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Contact accused of protectionism
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Trustpower accused a power rival yesterday of presenting a misconceived appeal based on trade competition and naked protectionism.
But it emerged at the Mahinerangi wind farm Environment Court hearing yesterday, national grid operator Transpower agreed power constraints at Roxburgh affected the ability to send power north, but it had no immediate plans to upgrade the lines.
The hearing switched to transmission issues yesterday, with the beginning of the appeal of Contact Energy.
Contact Energy wants conditions on the wind farm’s resource consents so lines capacity at Roxburgh substation and the transmission links between the Otago region and the Waitaki valley are both improved.
Contact Energy says it is being forced to spill water at the Roxburgh dam due to insufficient lines capacity and said this would only increase should the Mahinerangi wind farm be built.
But TrustPower counsel Les Taylor said the conditions sought were wholly inappropriate and would be invalid.
‘‘This is dressed up as an environmental appeal, but is to protect an existing position,’’ Mr Taylor said. ‘‘If these conditions are imposed they would usurp the electricity market.
‘‘Contact is trying to protect its privileged position and maintain high prices.
Mr Taylor said Contact energy had not quantified the level of constraint on the lines, although the joint statement by experts of all parties to the court acknowledged that export flows from the lower South Island might reach transmission capacity from time to time.
Mr Taylor said Transpower general manager grid investment Tim George acknowledged there were constraints affecting generators in the lower South Island, including a transformer at Roxburgh and the transmission system north of Roxburgh.
But he said the known problem existed in a third party’s network, and the electricity market had a system set up for transmission upgrades.
‘‘The appeal is a thinly veiled attempt to preserve uncontested access to the grid . . . and to try and preserve the ability of Contact to maximise its revenues by managing output to minimise binding constraints.’’
About a third of electricity produced at Mahinerangi wind farm would go through lines at Roxburgh.
Mr Taylor said the appeal was based on trade competition and naked protectionism.
Mr George’s evidence was the constraint at Roxburgh was not enough at present for Transpower to consider an upgrade.
Contact Energy was attempting to bring transmission capacity issues into the Resource Management Act. These were governed by a separate process, not subject to the Act.
Ultimately, the electricity market would decide the most economically efficient way of managing any such constraint, through spilling water on hydro schemes or not turning on the wind turbines, Mr McGeorge said.
It was not up to the Environment Court to consider the efficiencies of using wind instead of hydro, nor could the court consider trade competition.
By Steve Hepburn
29 April 2008
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