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New Zealand

New Zealand conference: Opportunities across the Tasman sea

Ties across the Tasman Sea have traditionally been strong between the Australian and New Zealand wind power markets. With the Australian wind business set to take off again, eyes in New Zealand are swivelling north. Interest in joint development, market expansion and common industry practices and legislation was strong at this year's New Zealand Wind Energy Conference (main story).

According to Peter Calderwood of New Zealand utility TrustPower, a major participant in the country's wind sector, there is good potential for cross-development, despite significant differences in both generation mixes and market structures. The company developed the 98 MW Snowtown wind farm in South Australia (Windpower Monthly, December 2008) and is looking at developments in other states, he said.

Calderwood admits the wind resource is significantly better in New Zealand. "What (the Australians) call wind is calm weather in New Zealand." The major difference between the two markets, he said, is in how the incentive mechanisms have developed. In coal-rich Australia, the system is based on the government's mandatory renewable energy target for 20% renewables by 2020, with wind farm owners getting revenue from both the sale of electricity and the sale of green certificates (representing one megawatt hour of generation), which the country's electricity suppliers must acquire to comply with the legislation. In New Zealand, which is heavily reliant on hydro, there is no direct, financial incentive mechanism, although an energy review is under way.

In considering the long-range marginal cost, Calderwood points out that to ensure profitability, Australian wind developments rely on renewable incentives for 50% of their revenue, compared to around 5% for New Zealand operations. "You would not survive in Australia if you did not have those incentive schemes going," he said at the conference. Optimistically, in terms of policy, he suggested there might be some alignment across the Tasman by 2010.

Philip Wong Too, senior engineer with Garrad Hassan, also felt there would be more cross-Tasman traffic with firms such as European wind turbine suppliers Siemens and Vestas looking to expand opportunities in markets where they have relatively little penetration as yet. China's market is taking off so fast that Chinese firms are unlikely to become a major regional player in the short term, he added. There was, however, a late flurry of registrations to the conference from visitors with Chinese interests.

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