"Challenge" was the buzzword at this year's New Zealand Wind Energy Association (NZWEA) conference. Speaker after speaker used the word, whether with reference to the technical aspects of wind farm development, from digging cable channels to coping with New Zealand's notoriously blustery winds, or discussing the implications of political changes or how to deal with highly public opposition to wind farms. The conference was the largest of the past 11 years -- a fitting tribute to an industry which put 151 MW of new wind plant online last year to bring the national total to 322 MW in eight wind farms -- with 270 participants and a relatively extensive exhibition area. The event saw a strong influx if visitors from overseas and third-party suppliers from construction and maintenance operations.
Wind power proponents in New Zealand are upbeat about the Labour government's goal to have 90% of the country's energy from renewable sources by 2025, up from 65% today. Wind supplies 2.5% of the renewables' contribution, which otherwise comes largely from hydro power. "We have enviable natural resources and the economics of investment in renewables, particularly geothermal and wind, are already viable," energy minister David Parker told delegates.
The National Party's energy spokesman, Gerry Brownlee naturally challenged the government's record, pointing out that coal use had trebled since the Labour Party took office nine years ago. His party sees the 90% renewables target as a laudable one. But Brownlee noted the challenge of economically exploiting the country's renewable resources while guaranteeing security of supply and at the same time dealing with concerns about wind turbines littering the countryside -- hitting most of the conference themes in one sentence. With this year being an election year and the National Party well ahead in the polls, its recent conversion to renewables, climate change policy and related issues could be significant.
Unlike in most other countries, the New Zealand wind energy market has developed without any form of specific government subsidy, tax break or other practical support measures, although it did benefit from a short-lived market for carbon credit trade. Industry proponents state rather ruefully that perhaps they did "too good a job" in convincing the government that wind was commercially viable in New Zealand. They laughed hollowly when keynote speaker Maria McCaffery of the British Wind Energy Association referred to government support mechanisms as one of three important legs for the uptake of renewable energy.
On the policy front, a proposed Emissions Trading Scheme is set to provide a framework for pricing greenhouse gas emissions, while a National Policy Statement aims to provide a balance between issues of concern to local authorities and the "national significance of a reliable and secure electricity supply." Under the policy, the environment ministry can "call-in" consent applications for nationally significant projects and refer them directly to the Environment Court in a one-step process. Parker says the new system will "save developers, objectors and councils the time, stress and cost of two hearings where an appeal seems almost inevitable." The first use of the call-in practice, for the 102 MW Te Waka wind farm proposal, caused some head scratching, with industry players asking why that particular project was seen as nationally significant and not other, larger proposals.
Wind turbine shortages
The issue of equipment supply for wind farms was a much discussed challenge, with New Zealand project developers keenly aware of their relatively low ranking in the global market. Currency exchange rates contribute the single most significant factor in large-scale development, with the slide of the US dollar against the euro causing problems.
Bernie Norton of Siemens (NZ) asked whether competitive tendering on individual projects was the best way to operate in a constrained market, suggesting that negotiated contracts may provide a better solution and help cement the necessary long-term relationships between supplier and user. From NZWEA, CEO Fraser Clark stated firmly that "New Zealand developers cannot expect preferential service -- they need to demonstrate knowledge, capability and the ability to reduce the risk for the turbine supplier".
Constant mention of supply challenges proved too much for Geoff Henderson, founder of New Zealand's only home-grown wind turbine supplier, Windflow Technology. He plaintively asked the conference's final session: "What are we? Invisible?" Henderson has championed local manufacture for many years, and Windflow has expanded its production base and recently bought its blade maker as part of its contract to supply a total of 97 turbines to NZ Windfarms' Te Rere Hau development, a joint venture with NP Power Pty Limited and Babcock & Brown Windpower Pty Limited.
Windflow's Sheralee MacDonald says that the 500 kW Windflow turbine is under consideration for MainPower's proposed wind farm at Mt Cass, east of Waipara in North Canterbury, South Island. MainPower, which operates the electricity network in North Canterbury and Kaikoura, is aiming for the region to be energy self-sufficient from renewables. It currently imports all its power. Although the Windflow's relatively small size means that 83 turbines are required in MainPower's current project configuration, use of the model means less logistical load compared to larger machines, said MacDonald. "Smaller development companies are looking to do local development utilising sites with limited access, reduced impacts and fewer visual amenity concerns," she added. Chris Freear, CEO of NZ Windfarms, noted the importance of smaller players, predicting a strong future for "smaller, smarter distributed generation."
Adam Muldoon, wind project development manager for major player Meridian Energy, championed a different view, noting that New Zealand's wind developments tend to follow an "offshore arrangement onshore." Once the consenting hurdle is cleared, he sees strong advantages in larger-sized, fewer turbines requiring lower maintenance.
Allen James, a wind project manager with Siemens (NZ), noted the challenge of getting equipment across the world to New Zealand -- and the even more challenging problem of getting 40 metre blades up the narrow winding hill roads which typically serve the best sites. Road building and construction issues play a very important role in development and the NZWEA conference saw strong input from civil contractors who cited not only the problem of challenging terrain, but also the lack of continuity in project development which makes investment in staff and equipment a tough challenge.
Locations for construction and the implications for security of supply formed a recurring conference theme. The country's Electricity Commission has released a draft report regarding potential renewable generation sites and the transmission investments needed to support them, as part of moves to encourage diversity of sources and locations. The importance of that was echoed by Charlie Smith who heads the United States' Utility Wind Integration Group. "You need adequate geographical diversity to avoid the problem of losing wind," he said.
Putting more and more wind capacity in the Manawatu region makes sense from a wind resource point of view, but has implications for security of supply. Observational work and modelling comparing wind output in the Manawatu and White Hills wind farms has shown that even the relatively limited diversification to date has had a good effect, with good odds that there will be a reasonably high level of wind generation during peak times. While the Electricity Commission is keen to see wind farms dispersed more broadly, the South Island's potential is highly limited due to the economic factors associated with access to the HVDC line that takes electricity across Cook Strait to the major North Island markets.
A full technical session looked at integration issues, taking examples from research and real-world applications overseas to discuss how interconnection implications could be planned for and managed. The three developments of Te Apiti (91 MW), White Hill (58 MW) and the now building West Wind project at 143 MW -- provided local models of different approaches over time, indicating how fast the industry is changing. The general feeling seemed to be that while the technical challenges were important ones, they could be readily addressed. Economic challenges, such as investment in transmission, electricity pricing and exchange rate fluctuations, may present a harder nut to crack.
New Zealand's potential for wind energy has never been challenged. The country's wind farms continue to outperform the rest of the world with an average 40.7% capacity factor -- nearly double that of the global average. Adam Muldoon described them as "humming along." That may have been an uncharacteristic understatement on his part, given that Te Apiti hit a 62% capacity factor at the end of last year and White Hill has been reaching capacity factors slightly higher than that since its recent commissioning.
A further 165 MW of wind capacity is under construction in two projects in the south of the North Island and likely to be commissioned within a year. In addition, 1064 MW of consent applications have reached the Environment Court phase of the permitting process; 376.6 MW has gained consent; and 459 MW are in the initial stages of seeking consent, with yet more under investigation. NZWEA's Clark believes that 2500-3000 MW of installed capacity by 2025 "appears reasonable."
Energy minister Parker raised some hackles with the throw-away line that "we don't want to see wind turbines on every ridgeline." Clarke later countered this with the suggestion that the use of larger machines, of around 1.9 MW, would necessitate "a turbine on a very occasional ridgeline." The 2025 target will require 175 MW of new wind generation to be built every year until then.