$400m Contact Energy wind farm not viable, says consultant
Credit: James Weir, BusinessDay.co.nz www.stuff.co.nz 3 December 2010 ~~
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Contact Energy is not expected to build a $400 million wind farm near Dannevirke because it is not commercially viable, according to an independent energy consultant.
Contact this week won an appeal to build the wind farm with 58 turbines up to 125 metres high, or 52 turbines 150m high.
Contact’s consent is for five years and it is not saying when the project might get built other than “when market conditions allow”.
But energy consultant Bryan Leyland says the numbers do not stack up for the Dannevirke wind farm.
“My guess is that they [Contact] have no intention of building it.”
There was also a “reasonable chance” Contact’s other proposed wind farm between Port Waikato and Raglan would never get built.
On Tuesday, local opponents said they were “deeply disappointed” after losing a $150,000 legal battle against Contact.
Christchurch businessman Mark Stewart said yesterday the Government needed to take urgent action to protect the rights of landowners in the wake of Contact’s victory. Mr Stewart is fighting Contact’s other wind farm proposal in Waikato and has spent $600,000 on it so far.
Australian-controlled Contact had been able to “out-muscle” local landowners who did not have the means to keep up the fight.
Mr Stewart said landowners would have to live with five years of uncertainty while Contact made up its mind, while “property prices are blighted” and he wanted to see a fairer process for compensation and greater access to information from privately-owned companies like Contact.
Mr Leyland said power companies were locking up the wind resource so nobody else could get it, while making themselves look good to the Government and those who believed in wind power. Mr Leyland has been an expert witness in four wind farm consent hearings and attacked all of them on their economics. “It is not a good use of the nation’s resource.”
It would cost $3000 to $3500 a kilowatt to build a wind farm, with 80 per cent of the cost in the turbines themselves.
That would equate to a cost of production of about 12 cents a kilowatt hour. By comparison, coal or geothermal stations would cost between 8c and 10c, which did not need back up for when the wind did not blow.
A Contact spokeswoman said the Dannevirke wind farm would only go ahead when “market conditions allowed” and work on its commercial viability needed to be done.
Contact said the most attractive option for new generation was geothermal power followed by wind.
Meanwhile, Mr Stewart said his wife’s parents, who are in their 60s, face uncertainty for years because of Contact’s plan to run pylons through their Waikato land from the wind turbines to the national grid.
That meant there were no buyers for the farm, because nobody would want it with the risk of pylons and 158 wind turbines starting only 3kms away.
The land value had fallen as much as 30 per cent but the compensation for running the transmission lines through the land was “less than 5 per cent” of the value of the land as a one-off payment.
In contrast, landowners with turbines on them would get between $20,000 and $30,000 for each turbine, each year.
“Some people have won Lotto, yet their neighbour ends up with a 30 per cent drop in the value of their land and nowhere to go,” he said.
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