Meridian Energy has nominated Mike Roan, who heads up the company’s wholesale markets team, for the integral part that he and his team played in ensuring a strong financial and operational performance for the company in 2012, despite it being the worst dry-year on record.
As a 100 per cent renewable generator, Meridian relies on rain and wind for generation. Following the dry year in 2008, Mike was appointed to the newly created role of wholesale markets manager - a role designed to ensure Meridian’s business remains aligned during challenging times.
Mike is accountable for underwriting retail and wholesale electricity sales and purchases while dispatching Meridian’s generating facilities and managing operating consents. Mike and his team are responsible for a net revenue base of around $1 billion.
In the 2012 financial year, Meridian was able to generate just 9,790 GWh from its hydro stations - 22 per cent less than the year before, and 8 per cent less than in 2008, the previous dry year.
That required Mike to make extremely difficult portfolio management decisions in what was an uncertain market paired with regulatory and political challenges.
The careful decisions he made contributed to Meridian achieving an EBITDAF of $476 million in the June 2012 year, 20 per cent higher than in 2008. And neither employee engagement nor customer satisfaction measures suffered: overall employee engagement improved on previous years. Meridian was rated joint first with TrustPower in terms of overall customer satisfaction out of the gentailers.
Planning
Mike’s calm and confident approach under pressure was due to careful planning in the years prior. Following his appointment, Mike, who has experience managing the portfolios of large energy companies in the United States, implemented a number of major initiatives to prepare for dry-year risks.
After the events of 2008, Mike supported the team that started identifying ways to extend the consented range for Lake Pukaki. Late last year consent was granted to increase the maximum control level of the lake during spring and summer, while also making available additional storage at the bottom of the lake during hydro shortages.
Also last year, Mike relocated the generation control team from Twizel to Wellington, improving analysis of the wider portfolio.
A key element of the company’s financial performance last year though, was the design and implementation of the portfolio optimisation process (POP), which quantifies risk and return for retail and wholesale customer sales over a five-year period.
When the imagined weather conditions actually eventuated, Meridian was ready with a course of action. The plan included effectively and accurately differentiating wholesale and retail price lines to ensure Meridian went to market with secure contracts.
The Energy Executive of the Year award category is sponsored by Transfield Worley.