A long way home

Contact Energy boss David Baldwin, a Nelson boy made good, is now steering New Zealand’s largest listed energy company down a multi-billion-dollar renewable energy future. NEIL RITCHIE talks to the man who, at the age of 44, has already followed an exhaustingly long, varied, and even illustrious, multinational career.

David Baldwin and the hundreds other people at Contact Energy are going “flat out” down the renewables road, investing up to $2 billon over the next five years or so in renewable power generation facilities, notably geothermal and wind.

And the man who took control of Contact is pleased with his achievements since taking the helm in May last year.

“The directors know the direction Contact is headed, the shareholders do and the staff do – the government knows a large part too, although it is not a shareholder,” he says confidently.

“Our policy is to support renewables and climate change.

“We think New Zealand has a renewable future, although we will always have a strong gas presence as part of our generation portfolio – gas will always have a role to play in providing baseload generation.

“We are flat out at present, going busters on renewables, particularly on the Te Mihi geothermal project and integrating Rockgas into Contact.”

Australian parent company Origin Energy sold its New Zealand liquefied petroleum gas (LPG) business Rockgas to Contact Energy for about $156 million last March.

“Rockgas will give Contact customers the choice of electricity and or gas. Contact is the only company in New Zealand providing dual fuels the entire length of the country,” he says.

Contact Energy has plans to invest up to $1 billion over the next five years in two new geothermal power stations in the Taupo region, producing enough renewable energy to power up to 350,000 homes.

The 220 megawatt Te Mihi power station is one of these and will gradually replace the 50-year-old Wairakei power station.

Baldwin was born in Nelson in 1963 and graduated with a Bachelor in Engineering (chemical and process) from Canterbury University in 1985.

He then joined Shell New Zealand in Wellington as a project engineer at the company’s surfactant (wetting agents that lower the surface tension and interfacial tension of liquids) manufacturing complex in Petone.

He moved to Royal Dutch Shell’s global headquarters in the Hague, The Netherlands, in 1989, where he first worked on the development of large scale petrochemical projects and then as an assistant head at Shell’s Pernis manufacturing complex near Rotterdam.

“That was one of the biggest career influences of my life, working for one of the premier oil and gas companies in the world.

“One of their strengths is an incredibly good training programme; training in safety culture that lasts a lifetime,” Baldwin recalls.

He then came back to New Zealand in 1993 and started an MBA at Victoria University and afterwards joined SouthPac Corporation, the then merchant banking arm of the National Bank of New Zealand.

While at SouthPac, he was responsible for economic and risk analysis associated with various merger and acquisition activities for SouthPac’s energy clients.

Baldwin was then seconded, in 1995, to AsiaPower Developments, a joint venture between SouthPac and

Brierley Investments, and he relocated to Jakarta, Indonesia, to manage the development of a geothermal power project for AsiaPower.

Two years later, he joined CalEnergy international, an affiliate of MidAmerican Energy Holdings, which is still majority owned by Berkshire Hathaway, the primary investment vehicle of billionaire Warren Buffett.

“It was a real privilege to know Warren Buffett, to be able to sit in his presence, learning his business principles.”

While with CalEnergy he was responsible for new business and project development in Asia, including supporting the development and construction of its six geothermal power projects in Indonesia and the Philippines.

He relocated to Manila in 1998 as president of MidAmerican’s Filipino businesses. Projects there included 550MW of geothermal power and the development and construction of a US$650 million multi-purpose irrigation and hydroelectricity scheme.

Baldwin rates those Filipino projects as “my best success so far”.

“They were significant accomplishments, a private company operating them for a number of years before transferring them to the government.”

He then left the Philippines in 2004 to become a senior vice-president in MidAmerican’s Omaha, Nebraska, headquarters, where he was responsible for global development and acquisitions, including public and private utilities, liquefied natural gas (LNG) projects, gas storage and transmission assets.

In mid-2005 he left MidAmerican to join Chicago-headquartered alternative investment fund Ritchie Capital, with about $US5 billion of assets under management.

Working from the company’s Hong Kong offices, he was responsible for a team of investment managers involved in the development, acquisition and oversight of US$800 million of private equity investments in the American and Asian energy sectors.

New Zealand then beckoned and his appointment as Contact chief executive sealed his return to his homeland, together with his family – a daughter aged five and a son aged four.

After such an extensive, wide-ranging career, does he have any unfulfilled ambitions?

“Yes, plenty. There’s lot of things I would like to do in the next few decades, some related to business, some not. I would like to see more of the world, particularly Africa, countries like Kenya and Tanzania.”

And what does an energy executive do in what little spare time he has?

“I go skiing and sailing, great things to do with the family. New Zealand is my preferred location – there isn’t anywhere better for children.”