New Zealand - Low expectations amid too many uncertainties

NEW ZEALAND: The New Zealand wind industry is expecting a flat year, in line with a general lack of growth in energy demand. There are no projects under construction and uncertainty over grid charges is holding back some developers. Only generators on the South Island are charged a fee for the cost of the high voltage direct current link between the South and North Islands, but the electricity authority is reviewing this and will announce any changes this year.

Permitting is also a problem. The New Zealand Wind Energy Association has called for a national approach to landscape issues to provide more certainty to the permitting process. The problem was highlighted when the country's largest electricity generator, Meridian Energy, pulled out of a 633MW wind farm on the Lammermoor Range in Otago after the environmental court rejected the consents that had been granted by local authorities because the project would be located in outstanding landscape.

Last year saw the publication of an energy strategy confirming the country's target of 90% renewables. But the document does not provide details of how wind will be supported.

However, demand is forecast to grow again in 2013/14 and wind has the potential to take a large share of that. The average capacity factor in New Zealand is 45%, meaning that the industry requires no financial incentives from its government.

The country has 622MW of installed wind capacity, up from 506MW at the end of 2010, representing growth of over 20%. The government is mainly relying on the country's emissions trading scheme to increase renewable generation. This was implemented in 2010, but so far has had only a marginal impact on wind, according to the NZWEA.