, we want to build a sustainable ecosystem around us. We're part owner of the carbon zero-certified retailer, Ecotricity, and the EV car share scheme, Zilch.
They run their businesses at arm's length without interference from us, but we share experiences and learn from each other as we work towards similar goals. In the community, we've partnered with the Pūhoro Charitable Trust, supporting Māori students at schools near our generation sites to choose subjects and career pathways in science, technology, engineering, and math, known as STEM. The first three programs launched this year at schools close to our Tongariro and Waikaremoana power schemes. We help nurture other kinds of residents near our hydro schemes, the endangered whio or blue duck. On the tenth anniversary of our partnership with the Department of Conservation this year, we re-signed to support DOC's efforts just for another five years, providing funding for predator control.
It was encouraging to hear the number of breeding pairs of whio had tripled during our support, with almost 1,700 km of river now protected. We support our staff in championing causes close to their hearts for our volunteer program, with more than 200 staff taking up the opportunity to volunteer this year, a 25% increase on last year. This is reflective of our team's strong commitment to sustainability and climate change across the business. Nearly three-quarters of staff told us in a survey this year that it was very important for them to work for a company that values sustainability. Through volunteering, sustainability can take many forms from driving cancer patients to their treatment, working in community kitchens or schools, to ocean conservation projects.
On top of this, having the right type of leaders across the business is an important part of our future success. We operate in a rapidly evolving environment where more than ever we need leaders at different levels who are capable of adapting and have a growth mindset. This year, we launched the Adaptive Leaders Program. This is strengthening our ability to navigate and handle the complexities of change and develop high-performing teams that are aligned, empowered, and accountable. So far, more than 90 leaders have successfully completed the course, and we are already seeing the results ripple across the business. Our employee culture is having an impact. Our staff net promoter score rose from 59% to 71% in the past year. On to digital transformation.
We're embarking on another stage of our digital transformation that will deliver a significant step change in the way we connect and provide services to customers. We have already undertaken work towards being a more data-driven organization that over time will enable us to make better decisions and unlock new insights into our operations, markets, and customers. Customers continue to engage with EnergyIQ in greater numbers. This year, there were more than 11.6 million interactions and over 275,000 unique users, while we focus on making things easier for customers across a raft of services from moving home to paying bills and ordering LPG bottles. We're also providing insight via data from smart meters that enables customers to make decisions that matter to them.
In recent years, our smart meter electricity customers have had access to a wealth of features that allow them to manage their use hourly, forecast their consumption, provide usage spike alerts, and breakdown of their consumption at an appliance level. A new feature now allows customers to understand which times of the day have high or low-carbon generation, allowing them to plan their use to reduce carbon emissions if that suits them. In a New Zealand first, we also started rolling out smart meters for reticulated gas customers in May. We expect to install 6,000 by the end of this year. The goal is to have 90,000 more rolled out by mid-2024. Bill estimates and manual readings will no longer be required. We're working to fully integrate EIQ features so customers have full visibility across their energy use, whether that be gas, electricity, or LPG.
As more New Zealanders turn to electric vehicles, we've adapted our billing to accommodate charging and reward our customers for being sustainably minded. Our energy EV plan offers electricity rates that are 50% lower at night from 9 P.M. to 7 A.M. Their entire household power is cheaper. We're working on more innovative solutions for residential and business customers to support the move to EVs, so look out for announcements over the next 6 months. As Barbara mentioned earlier, the effects of COVID-19 have thrown into sharp relief the difficulties faced by many of our customers. We established Te Tira Manaaki o Kenehi, the Genesis caring team, initially for those who are medically dependent, elderly, or in hardship, and extended it to anyone financially impacted by COVID-19. Our staff take time to understand each person's circumstances and find the right solution for them.
This includes partnering with various social agencies with specialist skills to provide help if needed. Our proactive approach with customers showing early signs of financial stress reduces the risk of debt accumulating in a way that becomes damaging. As a result, we've seen a dramatic decline in bad debt expense and a 40% reduction in disconnections. Our Power Shout rewards initiative has proven extremely popular, with 23% of new customers saying Power Shout was their reason for choosing Genesis. This year, we gave away more than 2.5 million hours of power and passed the milestone of giving away 10 million hours since the program was introduced in 2018. It was an ideal bonus to extend to customers during lockdown, and we offered 280,000 customers a five-hour Power Shout to support their time at home.
One of the biggest residential customer projects this year was migrating 320,000 to new plans to create options for customers on how they want to be rewarded, such as eBill or dual fuel discounts. This followed a government recommendation to remove prompt payment discounts, which were judged to be disadvantages to some customers. The new plans are fairer for all, while still rewarding customer behavior. We also supported our small and medium enterprise customers through lockdown, reaching out to more than 1,300 who did not have smart meters to suggest they send us a manual meter read, so their next bill reflected lower usage. Our LPG deliveries were considered an essential service, and we're grateful to our team for continuing to supply our residential and business customers through lockdown.
By the end of the financial year, our LPG business had grown to over 80,000 customer connections, up from 56,000 in FY 2018. As a result of these initiatives and more, our brand continued to resonate with consumers, finishing the year as the most considered and preferred energy brand in the market. Among customers, 62% see Genesis as being first to market with new technology to help people manage their energy use, up 19% on the previous year. Regarding sustainability, 42% now say we are committed to reducing our emissions and impact on the environment, a 10% lift year-on-year. Both these markers reflect our key strategies of being customers' first choice for energy management and executing our Future-gen plan. As we progress towards a more sustainable future, Huntly still has a key role to play.
It's ideally located for major electricity generation close to demand, with high voltage connection and an abundant local workforce. Genesis has partnered with a number of external experts to test the viability of biomass conversion at Huntly. A trial burn of biomass is planned for early next year, and if successful, we'll assess its commercial viability then. We're also embracing the responsibility we feel to help high-emitting sectors and our large business customers reduce their carbon footprint. Through energy insights and decarbonization roadmaps, we can provide useful information, tailored recommendations, and help in putting them into action. By year's end, we grew the number of customers we engaged with it this way from 6% to more than 20%. We partnered with Christchurch-based carbon and engineering consultants, detail, on a more than 20-year audit.
Sorry, more than 20 energy audits for medium to large companies across agriculture, manufacturing, tourism, and local government. Building on the work we've done with large customers, we're piloting a new digital platform that will help small and medium enterprises measure their energy consumption, as well as the costs and emissions from electricity they use. This allows them to understand their emissions profile and identifies ways to reduce it. This is empowering New Zealand's sustainable future. In terms of our own carbon offsets, Genesis elected to make use of the carbon fixed price option of NZD 35 per ton to meet its calendar year 2020 carbon obligations under the New Zealand Emissions Trading Scheme. Electing to use the fixed price offer allowed Genesis to retain 2.2 million New Zealand units, improving Genesis' future carbon hedge position.
Our forecast emissions are now hedged through to FY 2029, and the cumulative financial benefit is expected to be NZD 50 million-NZD 100 million, an improvement of EBITDA over the period from FY 2022 to FY 2027. The government's emissions reduction plan, released this month, recognized that a national energy strategy will be an important foundation for decarbonizing New Zealand, and that electricity will play a key role. We would like to see the government move quickly to collaborate with business in defining this strategy with the strong commitments to a more renewable energy system supported by clear policies. As I've outlined today, the electricity sector, part of the energy system but not the whole energy system, is well-positioned to be the engine room for the country's transition to a lower carbon energy future, supporting carbon-intensive industries such as transport and those using process heat through electrification.
We look forward to working with the government to ensure the right settings are in place to maximize the opportunity electricity presents for energy. Recognizing the leadership role Genesis has and will continue to play in New Zealand's transition to a low-carbon future, this month, we launched the Climate Change Hub on our website. This is a meeting place for ideas, inspiration, and practical guides on how energy can help reduce emissions for us as individuals through our businesses and our country. We'll be sharing the Hub stories through our communications networks, and I urge you to visit the Hub to sample the variety of articles already there. We'll continue building it as New Zealanders find new and innovative ways to play their part in addressing climate change.
To conclude, Genesis is a consistent and reliably performing company with a strong, credible management team that executes the company's strategy well and delivers to our stated objectives with an eye to the future. Genesis' diverse generation portfolio of wind, hydro, and thermal enables us to be flexible in our support of the market and consistently deliver good returns to investors regardless of the weather. This gives us a unique value proposition that enables us to adapt to market conditions far more effectively than our competitors. The critical nature of our role in using this overall energy security has been highlighted this year. At the same time, we embrace the opportunity to take a leadership role in supporting New Zealand toward a low-carbon future, be that through our own Future-gen strategy of renewable generation, assisting our business customers in decarbonizing or contributing to the government's emissions reduction plan.
We've proactively addressed the challenges COVID-19 has thrown at us, protecting our people and our operations, and we'll continue to adapt. I thank our staff for the flexibility, dedication and willingness to go the extra mile for our customers and our business through difficult times. I want to add a special note of thanks to our departing Chief Financial Officer, Chris Jewell. In his eight years with Genesis, Chris has been instrumental in many of the decisions we've taken as a company. He stepped into the CFO role in 2016, despite finance not being his core background, and has led the function superbly over the last five years. Chris is heading off to be CFO of Lodestone Energy, a start-up solar developer, motivated by the opportunity to be part of something from the beginning.
We wish him all the best, and we'll be following his progress with interest. Genesis' Group Manager of Planning and Reporting, Emma Oettli, has kindly agreed to be Acting Chief Financial Officer as I continue to search for a permanent CFO. Emma is a member of the Chartered Institute of Management Accountants and has more than 15 years financial experience. She formally takes the seat on November 1. I look forward to having her at the executive table. The future for Genesis is exciting, exploring new options for Huntly, building new renewable generation, and finding new ways to help our customers manage their energy use. We look forward to our continued support and as we empower New Zealand's sustainable future. I'll now hand back to Barbara.
Thank you very much, Marc. We now have an opportunity to take questions on the company's performance and management for the year ended 30 June 2021. Questions are now open, so please use the question functionality in the Computershare slide. Depending on whether you are viewing this on your computer or via a smartphone app, the layout might be slightly different. To ask a question, select the Q&A tab, type your question into the box at the bottom of the screen, and press Send. We also have members of the executive here to address specific operational queries. Please note your questions may be moderated or if we receive multiple questions on one topic, amalgamated. We will attempt to get through as many of the questions we can in the allocated time.
If you have any questions we don't have time to address, please contact us at board@genesisenergy.co.nz. When asking your question, please state your name, whether you are an individual shareholder or whether you are a proxy holder or shareholder representative. Matt, are there any questions?
Thank you, Barbara. We have a few questions. Our first question is from Gordon Wallace. He's asking, "If coal prices were to fall by, say, two-thirds, would you consider purchasing a low-cost open pit coal mine so that you can be vertically integrated and can burn old king coal to power the EV craze?
Thank you, Mr. Wallace. I'm going to hand that question to Marc.
I think I can firmly say no. As you saw in a chart I presented earlier, we see the need for coal dropping off materially over the next few years. We've just gone through a really high use period that was exceptional. With all the new build renewables coming our way, coal will continue to provide an emergency backup reserve, and we do have a stockpile at Huntly for the time being. That may change over the next 10 years, but certainly over the next 5 years. Even the EV craze, if adoption reached our most optimistic levels, would not drive a rationale for that. We see ourselves as needing to be flexible on the fuels that we use to drive electricity generation, but I can't see us moving upstream into vertically integrating into a coal mine.
Thank you, Marc.
Our next question is from Vaughn Crimmins, and he is asking, "How much is the cost of wind generation? How many years is the working life of wind generation plant? And when decommissioning, how much of that plant is recyclable?" He also adds to that question, "Are we aware of the bird loss due to wind generation along the Makara coast?
Thank you, Mr. Crimmins. That's a reasonably detailed operational question. Marc may have some insights, and if not, we will get back to you on that one. Marc, do you have anything to add?
Yeah, there's still a lot of debate going on the timeframe for wind farms, but it's more than 20 years and could be up to 30 years. You know, technology could be a driver of change as well as degradation in the actual physical assets. You may be aware we've signed power purchase agreements for 20 years, so we're confident that they're at least 20 years. I'm not gonna disclose the price. The price of wind has been coming down globally for many years as the scale economies have grown.
The price has many factors that drive it or the cost, the long run marginal cost of a new wind farm depends on the location, proximity to grid connection, size of the wind farm, and where you are in the world as well, depending on what your spectrum is. We sign contracts with fixed prices, but we don't disclose what they are. I can safely say they are materially below the cost of base load thermal generation, and that's the point we've made around the Future-gen strategy and why our goal is to displace base load thermal generation. It has a carbon benefit, but it also has an economic benefit. We are conscious of bird life and those that build the wind farms have to go through a very strict consenting process.
You know, everything is a trade-off in life, and we have to be conscious of those trade-offs. There's biodiversity to worry about. There's also the climate to worry about. I'm confident that the RMA processes that review that make sure that all things are considered in the journey.
Thanks, Marc. Matthew.
We have a question here from Richard Marston. Relates to the Beach arbitration. The Beach arbitration went badly against the company. Somebody must be responsible for the situation the company was in. Will the review be made available to shareholders?
Well, thanks very much for that question. At this stage, I'm not planning for that review to be public. This was a review commissioned by the board to understand whether our processes and our governance around the decision that we collectively made with management were right. We've done that externally. We're using EY to help us with that. They've been very thorough in their process. What I do know this far is that they believe the process we went through to come to this conclusion was very thorough and very appropriate. You do need to understand that we had been paying, Genesis had been paying for that carbon liability all along. This process in itself that we went through was to really check whether that was right.
'Cause we'd taken the view from the contract that we had, looking backwards, that perhaps that wasn't the right course of action. It was very appropriate to go through this process and to challenge whether indeed it was our responsibility to cover that liability or whether that was Beach's responsibility. Had we not gone through the arbitration process, matters would have gone on as they had, and the outcome would effectively wouldn't have been a lot different to where we ended up today. Matt, any other questions?
Thanks, Barbara. There was a similar question from a Howard Zingel regarding the Beach arbitration. Hopefully, Howard, that answers your question also. If not, feel free to drop us a further question. Thanks. Next question we have is from the New Zealand Shareholders' Association. With the inevitable results of climate change, energy companies and shareholders will likely need to fund the replacement of the Huntly thermal coal burning plant. What can shareholders expect will need to be their contribution in that regard?
Marc has addressed the option that we're considering around biomass fuels as an alternative power source into Huntly. Marc, is there anything you wanted to expand on in relation to the future of Huntly?
Just that we see the location of the plant is really critical to the future, whatever it's generating and whatever fuel source it has. And you have to look at energy more broadly, as we've said, rather than just electricity. If you just look at electricity in New Zealand, it's about 5% of New Zealand's emissions. And as we progress through the Future-gen strategy and our competitors also build new renewables, we're gonna quite quickly be less than 2% of New Zealand's emissions. That final last bit, which could be really critical to ensuring reliable electricity that is low-carbon, can support other parts of the economy and other parts of the emissions pie is really critical. I always urge people, don't focus on the most visible thing.
Think about the big picture and the bigger systems thinking that we need as part of an energy strategy to say, "What's gonna give us the lowest carbon outcome for New Zealand?" It isn't necessarily removing Huntly Power Station.
Thanks, Marc. Matt, any more questions?
Thanks, Barbara. Next question is from Oliver Crollmann. His question is: Would you consider developing and offering bio LPG?
Shall I take that, Barbara?
Marc, I'm gonna pass that one to you too.
Yeah. We are actively involved through the LPG Association with what the future of gas could be in New Zealand. There are lots of R&D going on around the world around green gases. There's lots of discussion around hydrogen as well, and those are two different things. We're gonna stay close to that. There may be a plausible future for biogases in the gas network as piped gas or and/or in LPG bottles in the future. There is some research going on in other countries in the world around how does LPG become more renewable. We'll stay close to that.
Our purpose of empowering New Zealand's sustainable future, as I've talked about, is partly about giving customers the choices to make the choices they want to or the information to make the choices they want to make. We'll continue to do that, and if it's a green LPG versus electrification, we'll allow them to make those choices and give them the information they need to do it. Undecided yet whether that's a real future that we're gonna fully get behind, but it's definitely something we're staying close to.
What I would add is the energy transition going on around the world creates really exciting opportunities for Genesis, and Marc and his team are actively looking at those transition opportunities. Matt.
Next question is from the New Zealand Shareholders' Association again. We note the experience of the board members, but have some concern that the board needs more energy, electricity, company expertise in this dynamic, changing industry as we now move to a more sustainable energy future. What is the board doing to improve this?
Thanks for that question. At the moment, we have three people on our board, so three out of seven, who do have very strong backgrounds in the energy sector. Paul Zealand has a strong background in the oil and gas sector. Catherine Drayton has been involved as a director of an energy company, and James Moulder has worked in an energy company and worked around energy authorities and regulators and in the carbon markets for quite some time. I do believe that our board is strongly represented in energy at the moment, and obviously, it's in our mandate to make sure that all the skills around the board are complementary for that. If, for example, you think about the work that we're doing around the energy transition, a lot of that's infrastructure type work.
We've got Doug McKay on our board, who's got a big history in infrastructure. As the Chair of the Board, I'm really comfortable with the mix of skills that we have on the board today and that they are relevant for the issues being faced by the company today. Obviously it's a requirement of us to make sure we do stay current as this is a changing and dynamic sector. Matt.
Next question. Question from Warwick Gould. We have been told in the news that power bills have increased by NZD 200 per year due to the subsidy to the Tiwai Point smelter. Is this really the case for Genesis customers, even though Genesis is not supplying power to the smelter?
There certainly has been a lot in the media of late around Tiwai and the impact of that on the average consumer's bill. I'll pass to Marc about the billing process inside Genesis and what we look at as we put pricing out to our customers.
Yeah. No, Warwick, I would start with the fact is that prices have not gone up. What the analysis that came out from the Electricity Authority this week said is prices might have gone down if the Tiwai smelter had shut earlier this year. I think what's probably missed in that analysis is constraints in getting power from the South Island up into the North Island. We looked at this a few years ago when there was some concern that Tiwai might shut and there would be a reduction in wholesale prices, but there would also be some constraints to getting that power into the North Island. It doesn't necessarily hold that Tiwai leaving would suddenly have a material impact on pricing in the wholesale market, North Island, but then also it wouldn't necessarily flow through to customers very quickly anyway.
Just in the way that the high wholesale prices over the last 6-9 months in New Zealand have not flowed through to retail prices. Very few consumers have actually received a retail price increase in the last year. In fact, at Genesis, there were no above-the-board residential price increases for electricity over the last 12 months. The wholesale price rose, but there's some protection, particularly from the gentailer model in that where generator retailers can hold their nerve and not pass through the volatility as quickly as might otherwise have happened.
Thanks, Marc. Matthew.
Howard Zingel. Given we are burning a lot of coal, is nuclear energy not a better option?
Matt, would you mind please repeating that? It just got a bit crackly.
Given we are burning a lot of coal, is nuclear energy not a better option?
Thank you. I'll just be very clear that we have no plans to get involved in nuclear energy. We won't be doing that.
I would just add, Barbara, coal in New Zealand is used to back up the renewable system. It's not running all the time. In fact, for the last few weeks, there's been no coal running in New Zealand. Nuclear power is base load. It's always on. You can't turn it off and on quickly. In other countries where coal is used as base load and it's always running, it could be an alternative and is in some countries already an alternative. I think nuclear will be a big debate as the climate change agenda ramps up over the next few years. It's definitely not as an alternative to the rare use of and the firming capacity of coal in New Zealand, which is not the same source.
Thanks, Marc. Actually, if I could just pop back to that, shareholder association question. I'd forgotten to mention that Maury Leyland Penno has also worked in the energy industry, and she has been on the board of Transpower, so that makes four out of the seven. Sorry about that, Maury. Matt, back to you.
Thanks, Barbara. A question here from Margaret Gordon. She is asking, "The smart meter enhancement is a good move. Will you also support the introduction of smart grids and the input of electricity from neighborhood networks of solar panels?
I agree. I think the smart meter move is excellent. It certainly does provide greater opportunities for customers to really get involved in their own energy management. As to the second part of the question, I'll hand to you, Marc.
Yeah. We're the only retailer rolling out gas smart meters at the moment, and we just believe that the data and the insight that it gives us that we can provide to customers is worth it. We don't operate in the grid, so we're not a distributor or a network provider, but absolutely supporting smart grid. I think the ability to take lots of data these days to analyze it and to provide insight is phenomenal. A smarter grid could allow efficiencies to be gained, and ultimately those cost reductions possibly be passed on to customers in time, so we would certainly support it over time.
Thank you. Matt, any more questions?
Yeah. One further question here, Barbara, from Marc and Christine Kelly. Their question is, "Why is coal still being imported into New Zealand?
I can take that, Barbara.
If you'd like. We could both answer that one, but you go, Marc.
The challenge we have is we rarely need it, but when we need it, we need it quickly. We need a lot of it. This year we did need a lot of it. The coal that is used is a certain type of coal. It's designed for the Huntly Power Station, and there's a limited capacity in New Zealand for that type of coal. What importing allows is for us to supplement the local supply chain, which does exist through periods of high demand. That's the reason. We obviously would rather we didn't have to from an environmental perspective. As I said, for the last month or more, we've not been consuming any coal in the electricity system. You're gonna see many, many less imports over the next year.
I think we should also acknowledge the great work of the team who are involved in bringing coal in for our use should we need it. As you know, supply chains are quite disrupted at the moment and there's been a lot of effort going on to making sure we can get the coal in that we might need to be the backbone of the energy supply in New Zealand. Great work to the team. Matt, any other questions?
Final question here, Barbara, currently from Oliver and Hildegard Crollmann. They are asking, "Is Genesis looking at tidal generation in any form?
Marc, I might ask you. That's not something we've discussed, but it might be happening in the background.
No, we're not looking at it. All over the world there's a lot of hope that that might provide a form of energy. If you just think about it, when you put a generator in the sea in a very salty, corrosive environment, in a very viscous environment, and you compare that to a wind farm in a less corrosive environment, the air much less viscous, just the energy efficiency is far less. There's lots of hope and R&D going on around the world, but it's not something that is close to being scalable, and not in New Zealand and not Genesis.
Thank you. Nat, are there any more questions?
No further questions, Barbara.
Thank you for your questions, everybody. I now move to the formal part of the meeting. This year we have three resolutions on which to vote. You will be able to cast your vote through the Computershare platform under the Vote tab. Once voting has opened, the resolutions will allow votes to be submitted. To vote, simply select your voting direction from the options shown on screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply select Change your vote. You may change your vote until the time I declare voting closed. I now declare voting open on all items of business. The resolutions will now be open in the Vote tab. Please submit your votes at any time, and I'll give you a warning before I move to close voting.
I have asked Catherine Drayton to chair this part of the meeting relating to my reelection. Over to you, Kathryn.
Thank you, Barbara. Tēnā koutou, tēnā koutou, tēnā koutou katoa. Resolution 1 proposes that Barbara Chapman, who's eligible for reelection, be reelected as a director of the company. The board has confirmed that Barbara is standing as an independent director. The board recommends Barbara to you as a director of Genesis Energy Limited and unanimously supports her reelection. I now invite Barbara to address the meeting.
Thanks, Catherine, and thank you for the opportunity to present myself for reelection to the Genesis board. Companies like Genesis are critical to the New Zealand economy. With our dual aspirations of being customers' first choice for energy management and being an active enabler of New Zealand's energy transition, I see our role is to support our business and residential customers with the energy they need to go about their lives, while at the same time lowering New Zealand's carbon emissions. When I first sought your support for my election to the board in 2018, I primarily outlined my skills in digital transformation, diversity and inclusion, and business performance. Genesis has achieved a lot in these and other areas over the past three years. While we have made good progress, there is still a lot of work to do.
I remain committed to furthering our work in these areas and continuing to perform to the expectation of our shareholders and our stakeholders. Genesis aims to be a sustainable, performance-driven organization, and I appreciate your support to my reelection so that I can continue the work to achieve our aspirations. Thank you.
Thanks, Barbara. Is there any discussion on this resolution? There appears to be no further discussion. I now put to the vote the ordinary resolution that Barbara Chapman be reelected as a director of the company. We will now give you a moment to vote via the Computershare site in relation to this resolution.
Thank you, Catherine. Resolution 2 proposes that James Moulder, who is eligible for reelection, be reelected as a director of the company. The board has confirmed that James is standing as an independent director. The board recommends James to you as a director of Genesis Energy Limited and unanimously supports his reelection. I now invite James to address the meeting.
Thank you, Barbara, and good morning, shareholders. It's my honor to be sitting here today, albeit virtually, seeking reelection to the board of Genesis Energy. I've been on the Genesis board since 2018, and I've also been a member of the Risk Committee during that time. I'm honored to serve on this board. My corporate career in New Zealand and Australian financial services and energy, specifically electricity markets, mean that I'm able to meaningfully contribute to Genesis. I've spent over a decade in the electricity industry in New Zealand and overseas, including leading advisory boards for the Electricity Regulator here in New Zealand and also working with the Singaporean Electricity Regulator. Also held positions like General Manager, Generation and General Manager, Retail at the business that's now called Mercury Energy. I assure you that I have the time to fully carry out my responsibilities at Genesis.
In concluding, I believe my extensive electricity and sustainability experience, along with my appreciation of the duties of listed directors, enables me to contribute significantly to the Genesis board. I assure you that I'm fully committed to working to create sustainable long-term value for you, our shareholders, and I thank you for your support.
Thank you, James. Is there any discussion on this resolution? There appears to be no further discussion. I now put to the vote the ordinary resolution that James Moulder be reelected as a director of the company. We will give you a moment to vote via the Computershare site in relation to this resolution. Thank you. I will now turn to resolution three. Resolution three proposes that the annual total pool for directors' remuneration be increased by NZD 132,950 from NZD 940,000 to NZD 1,072,950, with the increase taking effect from 1 November 2021. The last increase in directors' fees was approved by shareholders in 2016. As we did in 2016, the company engaged independent third-party expert advisors, Korn Ferry, to assist with the review process.
Korn Ferry looked at the appropriate levels of fees compared to companies which have a similar scale of operations and level of complexity to Genesis Energy. A summary of their report was sent to shareholders with the notice of meeting. Korn Ferry advised that Genesis should aim to maintain a market median position with fees generally between 95% and 100% of median. The board was also advised that the board and committee fees were generally well below median. The proposed increase in the total annual remuneration pool and the individual allocations for the board and committee structure described in the notice of meeting set us at approximately 100% of median and are in line with Korn Ferry's recommendations. Is there any discussion on this resolution? There appears to be no further discussion.
I now put to the vote the ordinary resolution that the annual total pool for directors' remuneration be increased by NZD 132,950 from NZD 940,000 to NZD 1,072,950, with the increase taking effect from 1 November 2021. We will now give you a moment to vote via the Computershare site in relation to this resolution. Ladies and gentlemen, that concludes our discussion on the items of business. In a minute, I will close the voting system. Please ensure you have cast your vote on all the resolutions. I will now pause to allow you time to finalize those votes. Thank you, ladies and gentlemen. Voting is now closed. I'm proud to lead an organization committed to a more sustainable future for New Zealand.
We have built strong foundations for future growth, and I look forward to continuing the good work for you, our shareholders, and for our customers and our wider stakeholders. Thank you, everybody, for joining us here today. This concludes our 2021 annual shareholders meeting.