Quarterly Operational Update

QUARTERLY OPERATIONAL UPDATE
Three months ended 31 December 2021
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE01
LAKE TAUPO HYDRO STORAGE LIFTED,
DESPITE DRIER CONDITIONS, TO 75GWh
ABOVE AVERAGE AT END OF Q2
AVERAGE OTAHUHU SPOT PRICE AT
$77/MWh, DOWN VERSUS PCP DUE TO
HIGH NATIONAL HYDRO STORAGE
FY2022 HYDRO GENERATION FORECAST
DECREASED TO 3,750GWh DUE TO
LOW LAKE TAUPO INFLOWS
>> QUARTERLY HIGHLIGHTS
HYDRO
STORAGE
MANAGED
Q2 SPOT
PRICES
<$100/MWh
3,750GWh
>> COMMENTARY
HYDRO GENERATION UNCHANGED DUETO LOW INFLOWS AND HYDRO STORAGE MANAGEMENT;TURITEA NORTH OPERATING
Mercury's hydro generation wasunchanged versus the prior comparable period at 929GWh, 90GWh below average
1
, due to 29
th
percentile
2
inflows into Lake Taupo. Lower hydro generation also saw hydro storage in Lake Taupo increase across the quarter from 403GWhto
513GWh at the end of the quarter, 75GWh above average
1
, leaving Mercury well-positioned in advance of the seasonally dry Q3. Mercury's
FY2022 hydro generation forecast has been decreased by 150GWh to 3,750GWh.
This quarter also saw the first significant generation volumesof 92GWh
3
from Turitea with all 33 turbines in the Northern section now
operating. Mercury's PPA-linked wind farms, acquired from Tilt, generated 262GWh during the quarter.
SPOT PRICES DECREASEON HIGH HYDRO STORAGE, FUTURES FLAT BUT LIFT FOLLOWING THE QUARTER
High national hydro storage (which ended the quarter at 122% of average
1
) saw average spot prices decrease during the quarter from
$117/MWh and $103/MWh at Otahuhu and Benmore in FY2021-Q2 to $77/MWh and $60/MWh respectively in FY2022-Q2. The
proportion of total generation from renewable sources in the quarter was 91%, increasing from 85% in the pcp and displacing thermal
generation. This was reflected in short-term futures prices with the FY2022 Otahuhu price decreasing from $133/MWh to $125/MWh and
Benmore decreasing from $110/MWh to $103/MWh.
Following the quarter, record low inflows
4
have seen national hydro storage trend quickly down to near average levels, resulting in futures
prices for the second half of FY2022 increasing at Otahuhu and Benmore from $137/MWh and $115/MWh respectively at the end of
FY2022-Q2 to $215/MWh and $188/MWh (as at 26 Jan 2022). Thermal fuel cost and availability pressures also persist with NZU prices
reaching record levels of $75/unit in January 2022.
MASS MARKET STEADY; COMMERCIAL & INDUSTRIAL YIELDS LIFT ON RE-PRICING AND NORSKE SKOG SETTLEMENT
Mass Market customernumbers decreased by 1,000 over the quarter from 328,000 to 327,000 as Mercury continues to pursue initiatives
to maintain market share.The Mass Market yield increased by 2.9% from $139/MWh in FY2021-Q2 to $143/MWh in FY2022-Q2.
The Commercial & Industrial segment yield (including both physical and financial sales) increased by 8.4%, from $86/MWh in FY2021-Q2
to $94/MWh in the most recent quarter, due to recent re-contracting and the early exit of the foundation hedge with Norske Skog Tasman.
DEMAND RESILIENT DESPITE COVID-19 LOCKDOWN, DECREASED DUE TO REDUCED IRRIGATION AND INDUSTRIALLOAD
Demand in FY2022-Q2 remained resilient despite the COVID-19 lockdown during the period, decreasing by 1.2% on a temperature
adjusted basis (-1.7% on an unadjusted basis). This was mainly driven by reduced irrigation load (contributing -1.1%) with industrial sector
demand also decreasing due to the closure of Norske Skog's Tasman mill and reductions at the Pan Pac mill and Glenbrook steelmill. The
contributions from each sector were: irrigation (-1.1%), industrial (-0.7%), rural (-0.1%), urban (+0.7%) dairy (+0.1%).
1
For quarters ended 31 December since 1999
2
For quarters ended 31 December since 1927
3
Due to accounting changes, pre-commissioning generation volumes from Turitea wind farm are now recognised in EBITDAF
4
For periods starting 1 January and ending 26 January (inclusive) since 1927

327336
290297
3739
4745
VWAP
1
VolumeVWAP
1
VolumeVWAP
1
VolumeVWAP
1
Volume
(GWh)(GWh)(GWh)(GWh)
1,1171,0392,4192,296
2
5846061,3731,438
3
5334331,046858
5249114109
4
1,1691,0882,5332,406
5
8059351,5791,778
270377562753
6
5355581,0171,025
313161105
1,9501,5893,7453,320
9299301,8831,974
7
6676591,2751,346
8
92105
9
262482
267402719835
Buy CfDs
6
267402719835
Spot Settlement of CfDs
10
-19-32-130-29
1
VWAP is volume weighted average energy-only price sold to customers after lines, metering and fees
2
Mass market includes residential segments and non time-of-use commercial customers
3
Fixed-price, variable-volume (FPVV) sales to time-of-use commercial customers
4
Excludes spot customer purchases
5
Excludes FTR and trading ASX positions
6
7
8
Includes generation from Turitea wind farm. Due to accounting changes, pre-commissioning generation volumes are now recognised in EBITDAF
9
Includes generation from Tararua, Mahinerangi and Waipipi wind farms
10
Net Position is Physical and Financial Generation (excluding Wind PPA volumes) less Physical Purchases and Financial Sales
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE02
NET POSITION
Financial87.0184.14
Geothermal (consolidated)
ELECTRICITY GENERATION
Physical
57.74 Wind PPA
68.72106.82
54.77 Wind
83.57119.92
87.01
108.33
84.14
65.73
71.54
91.87
73.48
90.48
114.4973.67
Hydro
Spot Customer Purchases
85.94 Other Sell CfDs
69.73110.72
86.70
92.57
120.19
86.25
110.79
Physical Purchases
Financial
Spot Settlement of CfDs
End User CfDs
OPERATING INFORMATION
Three months ended
31 December 2021
Three months ended
31 December 2020
($/MWh)
Dual Fuel Customers
($/MWh)
South Island Customers
Includes Virtual Asset Swap volumes of 151 GWh for the 3 months ended 31 December 2021 and 151 GWh for the 3 months ended 31 December 2020 and of
302 GWh for the 6 months ended 31 December 2021 and 302 GWh for the 6 months ended 31 December 2020
ELECTRICITY CUSTOMERS
('000s ICPs)
ELECTRICITY SALES
North Island Customers
Commercial & Industrial
Network Losses
86.16
139.36
95.25
Physical
120.39117.21
Mass Market
143.34
($/MWh)($/MWh)
127.09121.87
Six months ended
31 December 2021
Six months ended
31 December 2020
114.53132.02
94.3886.85
90.8187.08
141.61138.14
108.0194.60
102.03126.39
120.84132.73
96.3586.68
107.91120.20
108.65135.43
117.4792.44
117.4792.44
114.63118.45
93.24117.09
57.45
61.51
>> OPERATING STATISTICS

> ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 31 DECEMBER
Source: Electricity Authority
> SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 31 DECEMBER (EXCLUDING CFDs)
Source: Mercury Purchases and Transpower SCADA
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE03
19%
38%
21%
13%
3%
6%
Financial Year Q2 2022
MERCURY
MERIDIAN ENERGY
CONTACT ENERGY
GENESIS ENERGY
TRUSTPOWER
OTHER
>> MARKET DATA
17%
36%
19%
17%
4%
7%
Financial Year Q2 2021
13%
87%
Financial Year Q2 2022
MERCURY
OTHER
11%
89%
Financial Year Q2 2021

> OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS
Source: NZX Hydro and NZEM Pricing Manager (NZX)
> TAUPO STORAGE
Source: NZX Hydro
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE04
$40
$60
$80
$100
$120
$140
$160
$180
$200
0
500
1000
1500
2000
2500
3000
3500
4000
4500
JulAugSepOctNovDecJanFebMarAprMayJun
$/MWh
GWh
AVERAGE NATIONAL STORAGEFY2021 NATIONAL STORAGE
FY2022 NATIONAL STORAGEROLLING 12 MONTH AVERAGE OTA PRICE
ROLLING 12 MONTH AVERAGE BEN PRICE
0
100
200
300
400
500
600
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
AVERAGE SINCE 1999FY2021FY2022

> OTAHUHU ASX FUTURES SETTLEMENT PRICE
Source: ASX
> BENMORE ASX FUTURES SETTLEMENT PRICE
Source: ASX
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE05
$119.06
$103.11
$96.88
$170.44
$144.05
$129.70
$133.34
$141.63
$125.93
$125.05
$143.93
$128.46
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
FY22FY23FY24
$/MWh
Financial Year
AS AT 31 DECEMBER 2020AS AT 30 JUNE 2021AS AT 30 SEPTEMBER 2021AS AT 31 DECEMBER 2021
$100.69
$82.16
$73.50
$151.34
$124.13
$111.71
$109.88
$118.04
$104.54
$103.41
$121.24
$105.13
$0
$20
$40
$60
$80
$100
$120
$140
$160
FY22FY23FY24
$/MWh
Financial Year
AS AT 31 DECEMBER 2020AS AT 30 JUNE 2021AS AT 30 SEPTEMBER 2021AS AT 31 DECEMBER 2021

> NATIONAL CONSUMPTION (NON-TEMPERATURE ADJUSTED)
Source: Transpower Information Exchange
> AUCKLAND CLIMATE SUMMARY ( ⁰C)
FINANCIAL YEAR
Q1Q2Q3Q4
202212.217.8--
202112.316.919.514.8
202012.316.719.514.4
201912.116.320.214.1
201812.317.220.714.3
Historical Average (since 1999)11.916.119.414.2
Source: Met Service
> MONTHLY TOTAL CONSUMER RETAIL SWITCHING (ICPs)
Source: Electricity Authority
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE06
8,257
8,541
8,270
8,481
8,506
8,327
1,264
1,263
1,316
1,310
1,248
1,262
0
2,000
4,000
6,000
8,000
10,000
12,000
Q2 2017Q2 2018Q2 2019Q2 2020Q2 2021Q2 2022
GWh
NATIONAL CONSUMPTIONTIWAI POINT ALUMINIUM SMELTER CONSUMPTION
0%
5%
10%
15%
20%
25%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20Jan-21
Jul-21
% Churn
Monthly ICPs
NZ MARKET CHURN (LHS)ANNUAL NZ MARKET CHURN % (RHS)