Contact Energy Limited Pulls Out of 168-Megawatt New Zealand Windfarm

---

Researched by Industrial Info Resources Australia (Perth, Australia)--Contact Energy Limited (NZX:CEN) (Wellington, New Zealand) has pulled out of its 168-megawatt (MW) Waikato Wind Farm project. The energy company reports that the Hauaruru na raki project will not proceed in the foreseeable future, adding pressure to the local job market and leaving the future of the wind farm uncertain.

Contact Energy has experienced many delays on the Hauaruru na riki project. Development began in 2008, and the project received final consent in 2011. Contact Energy had planned to generate up to 504 megawatts of renewable energy from the 168-turbine site.

The biggest year yet for wind installations in New Zealand was 2012, with five times New Zealand's entire electricity capacity commissioned. However, Contact Energy has decided to focus on geothermal generation and has also pulled plans for a 156-MW wind farm development near Dannevirke.

Since receiving resource consent, Contact Energy has been developing a transmission designation corridor and a bird-monitoring programme. Under the consent conditions, Contact Energy was required to undertake bird monitoring for a minimum of two years prior to construction. Details of how Contact Energy plans to make a smooth exit from Hauauru ma raki have not yet been determined.

The project has been picked up by other interested parties. WEL Networks (Hamilton, New Zealand) has expressed interest in talking to Contact Energy's partner the Wind Farm Group (Auckland, New Zealand) about its plans for the wind project.

The project is fully consented and with the right partners could be built in stages. If developed through to the construction phase, the wind farm would generate enough power for 170,000 homes and create hundreds of jobs. The project has a total estimated value of around NZ$180 million.

Contact Energy shareholders received a higher dividend after the company boosted June annual profits by 5% to NX$199 million. Analysts predict Contact Energy will boost dividends even further next year, possibly taking the next full year payout at 30 cents per share or more.

In view of a flat electricity demand, current overcapacity in electricity generation in New Zealand, and regulatory uncertainty in the electricity market, developing large-scale wind farm projects has become uneconomic in the medium term.

View Project Report - 87300053 87300054 87300060 87300064

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.