Contact Energy (ASX:CEN) signs two 10-year electricity deals

Contact Energy (ASX:CEN) has inked two new 10-year deals to supply renewable electricity to forestry products manufacturer Pan Pac Forest Products and pulp and paper company Oji Fibre Solutions.

Under the agreements with Oji and Pan Pac, the NZ electricity provider will supply both companies with a portion of their electricity requirements through until 2034.

The new electricity deals are the culmination of a procurement process run by the Major Electricity Users Group (MEUG) to assist its members in securing long-term electricity supply agreements. Contact CEO Mike Fuge acknowledged MEUG’s role and its members’ collective intent to play their part in helping lower New Zealand’s carbon emissions. 

The news follows on from the recent long-term deal agreed with Genesis in August.

“It is another vote of confidence from customers who are willing to make long-term commitments to support renewable generation development, including the 152- megawatt Tauhara geothermal power station we are building near Taupo,” said Contact CEO Mike Fuge.

The Tauhara power station is expected to replace 1.3 terawatt hours of thermal generation from New Zealand’s electricity system, displacing 450,000 tonnes per year of carbon emissions. It is expected to be completed in the middle of 2023.

“We want to grow demand for our renewable electricity by displacing thermal generation and deals like the two announced today underpin that happening. That will ultimately be good for New Zealand both in terms of reducing carbon emissions and keeping electricity prices as low as possible.”

Shares in Contact Energy (ASX:CEN) are trading 1.5 per cent lower at $7.98.