October 13, 2006
New Zealand

Genesis wants wind farm stakes

State power company Genesis Energy is eyeing up two big proposed wind farms in Hawke’s Bay.

Chief executive Murray Jackson said Genesis was interested in taking an equity stake and not just buying the power from the wind farms “because you want to be at the (board) table”.

One of the wind farms is being developed by Hawke’s Bay electricity lines company Unison with Australian partner Roaring Forties.

The first stage of this wind farm is 45 megawatts on the Titiokura Saddle, 35 kilometres northwest of Napier, and the second stage is 110MW in the nearby Te Waka Range.

The other wind farm Genesis is interested in is a large-scale 225MW, $350 million project in Maungaharuru Range. It is being set up by Hawke’s Bay Wind Farm, controlled by Wellington wind farm developer Alistair Wilson and Hawke’s Bay and Wairarapa partners.

Mr Wilson is a founder and owner of the project’s developer, Wind Farm Developments, which typically develops wind farms to the consent stage and sells them to parties with deeper pockets to build.

His partners in Hawke’s Bay Wind Farm are Eastern Capital, owned by Andy Lowe and family interests, and Hallblock Resources, owned by Pahiatua’s Usherwood and Davey families.

Mr Jackson said the two farms with separate developers would work well as one. They were close to each other and there would be cost savings.

Mr Jackson said wind farms needed a government subsidy to be economic. There had been a big rise in the cost of turbines because of a wave of wind farm development in the United States and Europe and the fall in the New Zealand dollar.

Genesis had put the 18MW Awhitu wind farm, in south Auckland, on hold because it was not viable at present. The small size of the one megawatt turbines did not help the economics but it would not be acceptable to the community to have large 3MW turbines at the coastal location.

He estimated a small wind farm would need a 3c a kilowatt hour subsidy and larger wind farms 1.5c kwh subsidy to be economic.

Mr Wilson said Genesis’ interest was news to him. Genesis would not be the only interested party.

He said Hawke’s Bay Wind Farm had not yet considered funding or the question of equity partners.

It was still assessing the economics and the key to that was the Government’s climate change policy and the carbon-price mechanism it chose to use after dumping the carbon tax last year.

The carbon-price mechanism would raise the price of electricity from thermal power plants (coal, oil and gas fired) and raise the wholesale price of electricity overall.

A higher wholesale electricity price could mean wind farms were economic.

Knowing the carbon price signal would give wind farm developers certainty.

If the carbon price signals did not make wind economic “people will be saying to the Government: you need to do more if you want these things,” Mr Wilson said.

In the United States a tax credit of US1.5c kwh for renewables was driving a lot of construction. The tax credit was turned on and off by the US administration.

It had been off for three years with many wind farm proposals backed up. Now that it was back on there was a rush for turbines, resulting in tight supply.

By Marta Steeman


URL to article:  https://www.wind-watch.org/news/2006/10/13/genesis-wants-wind-farm-stakes/