Softer Demand for Electricity Delays 490 Megawatts of Wind Projects in New Zealand

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Researched by Industrial Info Resources Australia (Perth, Australia)--As much as $700 million in windfarm investments by Mighty River Power Limited (Auckland, New Zealand) will be delayed due to the stagnant electricity market in New Zealand, with two major projects held up in the permitting process.

Puketoi Windfarm (310 MW) in Dannevirke and Turitea Windfarm (180 MW) in Palmerston North are on hold. Mighty River Power said that it wanted to better understand the market conditions for electricity demand in the region before continuing with the projects.

The Puketoi project initially was awarded with conditional resource consents in June 2012, which was subject to appeals from local communities. After a yearlong wait, the project recently was given final go-ahead and was granted final resource consents. Following the three appellant submissions from landowners, local communities withdrew from the Environment Court. Mighty River was pleased to get through all three appeals without the need for a hearing in the Environment Court.

Resource consents also were granted for the Mighty River's Turitea Windfarm at the same time. Both of the windfarms now have consent, which is valid for 10 years with a lapse period ending 2023. The total approved capacity for the two windfarms is approximately 490 MW.

The company was very pleased to get approvals from the Environment Court without a hearing. However, the consents do not favour much in terms of the project's further development activities, due to the soft demand for electricity in New Zealand.

"Although the company is unlikely to build a new power station in the next three to five years, generation projects require long lead times," said Mark Trigg, the general manager for Mighty River Power's development. "The securing of consents and exploration of projects form steps in a lengthy process that positions the company to proceed as demand and economic conditions allow."

On the same note, another electricity giant, Meridian Energy Limited (Wellington, New Zealand), recently declared its intentions to delay two major windfarm developments in New Zealand for the same reason. For more information, see June 12, 2013, article - Meridian Delays Major Windfarm Developments in New Zealand.

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