Billion-dollar geothermal power plan

Nov 30, 2006 Marta Steeman The Dominion Post

State power firm Mighty River Power has announced plans to develop more than $1 billion of geothermal power plants in the next 10 years.

The state-owned enterprise says geothermal power is a renewable energy that is more reliable than wind or hydro because it is not subject to the weather.

The programme of geothermal development is the biggest in decades.

Mighty River's plans will compete with several other power plants under construction or in the planning stages.

Genesis Energy expects to complete the building of a big gas-fired power plant at Huntly soon, while Mighty River is also completing the expansion of a smaller gas-fired plant in South Auckland. TrustPower is extending its Tararua wind farm in Manawatu. Meridian Energy is building a wind farm in Southland.

High investment in power plants is good for New Zealand, Mighty River chief executive Doug Heffernan said.

The supply of electricity was improving after power shortages in 2001, 2003 and worries of one this winter. Supplies had not looked so good for several years.

The challenge to be faced now was the limitations of the transmission system, Mr Heffernan said. Mighty River supported the building of a new line from Taupo to Auckland because it was the only way to secure electricity supplies to Auckland.

He believed that geothermal and wind farms could supply the growth in power demand for 10 years.

Mr Heffernan announced the company's plans to develop about 400 megawatts of geothermal power at the formal start of construction of the 90MW Kawerau geothermal plant yesterday. He expected the developments to take place at existing sites in the central North island. - Rotokawa, Nga Tamariki and Kawerau.

Geothermal power plants are capital intensive. The 400MW proposal is estimated to cost about $1.2 billion.

The country's other big operator of geothermal power, Contact Energy, sees opportunities to expand its plants in the central North Island and possibly to build another.