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Price spike linked to lack of wind  

Wholesale electricity prices have been high in the past couple of months, but only in part because of lack of breezes to run the country’s wind turbines, says the Wind Energy Association.

It is holding its annual conference in Wellington in a fortnight. Energy Minister David Parker and National’s energy spokesman, Gerry Brownlee, will speak.

A year ago, the average wholesale cost of energy was just under 6c a unit, but it has often been more than double that in recent weeks. Spot prices were about 14c on Sunday.

One of the biggest price spikes was early last month, when prices went above 22c a unit and the expensive Whirinaki diesel generation ran for part of the day.

Meanwhile, output from Te Apiti wind farm in Manawatu fell to nothing in a brief period of still weather, before returning to near its maximum capacity of 90 megawatts a few hours later.

Some industry watchers fear that a growing reliance on wind power, perhaps 10 per cent to 15 per cent in the future, may mean the power system is at greater risk when there is no wind.

But Wind Energy Association chief executive Fraser Clark said almost all wind power was now produced in Manawatu. “All it takes is for there to be no wind in the Manawatu and it looks like wind is not making much of a contribution,” he said.

“The absence of wind might have been the tipping point for Whirinaki to come on.”

But it was not just the loss of wind, because Whirinaki was still running when the Te Apiti wind farm resumed near full production.

“We were a contributor, but [lack of wind] was not the only cause, ” he said of high prices.

High wholesale power prices recently also reflected a combination of events: low hydro-electric lake levels at 81 per cent of average, part of the Cook Strait cable out of action, Contact Energy’s big Stratford power station closed for maintenance and high Waikato River temperatures, limiting Huntly power station output.

Stratford should restart in the next fortnight.

“There are much bigger contingencies than the loss of wind,” Mr Clark said.

Even in Manawatu, it was “quite rare” that none of the existing wind farms were working at the same time. They ran about 90 per cent of the time, though they might be at full capacity for only 45 per cent of a year.

But a spread of wind farms in the future should help tp ensure a breeze somewhere kept some turbines spinning.

Up to 11 big wind farms are planned, each producing more than 100 megawatts, from the Far North to Southland, including Hawke’s Bay and Waikato.

Last week, state-owned Mighty River Power said a 200-megawatt wind farm could be built in the Puketoi Range east of Pahiatua.

It has signed agreements with 17 land owners in the area so it can investigate the potential further, including wind testing for about 18 months.

New Zealand’s wind turbines now produce about 320 megawatts at full capacity, but by the end of next year that should be almost 500 megawatts.

The Government wants 90 per cent renewable power by 2025, compared with about 70 per cent now, from wind, hydro and geothermal plants.

The Wind Energy Association says that, depending on the economics, wind production could be expanded to 2000 to 5000 megawatts total capacity over time.

Power prices are expected to rise before some wind projects become economic. Some industry players suggest a 30 per cent to 40 per cent rise in wholesale prices is needed over time. That would take the cost to between 8.5c and 10c a unit.

In time, wind may account for 10 per cent to 15 per cent of all power produced in New Zealand.

“The realistic figure is somewhere between 2000 and 3000 megawatts, through the country,” Mr Clark said. That may lead to 10 to 15 large wind farms and many smaller projects.

By James Weir

The Dominion Post


25 March 2008

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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