As we move into the clear skies of Matariki, it's a time to reflect, to remember and honor our friends and family members who have passed on in the prior year. We acknowledge all of those who have passed on in your families and in ours, those who've concluded their time amongst us, but who still remain close in our hearts and our memories. We farewell and pay our respects to them all. Nau mai, haere mai ki te hui a tau a Meridian Energy 2023. [Foreign language] E mihi ana mātou ki a koutou katoa, ahakoa kei hea koutou e tautoko ana i ngā mahi a tēnei pakihi hiko. We also look to the future, and we reflect that we're all guardians of our present natural resources.
In time, these will pass on to future generations, and we're mindful to leave the environment in good shape for those who are to come after us. [Foreign language] Kua pū te ruha, ka hao te rangatahi . When the old net is worn out, the new net is taken up. The past year has been challenging for many communities. We've seen the forces of nature impact Aotearoa in devastating ways. Meridian continues to work alongside communities to both operate responsibly within the natural environment and to contribute to positive social outcomes. We're providing strong support to the efforts of our communities as they rebuild their strength and resilience. We recognize that together with our communities and our shareholders, we are strong, and we welcome you to join with us once again as we take a look at the year that has been.
[Foreign language] Nā tō rourou me tōku rourou ka ora ai te manuhiri. With what we have to offer and what you have to offer, the people will be well taken care of. Nā reira, e te iti me te rahi, koutou katoa e huihui mai, puta noa i ngā motu, e mihi ana ki a koutou katoa. Tēnā koutou, tēnā koutou, tēnā koutou katoa.
[Foreign language] Kia ora, Tania. Tēnā tatou katoa. Mōrena, ko Mark Verbiest ahau. I welcome you all to Meridian's 2023 Annual Shareholder Meeting. To those of you who are joining us in person here at Meridian's office in Christchurch, and to those who are joining us online, I welcome to the meeting Anthony Smith from our auditors, Deloitte, and Ian Beaumont from our solicitors, Russell McVeagh. For those here in person at Meridian's Durham Street office, bathrooms are clearly marked and can be found through the side, the sliding entrance doors to your left. In the case of an earthquake or an emergency, please note, this is an earthquake-safe building. Remaining in the building during a shake and adopting the drop, cover, and hold protocol is the recommendation. In the event of a fire, an alarm will sound.
Please walk calmly and use the stairs located to the side of the lifts where you came in, marked by the green exit signs. Do not use the lifts. If we must evacuate, there will be wardens who will usher you along the footpath to a safe muster point on Gloucester Street . When it is safe to do so, you'll be told to re-enter the building. Moving to today's business, I declare the 2023 Annual Shareholder Meeting open. The meeting has been duly convened, and a quorum is present. The minutes of last year's meeting have been posted on Meridian's website and are held by the company secretary. Today's meeting is being held both in person and online via the Computershare online meetings platform. This allows shareholders, proxies, and guests who are not able to travel and attend this meeting in person, the ability to attend virtually.
All online attendees can watch a live webcast of the meeting and read the company documents associated with the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. For those of you attending virtually, if you have a question during the live 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 immediately be submitted. Should you require any assistance, you can type your query, and one of the Computershare team will assist you via 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 during the meeting.
Your questions may be moderated, or if we receive multiple questions on the same or similar topic, we might amalgamate them together. Finally, due to time constraints, if we are unable to answer your questions at this time, we will definitely answer them by email. Voting today will be conducted by way of poll on all items of business. In order to provide all attendees with enough time to vote, I will shortly open the online voting for all resolutions. At that time, if you are eligible to vote at the meeting, you will be able to cast your vote under the Vote tab. Once the voting has been opened, your questions will allow votes to be submitted.
To vote, simply select your voting direction from the options on screen. You can vote for all resolutions at once or for each resolution. Your vote has been cast when the tick appears. To change your vote, simply select Change Your Vote. You will have the ability to change your vote up until the time I declare that voting has closed. Persons attending the meeting who are not shareholders, proxy holders, or corporate representatives of a shareholder may not vote. That includes bondholders. Voting is now open on all items of business. The resolutions will now be open in the Vote tab. Please submit your votes at any time. I will give you a warning before I move to close voting. Let me start by introducing the Meridian board and some of the management team.
This year, this hybrid meeting invites you to join in person or online, and you'll note that our management team and board have followed this approach. The hybrid approach is largely driven by our commitment to show leadership in sustainable practice and specifically reduce the carbon and cost associated with running the meeting. Meridian board members present with me today are Julia Hoare, Mark Cairns, Tania Simpson, and our latest recruit, David Carter. Meridian board members joining the meeting online are Nagaja Sanatkumar, Michelle Henderson, and Graham Cockcroft. Also present with me in Christchurch today are our Chief Executive, Neal Barclay, our Chief Financial Officer, Mike Roan, our General Counsel, Jason Woolley, and Claire Shaw, our General Manager, Sustainability and Corporate Affairs. The rest of Meridian's executive team is here online.
With a purpose of clean energy for a fairer and healthier world, it is only right that a company of Meridian's size and stature is doing what it can and what it must to combat climate change and be a good corporate citizen, protecting the environment and helping Aotearoa, New Zealand, achieve its climate change goals and the transition to Net Zero. And this underpins our business decision and shapes the way that we operate. It's been pleasing to see a large number of industrial decarbonization projects announced over the last few years, utilizing the Government Investment in Decarbonising Industry Fund , or the GIDI Fund, as we call it. These projects will reduce New Zealand's emissions by more than 1.5 million tons of CO2 per annum.
But there's much more to do for Aotearoa to reach our emission reduction targets, and the Emissions Trading Scheme, or ETS, is a key in achieving that outcome. The ETS was developed to provide a sinking lid on the total net emissions and to send price signals that incentivize businesses to act. It is critical that successive governments avoid the temptation to tinker with this market mechanism, and that the ETS evolves in a way that the country can have enduring confidence in it. The incentives need to be there for businesses and people to invest in reducing gross emissions. We can't just, just offset our way to a net zero carbon economy. Aotearoa's electricity market continues to rate in the top ten of OECD countries in terms of affordability, security, and sustainability. This market is actually working really well.
Data from MBIE shows that New Zealanders are benefiting from a range of retail choices available to them. It's important not to conflate prices in the electricity wholesale market directly into the prices that our end customers pay. Wholesale market pricing is an input to end pricing, yes, but it's no more than that. It's also important to note that there are other inputs, including the cost of transmission and distribution, which are all reflected in a customer's bill. If you adjust for inflation, residential and business prices have actually trended down in New Zealand in the last 10 years. Over the same timeframe, electricity costs, as a percentage of average household income, have actually fallen 25%, from 2.4% to 1.8%. Whilst industrial prices have risen over the recent years, they are competitive internationally.
Despite this, we recognize the rising cost of living generally means that more New Zealanders are finding it hard to pay for essentials, such as power. We're very conscious of this. Meridian has been, and intends always to be, fully compliant with the Electricity Authority's Consumer Care Guidelines, but we treat that as a base level requirement, and we think our record on customer care speaks for itself. We continue to have extremely low disconnection rates, and our credit team operate to a mantra that we do not disconnect any person who genuinely wants to pay their bill, even if sometimes they cannot. We demonstrated our commitment last year to customers when we introduced our Energy Wellbeing Programme pilot.
This pilot was aimed to help customers in hardship obtain and afford adequate energy services in their homes to support their well-being and the well-being of their whānau. We are very pleased with the tangible difference the program made for the 130 households that were on the trial and who were struggling. Following the success of the pilot, the board agreed to expand this program to help 5,000 households across the Meridian Group by investing a further NZD 5 million over two years. The program involves building partnerships with communities that enable us to offer different levels of energy efficient interventions. So far, we've supported 1,500 households, and we'll be doubling this in the next six months. As a company, we've started bringing teams together internally to think about how we can resolve decarbonization and hardship together.
For example, giving people what we would call energy sovereignty. That could involve providing customers in hardship with access to batteries or solar and virtual power plant options or demand response flexibility products. We have a lot of good brains collaborating on this right now. Electrification of transport and, I mean, industry is one of the best ways New Zealand can prioritize and combat climate change, particularly given these sectors are directly responsible for almost a quarter of the country's gross carbon emissions. It is vital we continue to build new renewable generation assets and enhance our existing ones, to ensure that we can meet the future growth in electricity demand. We expect by 2050, Aotearoa will require around NZD 30 billion of new investment in renewable generation.
For Meridian to do its share of the heavy lifting, approximately 30%, we'll need to build the equivalent of 20 wind farms in the next 27 years. This will require massive capital investment, and for that investment to be supported, Aotearoa must have an enabling resource management framework, especially when it comes to consenting. Consenting authorities need to be able to balance localized environmental impacts and community views with the national and global imperative to reduce emissions through large-scale renewable energy projects. At this stage, it's not clear to us whether the new Natural and Built Environment Act will actually make it easier to build renewable generation, as key elements like the National Policy Statement for Renewable Electricity Generation remains a work in progress as at today. A change in government could also see policy settings change.
Whatever happens, this sector will remain highly aligned and engaged with government and on the need for a responsive resource management framework that supports and prioritizes renewable generation. The government also completed a pre-election drop of a range of consultation papers on energy topics, including gas transition and a hydrogen roadmap. Cabinet has also decided to further investigate the Lake Onslow pumped hydro storage scheme and a more market-based portfolio approach as the two options under the New Zealand Battery Project. All of this activity is aimed to inform the New Zealand Energy Strategy. However, a change in government could also see a change of approach. The overarching imperative for New Zealand to achieve Net Zero carbon by 2050 will not change, however, nor will the fact that renewable energy is the largest single enabler of the economic climate-related transition that we need to make.
So we're confident that our strategy to focus our efforts on climate action is sound. We'll continue to develop renewable generation options to support customers to decarbonize their homes and businesses, while doing what we can to support those customers who are suffering hardship. We think this strategic direction will hold this business in very good stead. We continue to advocate for balanced and diverse views at board level to oversee our strategy and guide the business through the years ahead. We welcome two new non-executive directors to our board in the last year, Graham Cockcroft and David Carter. Graham and David are both experienced business leaders who we know will add significant value to our business. We also welcomed, Benjamin Bateman as our next future director. Today, we'll also be saying goodbye to Mark Cairns.
Mark has been on the board since 2012, and for much of that time, has been chair of our Safety and Sustainability Committee. His leadership has led to an appropriately high focus on these areas of risk for the business, but importantly, also on the opportunities to create and enhance long-term value by thinking about what being truly sustainable means. We will personally miss, at the board, his zealot-like approach for focusing on EV infrastructure development to enable, to encourage EV uptake. Mark has been a champion for the cause, and you will be missed.... I will conclude my opening remarks by making some observations on shareholder returns. Off the back of a strong cash operating result, the board declared a final ordinary dividend of NZD 0.119 a share, which is up 3% on the previous year.
That brings total ordinary dividends declared for the 2023 financial year to NZD 0.179, which is up 3% on the previous year. We've also continued with the Dividend Reinvestment Plan and made that available for any investors wishing to take advantage of it. Given we're approaching the 10-year anniversary of Meridian's listing, it is worth reflecting that total shareholder returns since listing have totaled 380%, compared with the NZX index growth over the same period of 130%. We think it is fair to say the company's performed well for investors since listing. Looking forward, the sale of our Australian operations in January 2022 strengthened our balance sheet considerably, and we've the investment capability to support the growth strategies of our retail, renewable generation, and Southern Green Hydrogen projects.
The board is therefore confident that New Meridian can play its part in New Zealand's decarbonization program, while continuing to deliver competitive return, returns to you, our investors. Thank you for continuing to invest in the company and support it, and I'll ask our Chief Executive, Neal Barclay, now to address the meeting.
[Foreign language] Kia ora, Mike. Tēnei tatou katoa. Ko Neal Barclay toku ingoa. Good morning, ladies and gentlemen. I'd like to start by introducing the exec team. Mike's gone through a number of them, but we'll rattle through the team again. Most, some of them are here in person, the rest are all online. We have Lisa Hannifin, our Chief Customer Officer; Mike Roan, Chief Financial Officer; Bharat Ratanpal , Chief Information Officer; Nick Kennedy, Chief Executive of Flux Federation; Tania Palmer, our General Manager of Generation; Jason Stein , Chief People Officer; Chris Ewers , General Manager of Wholesale; Claire Shaw, General Manager of Sustainability and Corporate Affairs; Guy Waipara, General Manager of Development; and Jason Woolley, Company Secretary and General Counsel. The executive team have been stable and very productive, I believe, in the last year.
Nick Kennedy now reports to an independent board, as we want to accelerate the growth potential for Flux Federation. But Nick remains a key member of the executive talent at Meridian. So it seems only right that I start my address talking about the great team we have at Meridian, because it is this team that has enabled us to continue with successfully managing the business and to grow it. The rate of change in our industry is only speeding up, and our ability as a business to anticipate and lead change while delivering solutions for our customers, all comes down to our people and our culture. This year, we've invested a lot of time and effort into ensuring that Meridian continues to offer a great employee experience, so we continue to attract and retain the talent we need for the future.
Our belonging strategy is aimed at building on our diversity and encouraging a true sense of belonging that defies ethnic, belief, and gender constraints. We introduced the Te Ao Māori strategy during the year, aimed at lifting the overall cultural capability of our people and supporting us to better recognize Māori values and how we operate, and how we attract and retain Māori in our workforce. Obviously, remuneration and benefits have a part to play in maintaining a skilled and engaged team. With this in mind, we refreshed our benefits package, adding some important new features, such as health insurance for all staff and wellbeing leave. We also believe that we have effectively normalized hybrid ways of working, and in doing so, we've enhanced the overall productivity of the company.
In the years ahead, as we accelerate our renewable construction program, we are committed to managing the safety risks for our people. In doing so, we will continue to work alongside other sector safety groups. This year, we reviewed and rebuilt our understanding of the controls that manage our critical risks in the business. We ended the year with a calculated Total Recordable Injury Frequency Rate for employees and contractors per 200,000 hours worked of 1.76, compared to 1.58 in FY 2022. Overall, these results compare very well with other large industrial companies and their averages across those sectors. Now, it's important for us, as New Zealand's largest renewable energy generator in Aotearoa, that we walk the talk when it comes to sustainability and climate action.
But to succeed, we must work together across the Meridian team, with communities, our customers, and sector peers. Whether we're working on material actions or small details, we need to continue to challenge ourselves to make the changes that will have the most impact in supporting New Zealand's transition to net zero by 2050. It was pleasing to see that our sustainability efforts were once again recognized this year when Meridian was named one of Aotearoa's most sustainable companies in the Kantar Better Futures report. This is good recognition, but the overarching sentiment in our business is that we must continue to maintain and grow momentum, because significant and meaningful change is needed, and it's needed right now. This is why we've continued to focus on our climate action plan, which includes ambitious targets for renewable electricity generation, customer decarbonization, and managing our own emissions.
A great example of progress can be seen in our approach to the Harapaki Wind Farm development in Hawke's Bay. We estimate that we've avoided construction-related emissions of between the equivalent of 15,000-20,000 tons of CO₂ through a detailed focus on the reduction of embedded carbon in the design stage and careful on-site actions during construction. We have specific sustainability roles at Harapaki, and we continue to build intellectual property that will benchmark sustainable practice for all future projects in our development pipeline. Our Forever Forests project, which is our plan to create a permanent native forest carbon sink, will eventually see 1.5 million trees sequester the remaining carbon that we cannot remove from our operations after our Half by 2030 program is complete.
Now, we have around 1,200 hectares of land in the program and around 300,000 trees planted. By the end of this coming financial year, we'll have 700,000 trees in the ground. We're making a meaningful difference in getting that program going. We need to invest heavily in renewable electricity generation to support Aotearoa's goal of Net Zero emissions by 2050. To achieve this scale of development, we firstly need to make sure that we have the capability to deliver it. Having retained a renewable development team for a number of years, we are investing strongly in supporting their progress.
This has seen that team double in size over the last couple of years, and that has helped us to more than double the size of the potential renewable projects that we've created, and we've created a deep pipeline of development options totaling more than 11,000 GWh. To put that in context, that's the equivalent of about 90% of our current generation portfolio. That pipeline will undoubtedly change over time, but our focus is on creating a portfolio of options that will support our business growth for the next 30 years. We are continuing to progress with our Ruakākā Energy Park in Northland. At Ruakākā, we are building New Zealand's first grid-scale battery, and we have also lodged consent for a 1,200 MW solar farm as part of the same development.
In May this year, we lodged consent for our Mount Munro Wind Farm, a 90 MW development in the Wairarapa. We are currently expecting to lodge consent for our 130 MW Swannanoa solar project near Christchurch early next year. Just hot off the press this morning, we announced an agreement with Parkwind, Parkwind being our experienced European offshore wind developer. We're gonna work with them to jointly explore offshore wind generation here in New Zealand. The risks and complexities of building wind farms in the ocean are far different than those for onshore wind, and it's great to have an experienced partner on board to position us to harness Aotearoa's offshore wind potential. Our work on reconsenting the Waitaki Power Scheme reached a significant, significant milestone in August when we lodged a new consent application.
We're seeking a further 35-year operating consent from April 2025. The consent seeks to cover the six hydropower stations that we manage within the scheme under the same conditions as we have today. We've been working hard with many interested people for many years to ensure our application has strong support across the board. Importantly, we've reached an agreement with DOC to turbocharge Project River Recovery, and we're developing a strong partnership with the Waitaki Rūnaka of Ngāi Tahu that will deliver environmental and cultural benefits for generations to come. The Harapaki Wind Farm has worn the impacts of ex-tropical cyclone and a number of cyclones and a number of other large rainfall events during the first two years of construction. Cyclone Gabrielle, we all know, caused widespread damage over a large area, including within our construction site.
As we signaled in the middle of the year, we've lost around three months to the overall schedule, but the project is now up out of the ground, and large turbine components have been transported to and erected at site. So we are confident we'll have the whole thing stood up and operating by September next year. Now, Harapaki Wind Farm will produce enough power to supply around 70,000 Kiwi homes, and just as importantly, it will help improve grid resilience into the Hawke's Bay region. We're working with credible and committed partners on the Southern Green Hydrogen project. Woodside and Mitsui are there, and we have secured the option for Ngāi Tahu to join the joint venture at the point of financial commitment.
There's a lot of complexity in the technical and commercial terms of the development phase, so progress has been careful because the joint venture foundations need to be right. What we have here is real. Hydrogen will play a significant part in the future low-carbon energy system in New Zealand. For me, Southern Green Hydrogen represents not only a strong commercial opportunity for our business, but even more importantly, a significant step towards energy independence for our country. We signaled last year that we would be evolving our customer approach to concentrate on developing energy solutions focused on electric vehicles, rooftop solar and batteries, process heat, and demand flexibility. This customer strategy aligns with our company's decarbonization agenda and will support customers to take emissions out of their own operations while saving money on their overall energy bills.
We've quietly built up the country's second-largest public EV charging network, and we now have 269 Zero-branded charging points across both the North and South Islands. Our certified renewable energy product has also enabled around 100 large business customers to purchase more than 660 GWh of renewable energy certificates this last year. This enables those customers to legitimately offset their Scope 2 emissions and improve the sustainability and marketing of their products. Renewable energy certificates are of particular value to customers who are engaged in export markets, as they reflect New Zealand's competitive advantage inherent in our highly renewable electricity system. Further, we've committed to reinvest all the proceeds from renewable energy certificates into a new decarbonization fund.
To date, more than NZD 1.2 million has been raised, and all of that is going into projects that will support climate action. We've been working with 15 companies over the last three years to support them to reduce their emissions profiles from process heat. These businesses that you can see on the screen here today, including some very well-known South Island brands, are making significant changes to their businesses to help combat climate change. We commend them for showing leadership and getting on with it. We continue to support demand response opportunities wherever possible.
Customers who can manage their demand down and reduce their electricity usage when supply is constrained, for example, when the southern hydro lake's low or during very cold, you know, winter mornings or evening peaks, we can pay them handsomely for not using energy at those times, and that also avoids having to add gas and coal-fired generation into the system. It's like creating megawatts without actually having to build them, and it's a strong win-win for the customer and those customers and the electricity system as a whole. Meridian has commitments of up to 90 megawatts of seasonal demand response from customers, and that's the equivalent of the annual capacity of the next wind farm we're looking to build. This is also a key reason why we're pursuing our Southern Green Hydrogen project.
With the right incentives in place, Southern Green Hydrogen can flexibly manage its demand on the electricity system in a way that could eliminate up to 40% of New Zealand's dry year risk. There's a lot more to come. Despite the range of weather challenges during the last financial year, there always is those, healthy electricity generation numbers and continued growth in retail sales ensured a strong financial result. Now, whilst our reported net profit after tax of NZD 95 million for the year ended 30 June 2023, the accounting result was heavily influenced by a negative NZD 375 million net change in the fair value of energy hedges. These are non-cash fair value adjustments, and they relate to transactions that will mature in future years.
As a better measure of actual performance within the year, EBITDAF of NZD 783 million was up 10% on the prior year, and underlying net profit after tax, which is a non-GAAP measure, was also up 35% to NZD 315 million. I think overall, the business is in very good shape. We've continued to deliver incremental cash earnings, supporting a progressive dividend approach, while also building on our pipeline of future growth opportunities. So to finish up, I'd like to thank you, all our shareholders, for continuing to invest in Meridian. I'd like to thank our board for their support, their challenge, and clear focus on creating long-term value.
I'd like to thank our management team and the broader Meridian whānau, who are unwavering in their efforts to deliver on our company purpose: clean energy for a fairer, healthier world. We're looking forward to embracing the challenges ahead and growing our business in a way that supports our country's net zero emissions goals. Thank you.
Thanks, Neal. I can advise, by the way, that the number of shareholders who are participating online is 55. Specific request of the New Zealand Shareholders Association, so that's the number online. So I can advise that we've received one written question so far. I'll cover that off before we move to the floor and the questions from the floor and the online audience. The question comes from shareholder Gillian King. Gillian asks, "Why is Meridian still invested in fossil gas? What are our plans to get out of gas, and when will Meridian be honest in its marketing, publicity, and reporting about its energy sources, and that, in particular, it is not supplying energy from 100% renewable sources, i.e., wind, water, and sun?" Thanks for your question, Gillian. Please note that we're not invested in gas.
We did use to retail gas in our Australian business, which we sold in early 2022. I can absolutely guarantee you that the only electricity we generate is from wind, water, and sun. It is 100% renewable. Now, I'm happy to take questions from the floor, and then following that, I will take questions online. Yes, sir. Would you please introduce yourself so that those online-
Sure. Peter Wakeman, shareholder from Christchurch. You mentioned, this is to the CEO, and the board, about, offshore wind farm partnerships. I just wonder what sort of cost is involved, because many years ago, my understanding was in the European market, that wind farms were only viable in Europe in the event that they got a big subsidy. That's the first question. I'll let you answer that one before I move on.... Yep. Do you want me to answer that?
Yeah, sure.
Yeah, look, offshore wind is more expensive than onshore wind. It's a whole different ballgame. For example, when you maintain the machines, you have to have a purpose-built ship to get out to them, rather than, you know, a couple of people in a ute. But the amount of investment going in overseas and building these machines in a more efficient way at larger scales means that those costs are coming down. So part of our move here is to ensure that we understand the technology, we understand where the trends are going, so that when onshore, offshore wind becomes viable in New Zealand, and it could be as early as next decade, then we're well positioned to participate in that part of the market.
It's basically covering ourselves in the event that we need to do it, but no plans at this stage?
We don't, we don't have a committed investment program, but that's part of our, our partnership with Parkwind, is to actually see what's viable. We still think there's a lot of onshore wind availability in New Zealand. We're very blessed with wind, for those of us that live in this country know that. But, offshore will certainly be a feature of the electricity sector if we're going to decarbonize fully.
Okay, I have to declare an interest. I'm running as an independent in the Banks Peninsula electorate this year in the general election. I want to know from a water viewpoint, because we've had the Three Waters , and I was listening to someone describe the different views of water. Just from a Meridian viewpoint of water, from a political risk and cost point of view, what, what do you have to say with regards to the definition and, and the future for affecting the Meridian energy portfolio?
Well, we don't, we don't have a particular view, you know, on the various different governance forms per se. We will work with whatever. We're focused on our specific catchments and the impact that they have from a physical point of view and a cultural point of view, and that's where our focus has been.
Yeah, but just as far as the cost recovery, do you think it's early days from, you know, politicians can change rules overnight. Do you have any warnings or concerns on this issue?
Well, in the main, for most of our assets, we don't consume water ourselves, so it's a pass-through. It's not. We do divert it in the case of some of our Manapōuri, our Waiau and Manapōuri system. But charging per se, obviously, if there were charges imposed, that would impact the economics and ultimately the charges that we would have to make to customers. It's not an issue at the moment. I'm not sure it's been mooted as such that we should pay or contribute.
No, there is no, as far as we're concerned, policy direction in either party of the government, potentially along those paths, but it could be a feature of the future. We don't know at this-
The last question is, given the age of our hydro and some of the challenges that we face with keeping them up to date, versus the cost of wind farms, how would you describe the maintenance of a wind farm versus hydro at the moment and some of the concerns that we have?
Well, in terms of if you could, if you like, our longest dated assets or hydro assets, in fact, on, from a maintenance point of view, in the main, they perform extremely well. And it's just an absolute, underpinning of the whole system that we have that hydro storage. New Zealand is so advantaged by having that. Maintenance-wise, the economic life of a, of a wind farm is, is less, so, you expect the, maintenance sort of in the main to be higher over the, the economic life of the asset. But that said, that's all worked through in terms of the overall economics. And, wind, and certainly the new development, and we, we base it off what we call a Levelized Cost of Energy when we're assessing projects for their, whether it economically makes sense.
They perform extremely well, and, you know, it's, it's an abundant source, and to a degree, still untapped in New Zealand, that New Zealand can use for decarbonization going forward.
I was mainly referring the costs for maintenance for the new wind farm versus the old wind farms that we have. I'm just-
Certainly, like any technology advancement, we're now going to direct drive, so we don't have gearboxes in the turbines. So the newer technology is definitely involves less maintenance.
Yeah.
And it's just the evolution of, you know, technological advance.
Okay, thank you.
The costs are coming down. That's the trend.
Thank you.
Yeah.
Thanks, Mr. Wakeman. Yes, Frank. If you could introduce yourself to the meeting.
I'm Frank Stewart. I'm representing the New Zealand Shareholders Association, and I'm also a shareholder. I have to say that the Shareholders Association are very pleased with the completeness and the quality of the recent information that's provided in the company's annual report. The question I had was about, you've introduced a dividend reinvestment plan. Is that being taken up by the major shareholders representing government interests, the government itself, the super fund, ACC?
Might actually look, I'm looking to our investor relations manager, who probably has the answer to that.
You can find out by looking at various sources.
Yep.
We have an agreement with the government under its direct ownership that it participates in the DRP. The decisions are made by government institutions such as ACC or Super Fund, independently of central government. Currently, neither of those participate in the plan they had previously. It's a discretionary decision that they make.
Yeah, for the benefit of those people online who might not have been able to hear Mr. Hackston's response, the government or the Crown has a participation agreement in relation to the Dividend Reinvestment Plan. They exercise their rights under that, basically to ensure that they keep their 51% shareholding as capital might slowly increase. In terms of Crown-owned financial institutions such as ACC and New Zealand Super, they are currently not exercising rights to participate under that scheme, so they're collecting dividends in cash. Thank you. Are there any other questions from the floor? Yes, sir.
My name is Andrew McKenzie. You mentioned NZD 30 billion investment needed over 20 years for the sector, of which Meridian would come up with NZD 9 billion or NZD 10 billion of that. That's NZD 450 million a year. Is that sustainable along with the dividends you're currently paying? And if so, how would you do it, with price increases or, or, yeah, how, how would you do it, go about it?
Well, currently on our projections, yes, we can sustain the development pipeline that we have in mind and continue to pay dividends.
Okay.
That's all things being equal.
Yep.
You know, Nothing's for certain here.
As you grow your generation portfolio and your customer relationships as a result, that adds profit to the bottom line as well, which helps facilitate a bigger balance sheet. So it is self-funding over time.
Yep. Brilliant. Okay, thank you.
Yes, sir.
Richard Hallows. Just a clarification regarding the lifespan or expectancy for your wind farms. Currently, you would expect a wind farm to be economically viable for how many years, and the new developments, what are you looking at in terms of for the future?
Yeah.
Do you want me to take that? So Harapaki, for example, our latest wind farm, is under an availability warranty for the next 30 years. So the provider of the equipment has guaranteed that it will continue to operate at a high availability, 90% plus, for the full duration. They'll also invest in all the maintenance to keep it that way throughout that period. So it's got a definite 30-year time frame. Beyond the 30 years, you'll probably run them a bit longer, but then you start running into constraints around the torsional strength of the towers and so forth, but at least 30 years, guaranteed high performance.
All right, thank you.
Any other questions from the floor? Yes, sir.
Hi, Wayne Keenan, shareholder. On your generation demand graph, you sort of seem to show a large increase in projected demand from about 2027 after it seems to be otherwise leveling off. Could you explain what has led to that?
Well, I'll let Neal answer that, but gradually, as industry and transport gets electrified, that's where the bump in demand is really starting to kick in. And, I haven't got the graph in front of me, but if it's showing 2027, that is really evidencing significant EV uptake, for example, and-
Yep. I mean, that, that's exactly it.
Yeah.
All the projections are to decarbonize our economy. We've got to take a lot of processes, process heat, industrial processes, and the transport fleet, all the vehicles out there, turn them into electric. As that occurs, it drives the demand for electricity up quite dramatically. The projections all vary from a 50% lift over the current demand today to potentially a 100% lift by 2050. We're trying to position our company, and I know the rest of the sector's positioning itself as well, to be able to meet that demand and grow the size of the grid overall to enable us to decarbonize. The important thing, though, in all of that is, going back to one of the questions asked earlier, the unit cost of new generation, of new capacity is trending down in the long run.
So we don't expect all of that growth and investment to drive costs up for consumers. That's the important thing. It'll be just a lot of investment spread a lot, across a lot more demand. So it's an exciting opportunity for our country.
But the other thing that's worth bearing in mind for particularly residential consumers, is that current independent work that's been undertaken suggests that an overall household's energy bill, say by 2050, I know that's a long time away, but nevertheless, should actually decrease from what it is now, and I'm including in that the, not only the cost of the energy that you take in the house, but also your fuel cost, because EVs are a lot, the running costs are a lot lower, and even their total economic cost, than running an internal combustion engine vehicle. So there is a genuine, we think, a genuine prize at the, you know, at the end of this transition, and it's not to decry that there's gonna be a lot of investment that will be required in the shorter term. All right.
Have I got any online questions? It's another one from Gillian King: Congratulations on the board of Meridian, showing great leadership and practicing care of, for our climate and environment by coming together in a hybrid form instead of everyone traveling. Will you publicize this leadership so that other companies around the world can follow suit? Well, thank you. We certainly appreciate this feedback. And this is something that, operating this hybrid meeting has certainly been something that's, become increasingly common, certainly in New Zealand. To the extent that we can, we hope that the media will, make comment on it, but we don't have control over that. So but key thing is, we will do what we can, and, we take these issues seriously, so-
Let me just add to that.
Thank you.
I mean, when we, when we look at our overall emissions that we create as a business, we count the emissions that our people incur getting to and from work, and that is part of our Half by 2030 commitment. So we're working with our staff, and provide, and hybrid working is one of those opportunities. But also more efficient ways to get to and from work, to try and drive those emissions to at least half what they are today by 2030.
Yeah. I've got another question from Carol Rees. When do we expect to get resolution on the power deal with NZAS or the smelter? Well, look, discussions with the smelter continue. Certainly, when we've got something to say, we will. But the fact of the matter is, as we stand today, we don't know. So there's no change on that.
You'd expect sometime between the end of next year, though.
Yes, given that the contract expires at the end of next year, certainly expect to see it before then. John White of Century Securities: 2023 net profit was only NZD 95 million, mainly due to a net change in fair value of energy hedges. How come you got the hedges so wrong? What is the learning from this huge loss? Is there any accountability? Well, Mr. White, actually, it's literally due to an interpretation of financial standards that this apparent, you know, non-realized loss has occurred. As part of our nor-- you know, we've, hedge is normal. We are looking into, you know, potentially adopting hedge accounting to involve these sorts of issues going forward.
As we've tried to explain in our annual report, we try to analyze our business on a cash basis, because ultimately, you will never know what happens with your hedge book, unless and until you close the hedges out or they've matured. We don't think it's an accurate or appropriate or fair way to analyze the accounts.
Right.
But it's certainly not, you know, suddenly a failure on management or the board's part that, you know, our hedging strategy has failed.
No. If we can just give a bit more context to that, that the hedges actually were very successful, but what we're doing is hedging retail sales for the future by buying energy products through wholesale markets. When it gets to the accounting at the year end, we revalue the hedges, but we don't revalue the underlying retail book, and that's why we get a mismatch. Over time, we've actually locked in margin through these hedges, and that's what you'll see come through the cash earnings of the business, which we typically refer to as EBITDAF.
Yeah. Okay. Question from Bruce Noble. What energy story tech... Sorry, what energy storage technologies is Meridian investigating, batteries, pumped hydro, or what? Well, we've certainly, as you'll be aware, Mr. Noble, invested in one battery project at Ruakākā, near Marsden Point already. That's under construction. We've got a second site in the North Island. We are and we continue to investigate other options such as pumped hydros. Not in the Deep South , I'd have to say, because we think it's needed in the North Island and of a smaller scale.
It's also worth noting that, in fact, our hydro lakes are massive battery storages in their own right, and the team has done a magnificent job in the last couple of years of actually finding extra capacity, and creating extra capacity that we can actually draw off, and utilize from those lakes. So, make no mistake, we're looking at all options, and we think a suite of options makes more sense than a big pumped hydro scheme in the Deep South that will take 10 years to build and at a very massive cost. Okay. Another-
Yes, I'll come to you in a second, sorry. James, Bruce Noble again: Is the grid itself going to limit a potential 100% increase in generation and consumption ? What will Meridian do to mitigate this constraint? Well, first, obviously, primary responsibility for the capacity of the grid rests with Transpower, but we're really supportive of them significantly augmenting the grid. They will have to build and spend more money, and more CapEx on, augmenting and enhancing the grid. They will have to invest more, and I know their regulator, the Commerce Commission, is now looking at more forward-looking pricing scenarios that enables them to increase their regulated asset base. So the fact of the matter is, the size of the grid is going to have to increase.
I think we're confident the investment signals the operational capability of all the companies operating to bring, you know, the grid to life and get all the energy to consumers in New Zealand, will facilitate supply to ensure it does meet demand. We're confident we can build the grid fast enough to meet that demand, and therefore not slow down our decarbonization as a country.
Yeah. We do think it's critical, and we're part of an industry-wide initiative to work together to collaborate on these sorts of issues and prioritize them. Otherwise, we won't assist New Zealand to achieve its decarbonization goals. And so far, you know, the participation has been really strong. I think everybody in this sector certainly, you know, the major players all accept and acknowledge that. Sir?
Ross Graham , shareholder. You said that the consents for the Waitaki are being reviewed. Have the consenting authority or submitters asked for any changes to maximum and minimum lake levels or flow levels at all, to your knowledge?
Well, I'll ask Neal to speak to the detail, but we've submitted the application, so the consenting authority, Environment Canterbury, will have to go through its processes. But we've pretty much asked for a maintenance, a continuation of the flows as they are today, not a reduction.
Yeah, so there's no indication that there'd be any change, and certainly our application is asking for exactly what we have today, capability. We'll work with most of the key stakeholders to get alignment and support for that end outcome.
Yeah.
We're pretty hopeful of a sensible outcome that, you know, ensures that New Zealand continue to generate beautiful hydroelectric electricity.
Yeah.
Just one other question.
Sure. Mr. Wakeman.
Pete Wakeman, Wright Street. The Richardson Group, I heard recently, are looking at hydrogen. Have you... Are you involved with their proposal, or is, how is this hydrogen business sort of with lots of partners? I don't know if there'll be any money by the time you have so many involved, but... or responsible. I'm just a bit confused.
Yes, we are involved with the Richardson Group around an energy contract to support their ambitions around a hydrogen-based fleet in Southland. Meridian is the key retailer for that opportunity.
Okay. Are there any more questions? I'm being told there are none online. Great. So before we move to the formal resolution set out in the notice of meeting, I will outline the voting procedures for today. Those of you online will note a new icon has appeared. Selecting this icon will bring up a list of resolutions and present you with your voting options. To cast your vote, simply select one of the options. There's no need to hit a Submit or Enter button, as the vote will automatically be recorded. For those present with us today, please cast your votes and place your voting forms in the boxes located at the back of the room. Persons attending the meeting who are not shareholders, proxy holders, or corporate representatives of a shareholder may not vote, and that includes bondholders.
Many shareholders who aren't attending this meeting have already voted. At the request of the New Zealand Shareholders Association, the announcement of the proxy count will be deferred until after the formal resolutions have been considered by the meeting. I'll now pass to Julia Hoare to introduce the first resolution, given that I'm the subject of the resolution.
Thank you, Mark. It's my pleasure to move the resolution to re-elect Mark Verbiest as a director of the company. Mark was appointed to the board in 2017 and became chair in October 2019. He serves on the Audit and Risk Committee and also the People, Remuneration, and Culture Committee. The board considers that Mark is independent, and we unanimously recommend that the shareholders vote in favor of his re-election. So, Mark, I'd like to invite you to address the meeting. Thank you.
Thanks, Julia. I've actually been in and around the energy industry pretty much my whole working career in a variety of guises. Often as lead advisor, often leading industry groups, and subsequently in governance roles. Initially in the gas sector, and then subsequently in the electricity sector, including a full term as chairman of Transpower before joining the board of Meridian.... I can honestly say, and it's no surprise, this is the most dynamic time for the sector, probably in our lifetimes. There's a lot to be done, and it needs to be done urgently, for the sake of the country and the planet. Meridian, I genuinely believe, has the requisite skills and experience to assist, and it's got a great value set in the organization. Subject to your continuing support, I'd like to continue to work with the Meridian team.
I can assure you the level of commitment, the team has to our strategy and to the country's goals is genuinely energizing, and, yes, it's a pun. So-
Well, thank you, Mark, and I now move that Mark Verbiest, who retires by rotation, is eligible for re-election, be re-elected as a director of the company. Is there any discussion?
Peter Wakeman . I'm just wondering, with respect to the board and the company, with respect to the wind, offshore wind farms, was there do you have any interests or conflicts in that regard?
No.
Thank you.
Thank you.
Thank you.
Are there any questions or discussion online? Nope. Thank you. I've moved the resolution, and I now put the resolution. So as shareholders, can you complete your voting for the resolution? And I'll pause and allow some time for you to finalize your votes. Thank you, everybody, and I'll now hand back to Mark to continue the meeting. Thank you, Mark.
Thanks, Julia. It's now my pleasure to introduce and move the resolution to elect David Carter as a director of the board and a director of the company. David was appointed as a director in July of this year and serves on the Safety and Sustainability Committee. The board considers David to be an independent director and unanimously recommends that the shareholders vote in favor of his election. Kia ora, David. I invite you to address the meeting, please.
Thank you, Mark. Kia ora tātou. Ngā mihi ki te iwi o Ngāi Tahu. Tenei te mihi maioha i a koutou. Ko Rawiri Carter tōku ingoa. Toitū te marae o Tāne-mahuta, toitū te marae o Tangaroa, toitū te tangata. When the land is well and the sea is well, the people are well. Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa. Hi, my name's David Carter. I'm the most recent addition or director to the board, and as Mark said, joined in July, so very newbie. I'm an engineer by profession. I graduated out of the U.S., and when I returned to New Zealand after graduation, I joined a company, and some 36 years later, I still work there, and I currently chair it.
I've been extremely fortunate throughout my career to follow my passion, which is infrastructure projects, and I've done those across the Australia, New Zealand, Pacific, Asian region, from ports, airports, high-rise building foundations, mining projects, water, wastewater, hydro canals, and my most recent large project was the Victorian Desalination Plant on the south coast of Australia. I'm also a firm believer in the value of education as a great leveler for society, and in that capacity, I currently serve as chair of the University of Auckland Foundation. I similarly believe that the quality of life and our economic prosperity, particularly in New Zealand, is intrinsically linked to nature and environment. With that belief, I currently serve as a guardian of Aotearoa Circle, and I also was on the Sustainable Business Council for New Zealand.
New Zealand and the world around us is facing a huge or increasing number of challenges. One of those large challenges is how we collaboratively work together to address the effects of climate change and global warming. Meridian is an amazing company, broad array of assets and businesses, and a wealth of opportunities ahead of it. We also find ourselves in a unique position to help New Zealand decarbonize, to reduce our carbon footprint and help the globe, and also generate increased renewable energy and therefore, thereby add to our and New Zealand's prosperity. While doing so, we also have the ability to help restore nature and restore the environment within which we live. I'm honored to have been asked to join the board.
I'm truly humbled by the capability of my fellow directors, probably a little bit in awe of them, and I hereby ask your approval to reappoint me or re-elect me to the board. Thank you.
Thank you, David. I now move that David Carter be elected as a director of the company. Is there any discussion? Yes, Mr. Wakeman .
Have you had any experience in wind farms or electricity?
No, I haven't had any experience in wind farms. I have had experience in electricity. I remember sitting at, in a empty 165 cumec hydro canal, trying to figure out how we were going to repair it and fix it. The electrical side of things, I'll stay well clear of, 'cause I'm a civil person. The other part of the question, was it?
Wind farms.
So haven't built any. Clearly, I've been visited a bunch. We went to White Hill recently, and I was in awe of that, and so looking forward to it. Excited by the prospect.
I think the other thing to note is that given our development pipeline, David mentioned his civil experience. Well, anyone who's been involved in a lot of it, the construction, and in our case, I mean, that's almost a bigger part, and the issues tend to be potentially more significant than the actual technology side of wind farms. Making sure that the bases are right, for example, our turbine structures at Harapaki and the like, and the geology and so forth, it's critically important. So I think we're extremely fortunate to have someone of David's capabilities, and given his stature in the engineering community, I have no doubt that very quickly, he's going to surpass us in terms of experience in and around the wind farm technology per se. So I hope that helps. Thank you. Any more questions?
If not, I have moved the resolution that David be appointed, or be elected as a director. I now put the resolution. Shareholders should complete their voting for the resolution, and I'll now pause briefly to allow you time to finalize your vote. Ladies and gentlemen, thank you for your attendance to the resolutions and attendance at the meeting. As advised to the meeting earlier, many shareholders have voted by proxy beforehand, and at the request of the New Zealand Shareholders Association, we've delayed the announcement of those results until after the consideration of the resolutions. As shown on the screen now, I can advise that just over 2 billion votes, representing 78% of the shares on issue, were lodged with our registrar, Computershare, 48 hours prior to the commencement of the meeting, as required. That concludes our discussion on the items of business.
Just in a very short minute, just to make sure we've covered everything off, I will close the voting system to give people a final chance to vote. Okay. Voting is now closed. Thank you for voting. Once all votes have been cast, they'll be counted by Computershare and scrutinized by our auditors, Deloitte. The results will be advised to the New Zealand and Australian Stock Exchanges later today. We thank you for attending our annual shareholders' meeting, and I now declare the meeting closed. Thank you.