Contact Energy to start drilling geothermal wells

Contact Energy said today it was set to start drilling the first of four new geothermal production wells at Te Mihi, north west of Taupo.

The project was expected to add a further 18 megawatts of renewable generation capacity.

Contact chief executive Steve Barrett said in a statement it was a significant investment in geothermal energy development.

Geothermal steam from the Te Mihi wells will be used to generate additional electricity at Contact's Poihipi and Wairakei Geothermal Power Stations -- enough to supply around 18,000 homes.

Drilling is scheduled to start in mid April. Each well will be approximately two kilometres deep and will take 30 days to drill.

Shares in Contact gained 2c to $6.68 in early trading today, having ranged between $5.40 and $7.30 over the past 12 months.

- NZPA