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Genesis may revive plan for $1.6 billion wind farm at Castle Hill

Genesis Energy may dust off plans for a wind farm at Castle Hill in Wairarapa, where it once envisaged investing $1.6 billion in a huge power project.

The company signalled in December it wanted to source more renewable electricity by 2025.

Spokesman Chris Mirams said Castle Hill “remains an option alongside other new renewable electricity builds Genesis will be considering”, noting its resource consent would not expire until 2023.

However, he qualified that by saying there were “no immediate construction plans”.

The company secured approval from the Environment Court in 2013 to erect up to 286 wind turbines with a total output of 860MW at the site, on 30,000 hectares of hillside grazing land east of Eketahuna.

That plan would have made Castle Hill by far the largest wind farm in New Zealand, which currently has a total of 690MW of wind generation, according to the Ministry of Business, Innovation and Employment.

Castle Hill is also by far the largest of several fully consented wind farms that will lose their resource consents if work does not begin on them in 2023 or 2024.

The Wind Energy Association estimated in 2019 that New Zealand would need another 1000 wind turbines by 2050.

That was based on a ministry report – made prior to the Government targeting 100 per cent renewable electricity by 2030 – that said the industry would need to invest $12b to meet rising demand for power.

Genesis described Castle Hill, in its original resource application in 2011, as “arguably one of the best wind energy resources in the world”.

It said then it would make “a material contribution to meeting projected demand growth and to enabling the generation of 90 per cent of electricity needs from renewable sources”.

But by the time Genesis had secured approval for the development from the Environment Court in 2013, its interest had cooled.

Shortly before its court win, Genesis indicated it did not intend to build the wind farm any time soon and it has since removed reference to the possible investment from its website.

In 2016 – encouraged by Meridian Energy – Genesis shelved a plan to close the coal turbines at its Huntly power station by 2018, in the first of two apparent backslides on phasing out fossil fuels.

Genesis indicated in 2019 when it still seemed cool on the Castle Hill investment that it would need to modify its resource consent for the project to reflect new technology, if it ever went ahead.

Mirams indicated Genesis would not make further, fresh comment on its intentions for Castle Hill beyond now saying it remains an option it will be considering.

That leaves open the question of exactly how serious it might now be about developing the site or on what scale.

David Nelson, who chaired the Castle Hill Wind Farm Community Action Group at the time of the Environment Court hearing, said the wind farm – as first proposed – would have been the largest in the southern hemisphere.

But he said there were rumours about a year ago that Genesis had stopped paying retainers to some landowners on more fringe areas of the site.

That might suggest that if the project did go ahead, it might be on a smaller scale, he said.

”We have heard nothing about the potential to build the wind farm officially.”

Nelson said the community group had been reasonably happy with the conditions that were imposed on the potential development of the site by the Environment Court.

Although there were a handful of people opposed to any development, it would be wrong to say the community group was opposed to the scheme, he said.

Instead, its concerns had been more about the mitigation of some of its impacts and Genesis’ past attitude, he said.

“They could have taken the community with them but what they did was separate the landowners out and get very offside with the rest of the community, which was totally unnecessary.”

It would be interesting to see what Genesis’ attitude would be under its new chief executive if the project was revived, he said.

Critics of the current electricity market model believe it dampens the incentives on generators to spend as much as they should on new renewable power as well as keeping the wholesale price of electricity high.

But the pace of investment in new generating capacity is expected to pick up from its low base and Genesis has been talking up its plans for green energy in recent weeks.

In December, it committed to reducing its emissions from generation by a further 36 per cent by 2025 from its 2020 base.

It said it aimed to secure 2650 gigawatt-hours a year of renewable electricity generation by 2030, with the majority of that coming online before 2025.

Chief executive Marc England said that would ensure New Zealand generated more than 90 per cent of its electricity from renewables.

That would be up from the current level of 84 per cent, around which the industry has been stuck for several years.

Meridian chief executive Neal Barclay said on Monday that it was also “poised to invest in supporting our customers to transition to clean energy solutions”.

“We already know it is cheaper to build and operate new renewable projects like wind and solar, than coal and gas-based generation,” he said.