Uncertainty forces industry to hibernate

A blend of political, economic and market factors are blowing wind power into the doldrums in New Zealand, a country with great potential. This was the main message from the Solar '98 conference in Christchurch, New Zealand, held by the Australian and New Zealand Solar Energy Society.

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The international future for wind energy looks great, but things locally are a little glum, judging by presentations at the recent Solar '98 conference in Christchurch, New Zealand. The annual conference of the Australian and New Zealand Solar Energy Society saw a solid focus on wind energy developments, but with the general conclusion that the country's political climate was not promising for wind power in the near and medium term.

"The New Zealand market for new renewable energy technologies is going nowhere," declared analyst Graham White of Garrad Hassan Pacific Ltd. It was a common theme as White, overseas speaker Paul Gipe, and others outlined a rosy view of the future for wind in any country other than New Zealand. Frustration was obvious, given the recognised strength of the wind energy resource in the country. At a consistently estimated 100,000 GWh a year wind energy potential -- and with the average wind speed clocking in at 9m/s -- the country is considered "heaven" for wind energy. Wind power proponents, however, remain disappointed that political developments have meant a very uncertain future for the nascent market.

"Australia is gearing up and ready to go," said John Tingate, the Australian agent of the world's largest manufacturer of wind turbines, Vestas of Denmark. "New Zealand is powering down." Vestas had a big presence at the conference, being a sponsor of the event and having the largest stand among the mix of wind, solar and research displays. Tingate and White both see Australia's 2% renewable energy quota as providing an important boost to the market there. At only 10 MW installed wind capacity at present, Australia lags behind the 36 MW of New Zealand, but both commentators see that as likely to change rapidly.

The reasons why

White outlined a long list of reasons why he thinks the current situation has a poor outlook for New Zealand. Restructuring of the electricity market in the attempt to create a completely deregulated environment has meant major uncertainty for those involved. A great deal of energy has gone into the restructuring. New Zealand utilities are being required to split their distribution and retailing activities into separate companies, which has caused some problems, most notably for CentralPower (box) "These changes have seriously reduced the interest shown in wind and other renewable energy technology by the industry," notes White.

Add to this the current over-capacity of generation, a lack of any form of "green" power sales or investment incentives, a rapid recent drop in the New Zealand exchange rate, and predictions of a drop in the wholesale price of electricity of 10-30%, it is easy to see why White sees an industry going into hibernation.

Judging by comments amongst the 50-80 people attending the wind energy session at the conference, the main hope for wind appears pinned on the chances of a change in government following next year's election. The current government, which has a strong focus on deregulation and free market forces, is looking increasingly shaky, having lost its formal coalition partners and polling badly. The party tipped as likely to take power next is perceived as being more wind-friendly. "We'll just wait and see what happens," commented Dan Lund, visiting from Vestas in Denmark.

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