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Plans for 159 MW project at Hawkes Bay stalled pending appeals
1 April 2006
Plans by New Zealand's fourth largest lines company, Unison Networks, for a 159 MW wind farm at Titiokura, Hawkes Bay, have stalled pending appeals to the country's Environment Court. But the project has won an exemption from the Electricity Industry Reform Act 1998 which restricts lines companies from involvement in energy supply. Unison applied for an exemption after it established a joint venture with Hydro Tasmania to build and operate the wind farm. The exemption was granted by the Commerce Commission on the basis of the joint venture nature of the development and the fact that the lines company would not be directly supplying electricity to its own customers. The commission has also permitted Unison to enter into electricity hedges relating to the output of the proposed wind farm, to allow it to cover for times when the facility is not producing. When it comes to wind power, pressure has been mounting on government to change its policy on allowing hedges and insisting on separation of the business of transmission and generation. Eastland Networks and WEL Networks have also sought exemptions to the act. Eastland has had its application refused, primarily because it could not satisfy the arm's-length requirement: it intended to retail electricity from its wind farm directly to customers connected to its network. Concerns were raised that this could inhibit competition and result in cross-subsidisation, points argued by Meridian Energy in opposing the exemptions. Meantime, the resource consents process for the first 16 turbines of Unison's planned 75 turbine project at Titiokura is set to roll for many months yet, threatening the planned November start to construction. Unison has argued that consent of large scale wind projects should be fast tracked due to their national importance. During the consent process, the New Zealand dollar has dropped significantly against the US greenback, which could have significant impact on the viability of developments using imported equipment.
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