Meridian, which produces only renewable energy, and MRP, which has a lot of hydro and geothermal power stations, are tipped to reap windfall profits from the carbon tax.

While the other big generators – Contact Energy and Genesis Energy – yesterday “welcomed” the government’s announcement of the carbon tax levels, this was because the long-awaited decision finally gave more certainty to future energy planning.

Genesis chief executive Murray Jackson said the carbon tax would add NZ$10 per megawatt hour (1c per kilowatt hour) to costs at the largely coal-fired Huntly power station, which Genesis would have to recover through raising its wholesale power prices.

The carbon tax will also have to be factored in to Genesis plans for its e3p gas-fired power station project, also at Huntly, and any plans Contact has for more gas-fired stations in Auckland or Taranaki.

The government unveiled the carbon tax yesterday as part of its commitment to the Kyoto protocol, which is aimed at reducing global greenhouse gas emissions.

Energy specialist Bryan Leyland estimated Meridian and MRP would gain between NZ$100-200 million more in profits.

Meridian would be the biggest winner as it is an all hydro-electricity generator producing about 30% of New Zealand's electricity. A 1c rise in wholesale electricity prices would increase Meridian’s revenue by about NZ$120 million.

MRP’s revenue would increase by about NZ$60 million, though it may also have some extra costs at its 110MW gas-fired Southdown (Auckland) power plant. Similarly Contact, with its hydro stations, would reap about NZ$100 million extra but would have extra costs for its Taranaki Combined Cycle (Stratford) and Otahuhu A and B (Auckland) stations.

Various organisations – from Federated Farmers to Business NZ – have criticised the tax, saying it will slow economic growth and does nothing to tackle agricultural greenhouse gas emissions, which accounted for half of this country’s emissions.