The good number of international wind energy companies and infrastructure suppliers at the annual New Zealand Wind Energy Association (NZWEA) conference was indicative of just how far the business has come since the country's first national conference in 1997. Not that the newcomers had the floor to themselves. Some of the 40 or so original enthusiasts who gathered a decade ago were still to be found among the 250 strong crowd at the 2007 industry gathering in "windy" Wellington in mid-March.
Four main threads ran through the conference presentations and discussions over coffee: the consents process; technology for New Zealand conditions; transmission and grid connections; and financing.
New Zealand's system for consenting use of its natural resources -- described by one international participant as "ridiculous" -- has long been problematic for wind development. The process may now become a little less torturous following strong government pronouncements on support for renewable energy targets, highlighted in the new New Zealand Energy Strategy. At the conference, energy minister David Parker aired a proposal for a consolidated consenting process for wind and geothermal projects. This would enable a pool of projects to be called in and considered by the same decision-making panel, speeding up the process, he said.
That optimism was met with a certain amount of scepticism, with many seeing the proposed structure as overly complex and indirect. The addition of ministerial involvement was seen with some alarm, particularly with regard to the potential for political entanglements. On the other hand, Gerry Brownlee, shadow energy minister, noted the bipartisan political support for the national approach, stating that it would assist decision making without the parochial interests that can interfere with projects.
Don Turley of Kensington Swan disagreed, based on his experience in Australia. He advised the New Zealand audience to avoid political intervention, which he saw as encouraging delays and producing unpredictable outcomes. He felt the use of a judicial body could provide greater certainty, though the Environment Court should be strongly pushed to adhere to the timeframe for appeals and rulings.
Local impact, national need
Balancing local feelings against national benefit was a conference theme, prompted by a report, Wind Power, People and Place, released late last year by New Zealand's parliamentary environment commissioner. From the commissioner's office, Dana Moran said the tensions between wind farm development, landscapes and local communities must be dealt with.
Getting the balance right was a theme explored by Mark Ashby of Connell Wagner. He identified the difficulty of making wind power fit into complex district plans which had often been drawn up before wind energy arrived on the scene. He wants to see a proactive relationship developed with local authorities, working within the policy environment to see that wind projects, particularly large-scale nationally significant development, gain a better deal. Planning documents, instead of bogging development, must be a stepping stone to a renewable energy future, he said.
That is far from the case today. At a hearing into Allco Wind Energy's 110 MW Motorimu project, more than 200 public submissions were received and it involved ten consultants and three commissioners over a seven day period, a process Allco's Bernhard Voll wryly noted was comparable to his experience in gaining consent for nuclear power projects in Germany. He sees the process as complex, restrictive and expensive -- the Motorimu hearings cost Allco around NZ$25,000 a day. The Australian company entered wind energy relatively recently (Windpower Monthly, February 2007). Voll pointed to New Zealand's "well-developed NIMBY syndrome," where people are supportive of wind energy in principle, but where life-style block owners do not want to see wind turbines from their pseudo-rural properties.
Fraser Clark, NZWEA CEO, suggested that better education of local authorities, especially with regard to the environmental impact of wind farm developments, would provide a more effective route to improving the consenting rate. The development of useful, objective tools to assist decision making was also considered important, such as consistent application of an existing national noise standard.
New Zealand has typically provided a "challenging" environment for wind technology, with high wind speeds, a power system with no international links and sites in isolated locations. Vestas has had a long standing position as the country's major supplier and has had some problems with its machines. More recently, Suzlon and Siemens have entered the market, both expressing respect for New Zealand's winds. Suzlon, which in Australia is working with TrustPower on the 88 MW Snowtown project, has opened an office in Wellington. It regards installation of 42, 2.1 MW turbines at Snowtown as part of a New Zealand "beachhead." From Siemens, Henning Kruse says that New Zealand has good potential over the next decade to develop into an "interesting market" and will prove a challenge for his company's turbines.
TrustPower's Deion Campbell pointed out -- repeatedly -- that the company's Tararua wind farm of Vestas turbines is "the world's best wind farm" with a 46% load factor thanks to the area's average 10 m/s wind speed. It has not all been easy. The company has replaced more than 48 gearboxes over the seven years since the first turbines went up. Some of the initial 48 Vestas 660 machines have run without problems, but gearbox problems, as well as cracking of the yaw rings and other component failures, have kept the local Vestas technicians busy. The second stage units have been operational for three years and have not suffered gearbox problems.
"That's a good indication of how the industry has moved on," says Campbell. "We owe a lot of our 97% availability to Vestas working on this complex site -- and a little bit to Kiwi ingenuity as well."
The biggest bane for Campbell has been the use of lattice towers. These were chosen in the hopes that their "see-through" nature would help in the consenting process, but cracks, security, safety and storage have been constant problems. Repairing the cracks is estimated to cost around NZ$80,000 across the wind farm; monitoring and replacing loose bolts, with 2000 bolts over 103 towers, is also proving costly and time-consuming.
"We run them hard," Campbell notes. The next issue looks to be wear in the blade bearings, a problem that had not been expected to occur this early and yet another indication of the high-stress conditions turbines have to work under in New Zealand.
Campbell remains upbeat about wind power, despite the problems. The Tararua III extension is using Vestas 3 MW turbines and full commissioning, expected for around July, will make the Tararua wind farm the largest single asset in TrustPower's energy portfolio.
Consultant Peter Browne kicked off the conference session on "grid and transmission" by stating "wind farm projects can stand and fall on the practicalities of connection." The Electricity Commission has been undertaking the Wind Generation Investigation Project for the past two years, looking at the impact of variable wind generation on power system operation. The project, which is close to release, has used a number of scenarios, ranging from 420 MW to 2250 MW of additional wind energy distributed across the country. New Zealand has 170 MW running today, with 151 MW building and 1500 MW in the consenting process.
"It's really encouraging to see significant diversity in wind generation is possible, even within a relatively small country like New Zealand," said Philip Wong Too, a senior engineer with Garrad Hassan who worked on the project. A study by Imperial College London, commissioned by Meridian Energy, had further good news with the indication that New Zealand's combination of high wind speeds and additional hydro capacity would help wind power integration and related system costs.
The relationship between Transpower and wind developers has, at times, been an uneasy one. They need to interact with Transpower as both grid owner and system operator in a strictly regulated environment that demands compliance with specified Electricity Governance Rules. "Co-ordinating activities, especially with multiple assets coming online at the same time, can prove difficult," admitted Transpower's Graeme Ancell.
There are changes afoot as wind generation gears up to become a significant player. These are not only likely to involve the technical grid codes, but also the way in which the wholesale energy market is operated in New Zealand -- but those all have to be led by changes in government policy.
Meantime, Jeremy Warman of British Econnect, called on developers and manufacturers to be more up-front about providing information on their models and their data at an early stage in development to help facilitate connections. He acknowledged that consensus on grid codes and related international standards would be difficult to achieve, with "international specifications varying significantly in form and in detail." International experience mirrors that in New Zealand, with long term expensive investment in infrastructure required and the need to address congestion in the connection process.
Uncertainty was a theme running through many presentations at the conference, whether relating to security of supply, the underlying technology or to the predicted cash returns of a project. Michael Olsen from ANZ Bank discussed the role of project financing and how that has played a large part in the Australian scene, forming the financial structure for around 60% of energy funding.
"Over time we expect the same thing to happen in New Zealand," he predicted. Asset life is more of a concern in New Zealand than elsewhere, due to the harsh wind regime, he said. "Going bigger is not necessarily the best solution," said Adam Muldoon, wind development manager for Meridian Energy, reflecting a common comment across a number of speakers that the larger turbines in use today is likely to represent the maximum practical size with regard to infrastructure and transportation costs, and even material costs. Muldoon saw a rise in steel prices affect Meridian's planned development at White Hill, and of TrustPower's extension of its Tararua wind farm. Coupled with rising interest rates and other factors, he warned that 20-year investment decisions have to be founded on having a good site with a very high average wind speed accurately measured.
Forecasting, mesoscale modelling and the role of the independent engineer and third-party assessment were all examined as part of the session on financial considerations, concentrating predominantly on how to reduce the risk -- or the perception of risk -- to gain financial support for large-scale wind developments. Various speakers talked, somewhat enviously, of the financial support from governmental initiatives available overseas.
Monetising wind energy's carbon credits has become a New Zealand speciality. Sale of carbon credits on the world market helped developments such as Te Apiti, White Hills and Tararua. Government concern about the system's efficiency, however, has brought the allocation of carbon credits to a grinding halt (box). The financing of several major wind projects due to come online over the next couple of years is on hold.
New Zealand's useable wind resource is huge. One report identifies 3600 MW of potential sites with a wind speed greater than 7.5 m/s. Today's 171 MW of wind generation makes up 2% of New Zealand's electricity generation. Speaking to the conference, Parker noted that wind could provide at least 20% of New Zealand's electricity. "There is plenty of room for growth," he said.