Genesis CEO Marc England: A not-so-typical Englishman

He went to the same school as Prince Charles and has the same name as his home country, but Genesis chief executive Marc England is hardly your stereotypical Englishman.

As the son of a United Nations diplomat, the young England travelled the world – mostly in Asia but also in Africa, which meant international schools in his early years.

Then came New York, while his father was working in the city at the UN. “They sent me to boarding school to make sure that I had a reasonable education at the end of the whole thing,” England says.

But it was no ordinary boarding school: Gordonstoun, in Scotland, where the next in line to the throne spent time in the 1960s.

By some accounts it was not Charles’ cup of tea, but England loved the place.

“I often describe myself as not your typical Englishman,” he says. “Although I sound English and I have the surname England, I spent all my childhood outside the UK until I went to boarding school, but even then I was going out to see my parents in places like Sri Lanka and Pakistan.

“As a child, you never know anything different. I was lucky to have had those experiences but yes, it really was fun.”

By the time he arrived at Gordonstoun, the young England was very much the all-American. “I went to an American school in the US. I was a standard American – I played baseball before I played cricket.

“I played American football before I turned up at Gordonstoun but, by the end of a term, I was an Englishman – ironically, given that it was in Scotland.

“It’s a very outdoors oriented school and I loved sailing, mountaineering, and getting out amongst it.”

After boarding school, England signed up for a mechanical engineering degree at Sussex, where also studied French. He spent his final year in France, at the Université de Nantes.

Later came a three-year stint with Halliburton, learning to become a petroleum engineer.

“The internationalist in me didn’t want to go back to the UK at that point so I took a job at Halliburton in the energy sector – the Middle East division – not the infrastructure division, which attracted the controversy.”

At Halliburton, England was learning to become a hydraulic fracturing engineer, “before fracking became a swear word”.

“We were fracking deep gas condensate wells in Oman for two years. It was seen as a very sensible technology to enable you to get more out of the well more effectively.

“It was really only 10 or 15 years later that it became a big issue in the US.

“With the discovery of shale gas and the ability to frack wells closer to communities, it became controversial, but it was a well-trodden path prior to that.”

Three years in the Gulf was enough, so it was back to the UK to do an MBA, but a seven-year stint at Ford was his “real MBA”.

A position at British Gas followed, then came more general management roles.

Having married Julie, a “British Aussie”, the England family headed down under for two and a half years with the Australian generator-retailer AGL.

Then came Genesis, two years after it listed on the NZX as part of the government’s mixed ownership model. As CEO of Genesis, England sees himself as a “pragmatist who wants a low-carbon world.”

He says the past five years have seen a big shift at Genesis, as it became more customer-focused.

“When ECNZ was split up, it was initially just a bunch of power stations.

“It had customer portfolios prior to listing but it was a business that was very much focused on generating power.”

Now the company offers an app that gives consumers knowledge and advice on energy in the home and in their business. “We have moved from being a company that showed you what you consumed this month to what you are going to spend tomorrow, and offer some advice on what you can do to affect that.”

Huntly's role

Like all the major players, Genesis is vertically integrated, meaning it is both a generator and retailer of electricity.

The company, which has about 22 per cent of the market, is perhaps unfairly identified with the coal- and gas-burning Huntly Power Station, but it does have greener assets. There are its Tongariro, Waikaremoana and Tekapo A and B hydro stations, along with its Hau Nui wind farm in the Wairarapa.

Genesis also has commitments to take power from the newly built Waipipi Wind Farm in Taranaki, the Kaiwaikawe wind farm under construction in Northland, and from Contact’s Tauhara geothermal project near Taupō.

As well, it will soon develop a large-scale, 500 megawatt solar project.

England is a staunch defender of Huntly, whose thermal generation kicks in when the hydro-dominated system is stretched.

“The Huntly Power Station plays an important role for the sector – not just Genesis,” he says.

Long before Genesis was created, Huntly was built to provide backup for the highly weather-dependent renewable energy system.

“It was built for that purpose, in the right location, with the right gas line coming in from Taranaki.

“It is vital for the entire system but the role that it plays will evolve as the system evolves.”

England has called for New Zealand to develop an energy strategy. “The reason for that is to understand how the system will evolve and in a way that does not create dislocation in the energy system, the role that some assets play, and in such a way that ensures energy security.”

In the power game, the cliche is the “trilemma” – dealing with the three issues of electricity cost, reliability and renewability.

“In our sector, we are constantly trying to get all those things in balance … we need to move to a lower carbon system that does not disrupt security or cost, and as we move there we must understand that there will be tradeoffs.”

Displacing thermal

Genesis’ “Future-Gen” policy aims to displace baseload – continuous and uninterrupted – thermal generation.

“We don’t have much baseload thermal in New Zealand and most of it, despite perceptions, is gas-powered and not coal-powered.”

Most of Huntly’s thermal power comes from a beast called Unit 5 – a 400 megawatt gas-powered turbine which is the biggest of its type in New Zealand.

Any coal burnt at Huntly provides seasonal “firming” – backup to the hydro system only when needed.

Genesis is seeking to displace that gas-powered baseload capacity with renewables. But as England sees it, there are no silver bullets and every form of power generation has its downside.

Some are obvious: the wind does not always blow and the sun does not always shine.

England says solar – often written off because New Zealand does not get as much sun as permanently parched Australia – has a lot of promise.

Geothermal is always “on” but it too has issues: it produces some carbon emissions, though only 10 per cent as much as a gas turbine. Power from geothermal is 24/7, meaning it can’t flex up and down with demand.

Hydro is “awesome” as long as there is water in the lakes.

“And of course coal and gas have carbon emissions, so everything has its downside.

“So as we displace baseload thermal, we want a mix of wind, solar and geothermal to do that, because some of the tradeoffs offset each other.

“If we came up with the right mix, we can manage that energy security point.”

In the big picture the system is one of the most successful in the OECD, in requiring little or no subsidy. But it has come under fire, often from smaller retail players.

In the spotlight

With a handful of industry reviews under way, the prospect of change in the regulations now hangs over the major players.

In a report last week, the Electricity Authority said a contract between the Tiwai Point aluminium smelter and generators Meridian and Contact Energy may be distorting the market.

In addition, an Electricity Authority review of the power market has done little to allay fears of regulation change, with the authority canvassing opinion on possible structural reform.

England says it must be painful for those who designed the electricity market – long before his time – to hear critics describe that market as broken.

He says the authority is under huge pressure from a combination of small, independent retailers and large energy users, who collectively have successfully lobbied the Government and the authority.

“They are pointing the finger at vertical integration – which is not the problem, and is not the reason why we had high wholesale prices over the first six months of this calendar year.

“The reason was a shortage of supply driven by a shortage of fuel.

“Just like we are seeing in Europe, when you have a shortage of gas you have a shortage of energy generation and the fear that you are going to run out means you are going to get high wholesale prices.

“It’s nothing to do with vertical integration.”

EA Concern

His concern is that the authority’s report looks backwards, not forwards. “What the market really needs the regulator to do is to look at this market and say: ‘how are we going to get the right settings to create the right environment to become more renewable for electricity and support the decarbonisation of energy more broadly?'”

Pointing the finger at the Tiwai deal does not solve any problems, he says.

“Tiwai is a large source of demand and if you suddenly took that demand out, you would see falling wholesale prices, but you would also see old plant shut down and you would then see a rebalancing in the market and wholesale prices would return to a relatively normal level over time.”

Unlike many countries, New Zealand does not have the ability to take power from neighbouring nations when the system comes under pressure. For now, the only pressure relief valve is coal.

“The biggest difference in New Zealand … is that we don’t have backup from any other country, so when we are short of our indigenous fuel sources in any given period, where we are going to support that backup?

“That’s biggest question that an energy strategy needs to address, and that’s why we are calling for it.

“We would love to use much less coal, and we are predicting that there will be much less coal consumption over the next few years, for a lot of reasons.

“But the one attribute that coal has is that it can be stockpiled – it can sit quietly and when you are really low in the lakes and when you have no wind, you can run it and it is there.

“There are a lot of positives in the sector. Often a lot of negatives get picked up, but there are so many positives and New Zealand can lead the worldin learning how to decarbonise.

“When they say the market is broken, I think that’s deeply unfair and does not recognisethe value that the market has brought to New Zealand over the years, but we should not be afraid to acknowledge that the market can be improved,” says England.

“There are a lot of variables in our sector and it’s actually about balance when it comes to regulation and market design.”

Marc England:

Role: Chief executive of Genesis Energy.
Age: 48.
Family: Married to Julia with two children 13 and 10.
Education: Gordonstoun School in Scotland, Sussex University & Université De Nantes in France for a Masters in Mechanical Engineering and European Studies, Imperial College London for an MBA.
Career: First job as a Petroleum Engineer for Halliburton Energy Services in Dubai, Abu Dhabi and Texas, then post-MBA joined the Corporate Finance team at Ford of Europe in 2000 before moving to British Gas, the retail energy subsidiary of Centrica PLC in 2007 where he evolved from a finance professional into General management over several years. Moved to Sydney as Group Head of Strategy for AGL Energy in 2013 and was then offered the role of CEO Genesis Energy in 2016.
What was the last movie you saw? Jungle Cruise (with his daughter).
What car do you drive? Audi e-tron – a full EV.
What was the last book you read? The Ride of a Lifetime by Robert Iger, CEO of Walt Disney.
Last overseas holiday? UK and France in 2019/20.

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