March 28, 2007
New Zealand
New Zealand
State-owned Meridian Energy denied a newspaper report it was considering pulling the plug on its planned windfarm project at Makara, near the Cook Strait coast west of Wellington.
“I’m not considering pulling the plug. That is quite wrong,” chief executive Keith Turner told Radio New Zealand.
“Secondly, it is quite wrong to say this project may not go ahead. We are quite confident that it will go ahead.”
The Dominion Post reported today the project was threatened due to rising costs linked to the more than two years it has taken to go through the consent process.
The site is considered one of the best in the world for wind power and Meridian’s plan for a 70-turbine development could produce enough electricity for 110,000 homes.
The Dominion Post reported higher steel, transport and construction costs had pushed the estimated cost of the project up $120 million in the past two years to $500m.
It quoted Dr Turner as saying the so-called West Wind project was now only marginally viable.
The project was still being considered by the Environment Court, with a decision expected late next month or in early May.
Dr Turner told Radio NZ the original cost was actually $420m. Around $60m of the estimated $80m cost escalation was due to the fall in the value of the New Zealand dollar against the euro. Most wind turbines are made in Europe.
He did not say explain why Meridian had not taken out foreign exchange cover when the project was first considered.
Dr Turner said the economics of the project were much more positive when Meridian first began it than they are today.
“The time that it has taken to get through the consents has shifted the cost significantly.”
He refused to say what the consequences would be if the court ordered it to cut the project back by 16 turbines.
However, he said Makara was a difficult civil engineering project and its viability was based on 70 turbines.
Two years ago, Meridian abandoned its $1.2 billion Project Aqua power proposal in the Waitaki Valley in the midst of a complex consent process that cost over $50m.
However, it blamed the economics of the project rather than the consent process for its decision.
Dr Turner noted approval for other wind farms such as Te Apiti wind farm in the Tararuas and White Hill in Southland had only taken around three months.
Those districts were pragmatic and had a strong sense of identity with renewable energy, he said.
Dr Turner believed the Environment Court would take into account the Government’s move towards towards renewable energy and sustainability.
While he said there had to be a balance between local and national interests, “we do have to reflect broader national policy into these decisions but it’s quite difficult the way the RMA (Resource Management Act) is set up”.
He agreed all renewable energy projects had an effect on the natural environment and comprises had to be made.
Meridian, is about to put in a consent application for a large wind farm called Project Hayes in Central Otago.
Applications for several other wind farms would be lodged this year.
Dr Turner called for a way of streamlining the consent process where national interests are apparent.
“Two to three years to get a consent when you can build a project in one or two raises questions on whether New Zealand will have certainty about its power supply,” he said.
“We do need with renewable projects to find expedient ways, faster ways, of meeting national priorities.”
NZPA
29 March 2007
URL to article: https://www.wind-watch.org/news/2007/03/28/meridian-denies-makara-wind-farm-in-doubt/