By Marta Steeman
State power company Genesis has pulled the plug on a small wind farm in south Auckland because of the soaring cost of wind turbines.
But Meridian says its Makara wind farm still looks viable.
Developers of wind farms are reviewing the costs of projects amid hot international demand for turbines, which is driving up the costs of the machinery.
Genesis public affairs spokesman Richard Gordon said there had been a 30 per cent rise in the cost of wind turbines since Genesis started examining the Awhitu wind farm project 18 months ago.
The cost of the turbines was a large part of Awhitu’s development costs. But the fall in the New Zealand dollar had not been critical, he said.
Genesis had weighed up the costs against the potential electricity production and wholesale electricity price forecasts and concluded Awhitu would be uneconomic for 20 years.
The Genesis wind farm of less than 20 megawatts is small compared with Meridian’s proposed 70-turbine, 210MW wind farm at Makara, 20 kilometres out of Wellington on the south-west coast.
Mr Gordon said Genesis would keep reviewing the economics. Under its resource consent it had to start construction of the wind farm within five years.
The huge demand for turbines was driven by American states subsidising wind farms, Mr Gordon said. It was unclear how long that would last.
Meridian’s external relations adviser, Alan Seay, said Meridian was unlikely to axe its West Wind farm at Makara. It was expecting a decision from the Environment Court soon on the appeal against the project.
West Wind is on a much larger scale than the Genesis wind farm, with Meridian buying turbines in bulk, which would help the economics.
Mr Seay said the higher cost of machinery might force up the price of the electricity from a wind farm. “I wouldn’t want to start speculating whether that would be the case with West Wind yet.”
Hawke’s Bay electricity network company Unison, which is planning a big wind farm near Napier, said it was undertaking an assessment and would make a decision in about six weeks on whether to proceed.
Unison was planning to have the wind farm up and running by late 2008.
Its partner in the development is Roaring 40s, a company formed by Australian state power company Hydro Tasmania and China Light and Power.
Unison said the cost of producing electricity from the wind farm was likely to be more than 8c a kilowatt hour.
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