February 8, 2008
New Zealand

Energy consultant backs Te Uku wind farm

An energy investment consultant is recommending Wel Networks proceed with its $200 million Te Uku wind farm, describing the project as financially viable if all planned turbines are accepted.

Paul Callow, a Wellington-based Deloitte partner, is one of 13 expert witnesses due to add fresh puff to the protracted Te Uku wind farm hearing when it resumes in Ngaruawahia on February 19.

Wel Networks is seeking to build a 28-turbine wind farm, but the hearing was adjourned in November after submitters notably Aotea Harbour’s Sean Cox raised a host of questions about the economic case for it.

In his evidence, now available on line at www.wel.co.nz, Mr Callow concludes the project has a “net present value” of $4.543 million if the 28-turbine configuration is retained.

However, he warns that the removal of one controversial, but high-yielding, turbine 3.5km from Hidden Valley would make a big difference.

“(It) would leave the project with very questionable economics and, given the early stage of its development and the uncertainty remaining around many of the costs still to be incurred, may make it difficult for Wel to justify continuing with the project.

“Removal of further turbines would render the project uneconomic to proceed with.”

Mr Callow savaged the evidence of Mr Cox, a former wind farm designer, who concluded the project was not commercially viable.

“His very limited financial analysis is flawed in every respect, and his assertion that an electricity company would knowingly spend almost $200 million on a project it knew to be `bad’ reflects a fundamental lack of appreciation of the decision-making processes a large corporate, particularly one ultimately responsible to a community-owned trust, follows before committing to a major investment decision.”

That amused Mr Cox, who called the new evidence “bizarre”.

“It is more of the same old waffle except for the bit where they agree with my wind numbers.


Most of the new submissions seek to forensically rebut Mr Cox’s earlier submissions that the project does not stack up.

Andrew Keeley, a Melbourne wind power engineer, looks at Wel’s monitoring data collected at Te Uku, and concludes the site has a strong wind resource.

Electricity generation consultant Roger Burchett says that while wind speed and energy output are critical to the project, commercial viability also hinges on capital and operating costs, debt levels, and the electricity price path.

“I find it quite surprising that Mr Cox considers that he has the technical knowledge and ability to make an assessment about the viability of this project, based on his own wind speed measurements, his own assumptions on costs, revenues and financial arrangements,” Mr Burchett says.

By Bruce Holloway

Waikato Times

8 February 2008

URL to article:  https://www.wind-watch.org/news/2008/02/08/energy-consultant-backs-te-uku-wind-farm/