Meridian Energy Limited (ASX:MEZ)
Meridian Energy Limited (ASX:MEZ) is a New Zealand power company that generates electricity through 100% renewable sources wind, water and sun.
Meridian Energy owns hydro power stations and wind farms that generate the electricity the Company sells into the wholesale market. Meridian also purchases back electricity from the wholesale market to sell directly to customers.
Wholesale electricity prices can vary significantly in New Zealand depending on what technologies are able to generate electricity at any point in time. Prices can be significantly affected by rainfall, as well as gas availability. In the short to medium term, Meridian manages this risk for its customers by offering fixed pricing. Meridian also offers financial contracts to businesses that buy directly from the spot electricity market to limit their customer's exposure to price variations. These contracts, plus a range of other financial instruments, also help to control Meridian's risks around price volatility as well as helping to smooth out the Company's earnings.