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New Zealand

Total wind capacity set to almost double -- Ready, steady go in New Zealand

Wind has been regularly in the news over the past 12 months in New Zealand, but more in its terms of promise than in actual commissioned operations. The whole industry has been marking time somewhat, waiting to see the outcome of the New Zealand Energy Strategy and associated government policy -- and what implications that may have for wind development. Judging by the increasing amount of interest in wind -- and the increasing number of project proposals -- the sector will be ready to jump should the market climate prove favourable.

Of the 170.8 MW capacity now operational in New Zealand, only 2.5 MW was added during 2006, with the initial phase of the Te Rere Hou wind farm coming online in the windy Tararua ranges near Palmerston North, the site of several wind farms already. That development, using five locally developed Windflow 500 turbines, with two blades, will eventually add a further 48.5 MW to the national grid. The NZ$80 million project is operated by NZ Windfarms, in which Windflow has a 40% stake. Other partners are NP Power and Babcock & Brown Wind Power.

Windflow's Geoff Henderson says the machine's patented "torque limiting" gearbox is proving particularly suited for New Zealand's tough wind conditions. Conventional gearboxes "can't hack the turbulent wind in New Zealand," says Henderson. Vestas turbines at Tararua have been among the victims. "In high winds you get phenomenal acceleration -- our gearbox doesn't." Noise was an initial concern for the first Windflow test turbine, but the problem is now solved and spawned a noise reduction technology patent in the process.

This year will see another 14 Windflow turbines added to the project with the whole 97 to be operational by the end of 2008. The Windflow project is in addition to 151 MW now under construction in New Zealand in two projects, which will almost double the country's wind capacity this year (table). Of that, 58 MW is due online by mid-year in Meridian's White Hills project and a further 93 MW in the third extension to Trustpower's Tararua wind farm. White Hills has already brought in money for Meridian with a NZ$9 million sale of carbon credits to the Swiss Climate Cent Foundation. The sale of credits was critical to making the development financially viable.

Numerous wind farms are at various stages of development, from initial feasibility investigations to grinding through the post-consent appeals process. Most are still at a very early stage or waiting on policy outcomes. At the end of last year, Britain's Renewable Energy Systems won the tender to develop a planned 90 MW wind farm on land owned by the Greater Wellington Regional Council in the far south of the North Island.

Genesis Energy is said to have spent in the vicinity of a million dollars negotiating with local interest groups regarding its planned 18 turbine Awhitu project. That development has since been shelved, with the company stating that it is not commercially viable to proceed as a result of the marked increase in turbine costs over the past year. Delays in the consent process have made it difficult for companies to assess the economics of a project due to the uncertainties involved in timing and approval. Genesis retains its consent approval for the next five years, so this project may return to the planning board at some stage.

momentum

The next wind development likely to get going is Meridian's West Wind, which is looking to put 70 Vestas turbines up for a total of 210 MW. That development looked good to go but has been bogged down somewhat in the appeals process. Meridian's Alan Seay is looking forward to seeing West Wind operational as the site is a top rated one. The company expects to see annual load factors of 48%, giving it world-leading potential. Meantime, the company is exploring a very large 630 MW development in Otago, in New Zealand's far south, and considering another wind farm site in the far north at Ahipara. "The momentum is gaining pace," says Seay.

Part of that momentum is expected to come from the country's new energy strategy, with increasing government emphasis on renewables and carbon neutrality. New Zealand is unusual in that the wind sector has no subsidies or other significant external support mechanisms, relying on the international market for carbon credits to financially recognise its extra value. "In this country wind stands on its own merits," notes Seay.

Fraser Clark of the New Zealand Wind Energy Association also notes that wind in New Zealand competes directly with the rest of the energy sector. He is cautious in expecting too much from politicians. "There's a lot of difference between talk and action," he says. Most players are waiting to see what actually happens. With recent events strengthening the hand of the Green Party and an election year looming, there is likely to be some sort of balancing act between meeting public concerns about global warming and sustainability and public disapproval of subsidies and other handouts when big electricity suppliers are often portrayed as gouging customers.

The parliamentary commissioner for the environment, Morgan Williams, has warned that the growing number of wind farm proposals requires better strategic planning to reduce conflict between developers and local citizens and to ensure appropriate development. The wind association is looking to develop a series of consistent standards that will aid local councils to assess and understand the implications for development in their area. With things starting to move again for wind in New Zealand, such assistance is going to be of more use in 2007 than in 2006.

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