Genesis Energy has formally committed to building a second battery energy storage system (BESS) at its Huntly Power Station site, New Zealand, reaching Final Investment Decision on a 100 megawatt, 200 megawatt-hour project that the company says will be the lowest cost committed grid-scale battery storage facility in New Zealand to date.

The decision advances the New Zealand and Australian exchange-listed energy company's Gen35 strategy and its broader USD 2 billion growth plan aimed at meeting rising customer electricity demand, displacing baseload gas generation, and reinforcing electricity security.

Project Scale and Cost

The second-stage project will double Genesis's battery storage footprint at Huntly, bringing total installed capacity at the site to 200 megawatts and 400 megawatt-hours.

The company says that combined capacity is sufficient to power approximately 120,000 homes for two hours. The estimated project cost is approximately USD 62.31 million, with a target internal rate of return of around 10 percent.

Genesis said it will own 100 percent of the asset and capture all value from operations. The total project cost figure includes capital costs and contingency but excludes capitalized interest and a USD 1.3 million management reserve held for potential foreign exchange fluctuations prior to hedging.

Genesis attributed the cost efficiency of the project to its ability to leverage existing land, infrastructure, and grid connection at Huntly, along with the shared plant carried over from the first-stage battery installation.

The company already holds both the necessary grid connection and consenting approvals for the site, with only minor additional consents required for construction activities relating to the expanded facility.

Timeline and Supplier

Saft (Battery Manufacturing Company) has been appointed to supply the battery system and provide long-term servicing, consistent with the arrangement in place for the first-stage installation.

Construction is expected to begin in the second quarter of financial year 2027, with the system targeted to be commercially operational by the third quarter of financial year 2028.

The first-stage Huntly battery, also rated at 100 megawatts and 200 megawatt-hours, is currently under construction and remains on track for a commercial operation date in the first quarter of financial year 2027, with Genesis noting it is running under budget.

Financing Approach

Genesis said the project will be funded directly from its balance sheet, in line with its Capital Management Framework. The company noted that its balance sheet was recently strengthened by a USD 400 million equity raise completed in March 2026.

The company outlined three capital management levers it intends to use across its broader investment program: direct balance sheet investment, joint ventures drawing on third-party capital, and power purchase agreements also backed by third-party capital.

Genesis said this mix is designed to allow it to deploy capital efficiently while maintaining its BBB+ credit rating and preserving financial flexibility for future Genesis Growth Plan Gen35 investments.

Strategic Role Within Gen35

The second-stage battery investment sits within Genesis's committed growth capital expenditure pipeline, alongside the first-stage Huntly battery and the 136 megawatt-peak Edgecumbe solar farm, which the company described as on track and on budget.

Further projects are at various stages of progression. The 67 megawatt-peak Leeston solar farm has a Final Investment Decision expected in the fourth quarter of financial year 2026, while the 271 megawatt-peak Rangiriri solar farm is targeting a Final Investment Decision in the second half of financial year 2027.

The 63 megawatt-peak Lauriston solar farm is already operational. Genesis also listed a range of discretionary opportunities across firming and renewable technologies.

These include gas storage, biomass, and a potential Huntly unit 7 peaker plant in the 50 to 100 megawatt range, all at discussion or early-stage status.

On the renewables side, the company has identified a 220 megawatt-peak Foxton solar farm, a 300 megawatt Castle Hill wind farm, approximately 200 megawatts of early-stage wind prospects, and early-stage hydro enhancement work, none of which had further updates provided at the time of the announcement.

A wind partnership with Yinson (a global independent renewable power producer) covering approximately 1,000 megawatts was also listed, with no further update.

Executive Commentary

Genesis Chief Operating Officer Tracey Hickman said the Final Investment Decision reflected disciplined execution of the company's Gen35 strategy and a focus on assets that enhance portfolio flexibility.

Hickman said battery energy storage provides fast-response capability that is increasingly important as the generation mix evolves, allowing the company to manage variability and support a more dynamic electricity system.

Hickman also pointed to the broader role of the Huntly site, saying the investment positions it to continue supporting system reliability as New Zealand moves toward a lower-carbon energy future.

She said the company remained focused on delivering projects that create long-term shareholder value while maintaining security of supply for customers.

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