Plug pulled on tidal turbine projects

By Anthony Doesburg

The water flowing in and out of the Kaipara Harbour mouth was to turn 200 turbines, producing enough power for 250,000 homes.  Photo / MICHAEL CUNNINGHAM
The water flowing in and out of the Kaipara Harbour mouth was to turn 200 turbines, producing enough power for 250,000 homes. Photo / MICHAEL CUNNINGHAM

Clean technology: The tide has gone out on the New Zealand marine energy sector leaving every one of half a dozen proposed schemes high and dry.

If it wasn't electricity market uncertainty or lack of political will that killed them off, unco-operative power companies, councils and local communities get the blame.

Projects ranging from a 200-turbine tidal stream power station in the Kaipara Harbour to a tiny effort to use the tide to drive pumps at Auckland's Parnell Baths are either on hold or have been abandoned.

Yet Craig Stevens, co-chairman of marine energy body Awatea, says it's not all over for the industry. Whereas projects to date have focused on "contributing megawatts to the national grid", he thinks establishing a marine energy industry is a long game, comparable to the 30 to 40 years it has taken wind power to become mainstream. "We're talking two decades before this stuff kicks in."

To get there, Awatea advocates a shift of emphasis to skills development and innovation, with a view to capitalising on global interest in low-carbon energy generation. "We're looking at serious climate change scenarios over the next 30 to 100 years and you have to have commensurate time-scales for your vision for energy."

In the short term, Awatea is pinning its hopes on a new political climate beyond the next general election that is more conducive to developing the sector. "Depending on how the cards fall, there may be more of an emphasis on renewable energy. There may be more support, at least at the R&D level, for renewable energy."

Misdirection of state financial support, rather than a shortage of it, has stymied efforts thus far. Several projects were awarded sums totalling more than $6 million from a special Energy Efficiency and Conservation Authority (EECA) fund from 2007 to 2011. But most of the money has gone unspent because of the strict conditions attached to it. "That suggests EECA was somewhat ambitious in what it thought these first developments might achieve. It could have cut them a little more slack," Stevens says.

A more promising use of money is a Marsden Fund allocation of nearly $1 million to University of Otago marine scientist Ross Vennell for research into large-scale tidal turbine farms.

Crest Energy, the company behind the 200-megawatt Kaipara plan, which would have powered 250,000 homes, has put the project on hold. Founding director Anthony Hopkins, who has since sold all but a "minuscule" number of his shares in the company to Todd Energy, says numerous factors conspired to sink the project - at least for the foreseeable future.

Chief among them is the uncertainty hanging over the electricity market courtesy of the Tiwai Point aluminium smelter. If the smelter eventually shuts down - it's immediate future has been secured by a new supply contract and $30 million Government handout - the market will be swamped with electricity. With national electricity demand growing at a typical two per cent a year, it would take up to seven years for consumers to soak up the unused smelter supply.

Other unknowns, Hopkins says, are the long-term impact of the Government's partial privatisation of generators Mighty River Power, Meridian Energy and Genesis Energy, and the possibility that a change of government could see Labour and the Greens creating a single wholesale electricity buying body.

Adding insult to injury is the relatively sudden diversion of investment from renewables into the likes of shale oil and gas made available by fracking, which has turned the US into a net energy exporter. "World carbon markets and world energy markets have been turned on their heads by fracking," says Hopkins, who spent more than three years getting resource consent for the Kaipara project.

"It means we're on hold until there is some clarity on where all that big-picture stuff is going." Two other projects - Neptune Power's Cook Strait turbine and Wave Energy Technology's trial - are headed the same way.

If there was hope, it was for small projects. However, the one with the best chance of going into production, on the Chatham Islands, has also shut up shop. Gary Venus, of Chatham Islands Marine Energy, says failure to reach an agreement with the islands' electricity supplier brought plans to a halt at the start of the year, so EECA funding of $2.16 million wasn't taken up.

The company has turned its attention to a project in Tonga. Also to have the plug pulled was a two-turbine plan in the heart of Auckland. Community Leisure Management, which runs Parnell baths, received funding to generate electricity from the tidal flow in and out of Hobson Bay to power the saltwater pools' pumps.

"The challenges we faced getting resource consent and iwi approval, and the time frame we were pushed into by EECA, made it all too awkward," says Community Leisure Management director Joe Griffin. "It was disappointing but that's life."

For now, maybe. But Awatea's Stevens hasn't given up, saying the organisation has funding to come up with ideas for the establishment of a marine energy centre in the Wellington region.

"It could be used to test devices but hopefully there would also be university involvement to educate people in the field."

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