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Wind a dry year saviour from hydro dependency
1 July 2001
New Zealanders were hit with the first snows of winter and an announcement that electricity prices could more than triple to NZ$0.25/kWh from the current NZ$0.08/kWh. Today's price is up from the NZ$0.03/ kWh of last year. Although bad news for some, it could be a boon for the country's nascent wind energy sector, according to enthusiast Geoff Henderson. "Through investment in wind energy New Zealanders can be confident of an alternative, sustainable source of energy to complement and support the existing hydropower. This will translate to lower wholesale prices in dry years," Henderson says. New Zealand relies heavily on hydro-generation, making it vulnerable in years of low rainfall. Already this year, North Island generation has had to be sent south to supplement the South Island's power, with an increased use of northern gas-fired plants. "Wind power is the least-cost form of renewable energy," says Henderson. "It is cheaper than building new hydro-stations and eminently more sensible; we have so much hydro already and don't want to increase our dry-year vulnerability. It can also be installed quickly and in much smaller increments than hydro projects. This reduces financing costs and over-supply risks." It's an area which Henderson is vitally concerned with as director and CEO of Windflow Technology, which recently puts its wind energy development prospects to the market. The share offering has raised NZ$1.1 million -- just over half its minimum target -- from 180 investors, but was due to close on June 26. Financial projections in the offering were based on a likely wholesale electricity price of around NZ$0.04-0.05/kWh, so Henderson is watching the current price discussions with interest. For the first wind turbine he has clinched a ten year power purchase contract with Christchurch City Council, which, together with a grid connection agreement with Orion NZ, guarantees it an income of NZ$0.058/kWh.
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