Contact Energy has reported an underlying annual profit of $423 million and used the same announcement to reveal it wants to build a 250 megawatt data centre on the site of a gas power station it shut down earlier this year.
The gentailer released its results for the year to 30 June 2026 on Monday morning. Underlying profit was up 62 percent on the $261 million reported a year earlier. Underlying earnings before interest, tax, depreciation, amortisation and financial instruments, the measure the electricity sector actually runs on, rose 31 percent to $1,011 million. Operating free cash flow climbed 49 percent to $648 million.
Shareholders get a final dividend of 24 cents a share, taking the full year payout to 40 cents, a 3 percent lift on last year.
Most of the jump came from owning more power stations. Contact completed its takeover of Manawa Energy in 2025 and this was the first full year of the combined company. Total electricity generated or acquired reached 11,687 gigawatt hours, up from 9,390 gigawatt hours the year before, with hydro generation alone rising 53 percent to 5,032 gigawatt hours. Renewables made up 98 percent of Contact’s generation for the year, against 88 percent in the previous year.
Chief executive Mike Fuge called the year transformational. In the company’s announcement on the data centre, he said the plan was consistent with a wider strategy. “Our strategy is to lead New Zealand’s renewable energy future. And, as part of that, we are playing our part in the economic regeneration of the regions,” Fuge said.
The build behind the numbers has been substantial. Contact says it has committed more than $2.4 billion to renewable projects over the past five years, including three geothermal stations, two grid scale batteries and two solar farms. The Te Huka 3 geothermal unit added 0.4 terawatt hours in the year. A 100 megawatt battery at Glenbrook was commissioned in March, with a second 200 megawatt unit under construction. The company raised $575 million in new equity in February. Retail connections across electricity, gas, broadband and mobile passed 690,000, about 50,000 more than a year earlier.
The more interesting part of Monday’s announcement was what Contact plans to do with a paddock in Taranaki.
Contact and CDC Data Centres will seek resource consent for a data centre at Stratford, near the site of the Taranaki Combined Cycle plant that Contact retired this year after it reached the end of its working life. The consent would cover an information technology load of 250 megawatts, with total load including ancillary equipment reaching about 350 megawatts at peak times, subject to final design. Co-located battery storage would be built alongside it.
Those are very large numbers by New Zealand standards. A 250 megawatt load running around the clock for a year would draw roughly 2,190 gigawatt hours. New Zealand generated 43,879 gigawatt hours in total in 2024, according to the Ministry of Business, Innovation and Employment. One building would therefore account for something close to 5 percent of everything the country produces. Data centres are not usually run flat out at their full design load, so the real figure would be lower, but the scale of the thing is not in doubt.
Contact says that demand is the point rather than the problem. “It is our intention that electricity for the proposed facility would be supplied under long-term contract, supported by new generation from Contact’s 11 TWh pipeline of geothermal, wind and solar development options,” Fuge said. The company argues that large, long-term contracted demand is what makes new renewable generation and new batteries financeable, rather than leaving developers to compete for existing supply.
Stratford has some genuine advantages for this. There are already 500 megawatts of grid scale batteries consented in the area and a grid connection left behind by the retired plant, needing only minor substation work. High capacity fibre runs from Taranaki to Auckland, both overland and by sea, and Auckland is where New Zealand’s international cables come ashore. Contact’s joint venture with Lightsource bp is separately working up a 150 megawatt solar farm with battery storage nearby, itself still subject to consent and a final investment decision.
For a region that has spent two decades watching oil and gas work drain away, the employment figures matter. Contact expects peak construction jobs to be comparable to its Tauhara geothermal station, which supported more than 600 jobs in Taupo at its busiest. Once running, it expects about four times as many skilled workers on site as the old gas plant employed.
Water, which has become the standard objection to data centres overseas, is being headed off early. CDC says its cooling recirculates the same water in a closed loop rather than drawing continuously from the network, and that it will explore a pathway to net zero water use at Stratford using rainwater collection.
CDC is the largest data centre operator across Australia and New Zealand. Its shareholders include the New Zealand listed infrastructure investor Infratil, Australia’s Future Fund and Commonwealth Super Corporation. Founder and chief executive Greg Boorer struck a deliberately cautious note. “Our focus at the moment is on working systematically through the technical, consenting, commercial and stakeholder work required to assess this opportunity,” he said, adding that the project would proceed only if it met CDC’s standards.
That caution is worth taking seriously. Neither company has committed to building anything. Activity is limited for now to consenting, design, customer conversations and planning, and any construction depends on securing anchor tenants, getting approvals and raising project finance. Contact has also flagged that one option under consideration would see it take an equity stake alongside CDC. The 200 megawatts of existing generation Contact still operates at Stratford is unaffected either way.
What Monday delivered, then, was a strong set of numbers built on assets Contact bought and finished, and a proposal that is still a long way from concrete. Both are worth watching, for different reasons.
You can follow live generation and fuel mix across the national grid in our NZ Grid Live tool. Contact’s full results are covered by interest.co.nz and 1News.
Should New Zealand be courting data centres of this size, or is 250 megawatts of new demand the last thing our power system needs? Leave a comment below and tell us what you think.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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