Most New Zealand Environment Court appeals against wind farms come from local environmental or residents' groups, but Meridian Energy recently found itself facing an appeal from fellow generator Contact Energy. The appeal has now been withdrawn, but the action raised eyebrows and fuelled further pessimistic comments regarding the country's stretched transmission system. Contact Energy lodged its appeal against Meridian's planned Project Hayes wind farm, a 176 turbine development rated at 630 MW in the South Island's Central Otago region. The company was concerned that transmission constraints would restrict the amount of energy sent north to the high electricity-demanding regions of the North Island. As a result, Contact feared that, at times of high wind generation, it would be forced to spill water out of its South Island hydro system, losing income from generation in the process. Meridian and Contact have now agreed to campaign strongly for an upgrade to the South Island transmission system to give it the capacity to cope with current and future generation. The lower South Island is seeing increasing interest from firms looking to build wind farms. Investment in transmission has been a hot topic for the industry and wires operator Transpower is seeking approval from the Electricity Commission for a major upgrade to the grid.