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North Wellington wind farm likely

A decision to build the Mill Creek wind farm is imminent, with Meridian Energy’s board of directors poised to approve the $175 million project.

On Monday, chief executive Mark Binns denied the company had already decided to proceed with the 26-turbine wind farm in Ohariu Valley, north of Wellington, but conceded a decision was “very close” and the “stars are aligned” for the project.

Analysts say Mill Creek is already being presented as a done deal to the investment community.

Mill Creek is virtually a northern extension of West Wind, the 142-megawatt wind farm in Makara, west of Wellington.

Meridian was given resource consent in 2009 for a much smaller project capable of generating 60 megawatts, enough to power 35,000 homes.

The consent was upheld by the Environment Court last August after an appeal by affected residents.

Mr Binns, who joined Meridian as chief executive in January, said despite there being little growth in demand for electricity in New Zealand, several factors were working in Mill Creek’s favour.

Its proximity to West Wind gave the company a detailed understanding of the area’s wind patterns, Mr Binns said, while turbine prices had plunged as a result of falling demand in Europe and a strong New Zealand dollar.

Meridian’s rivals say the electricity market is saturated with generation capacity and that major projects are not needed until the economy grows and demand is boosted.

Late on Monday night Genesis Energy was given approval to build the massive Castle Hill wind farm, 20 kilometres northeast of Masterton, but on a smaller scale than the 860 megawatts it applied for.

The original application was for turbines up to 155 metres high and the wind farm was set to be the biggest in the southern hemisphere.

Spokesman Richard Gordon said the approval did not mean Genesis would go ahead with the project, at least in the near term.

“Our view now is that the market is saturated with generation capacity and there’s no particular need to build new capacity of any type right now.”

Grant Swanepoel, an analyst at Craigs Investment Partners, said Mill Creek was on a relatively small scale, and Mr Binns had shown a willingness to abandon projects that were unlikely to be economic, such as the giant Project Hayes in Central Otago.

“This was well signalled to the market a few months back, and compared to the build programme we were expecting from Meridian a year or two ago, it’s much more subdued under the new Mark Binns regime,” Mr Swanepoel said.

Ohariu Valley Preservation Society president Siobhan Lilley said the group had run out of avenues to fight the project. But its opposition remained as strong as ever, with the turbines “much too close” to residents’ homes.

The shape of the hills around Makara meant some people were constantly impacted by the noise of the West Wind turbines, while others were unaffected, Mrs Lilley said.

This had sparked uncertainty among those close to the proposed site for Mill Creek.

“A lot of people are feeling it’s a bit like Russian roulette, whether they’re going to be hugely impacted by the noise or not.”