New Zealand

New Zealand

Energy plan sparks major project news -- Targeting 90% renewables

New Zealand's government says it wants 90% of the country's electricity to come from renewable resources by 2025 -- up from today's 65%. Wind power, along with geothermal, will play a major role. Key to the country's Energy Strategy to 2050, published last month, will be the TZ1 emissions trading system, due to be implemented next year by the New Zealand Exchange.

Under the system, which will facilitate large-scale trading of Kyoto-accredited credits, "The electricity sector will face the costs of greenhouse gas emissions from 2010," says energy minister David Parker. "Electricity generated from fossil fuels will cost more to produce and further improve the viability of renewable alternatives."

He adds: "Assuming a medium term emissions price of NZ$25 per tonne of CO2 emissions, substantial additional quantities of new geothermal and wind are clearly economic." A national policy statement on renewable energy to provide guidance to local authorities charged with permitting projects is also planned.

Strategic importance

The strategy immediately sparked confirmation from Contact Energy of its plans for an up to 650 MW wind project at Waikato, south of Auckland. The company's David Baldwin says the proposed wind farm, to be known as Hauauru ma raki, meaning north-west wind, is strategically important, being located in the North Island and close to the major load centres of Hamilton and Auckland. It is "nationally significant both in terms of meeting New Zealand's growth in demand for electricity and for the development of clean, renewable electricity for current and future generations," he says.

Meantime, Contact Energy is continuing to defer investment decisions on its consented 400 MW Otahuhu C gas-fired power station to focus on renewable generation. "The vision of ninety per cent of New Zealand's electricity coming from renewables now hinges to a large extent on the ability to consent renewable projects without undue delay and connect them to the national transmission system," Baldwin says. "Active support for renewables from regulatory agencies will be very important to this vision being realised."

New on line

New Zealand's installed wind capacity currently stands at 321.8 MW having leapt 150 MW in past months with two projects coming on line. The total will increase to 370 MW next year with NZ Windfarms' 48 MW Te Rere Hau project currently building outside Palmerston. About 1700 MW of wind projects all told have been approved or are awaiting resource consent.

Indeed, all of New Zealand's major electricity generators now have wind energy projects on the go. Genesis Energy has teamed up with Australian wind farm operator Roaring 40s and Unison Networks for a 147 MW, two-stage project in Hawkes Bay. The 45 MW Titiokura Stage I development will comprise 15 turbines, with consent granted and construction planning under way. The Stage II Te Waka development will consist of 34 turbines totalling around 102 MW.

Meanwhile, the 93 MW third stage of TrustPower's Tararua wind project came online in September. The 31 Vestas 3 MW machines bring the development's cumulative installed capacity to 161 MW. The company's 200 MW Mahinerangi wind development in the South Island has also gained consent.

Another major, Meridian Energy, just commissioned its 58 MW White Hill wind farm of Vestas 2 MW units and has started preliminary work on the appeals-dogged West Wind project near Wellington, which has 62 Siemens 2.3 MW turbines already on order. Full operation is planned by mid-2009.

Meridian is one of the few in New Zealand with carbon trading experience so far, having traded credits to governments in Switzerland and the Netherlands during New Zealand's previous flirtation with carbon trading, which ended in 2005. More recently it acquired credits from Trustpower's Tararua wind farm.

Credits on eBay

The power company has even auctioned credits from its own Te Apiti wind farm via TradeMe, the New Zealand version of eBay more usually known for selling second-hand goods and cheap imports. The TradeMe venture, offering two consumer packages covering 20 tonnes of verified emission reduction units and one small business package of 1000 tonnes, attracted strong interest.

After a week of bidding, the household parcels sold for NZ$3000 (EUR 1587) and NZ$2020 (EUR 1068), with the business parcel reaching NZ$19,262 (EUR 10,189). For the household parcels, this is equivalent to NZ$200-300 (EUR 105-158) per credit, up to ten times the NZ$30 (EUR 15.88) per credit offered to individual purchasers by carboNZero. Proceeds are going to the Project Crimson cause, which supports native tree plantings.

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