Company chairman Wayne Boyd said the excellent result – achieved in a year characterised by below-average inflows into Meridian’s hydro lakes – would enable it to continue a high level of investment in new renewable generation.

“Strong revenue growth was driven by high spot prices on the wholesale market in the latter part of the year, primarily created by thermal (gas-fired) plant maintenance and increasing concerns over hydrology moving into winter,” he said.

But New Zealand’s challenging hydrology and high power prices reinforced the urgent need for the country to grow its electricity supply, according to Boyd.

Meridian had invested over NZ$500 million in new renewable – wind and hydro - generation capacity during the past five years, and had another NZ$500 million at least planned for future investments.

“More than any other power company Meridian has been investing heavily in new generation capacity to improve security of supply," Boyd said.

"Clearly, we cannot commit to this level of development without achieving the kind of financial results that will give us the means to carry it out.

“It is critical that we can undertake projects without requiring a capital injection or underwriting from the Crown shareholder, especially as the public accounts may suffer as the economy softens.”

Meridian planned no more large price hikes this year, as prices were now at a level which supported more generation developments.

The growing attractiveness of renewables was reflected in the strong interest shown by potential purchasers in the possible sale of Meridian’s Australian subsidiary, Southern Hydro, with an announcement due on that soon.

Meridian spokesman Alan Seay told EnergyReview.net that Meridian planned to pay the government about 65% of net profit as a dividend, probably later this year.

Fellow state-owned player Genesis Energy earlier this month said it would not to pay a dividend, reinvesting all its NZ$70.2 million net profit into new generation facilities.