KEY POINTS:
Contact Energy has entered into agreements with Nevada-based geothermal power company Ormat to supply and build a 23.3 megawatt binary power station in Taupo for $60 million.
Contact said today it had already drilled the wells needed to power the station as part of a programme to appraise the Tauhara steamfield.
The total cost to deliver the project was expected to be about $100m, including works already done, Contact said.
There has been a great resurgence of interest in geothermal energy over the past few years, with state owned company Mighty River Power also constructing new stations.
Its new Kawerau geothermal station is due to come fully on stream two months ahead of schedule, and provide as much power as a hydro station or wind farm with more than twice its capacity.
The $300 million station would be cranked up progressively throughout this month and should be running at full capacity in August.
The 90MW of power produced was the equivalent of a 250MW wind farm or hydro station because it could produce power constantly.
The Kawerau power station is set on industrial newsprint maker Norske Skog Tasman's land.
The pulp and paper industry located in the area during the 1950s to take advantage of the steam field.
Kawerau is the first stage in Mighty River's plans to develop about 400MW of geothermal energy in the next five to 10 years, enough power for 400,000 homes.
Ormat, the firm picked by Contact for its new station, supplied and built the Wairakei binary plant for Contact in 2004 and the new binary power station would follow a similar design.
The Tauhara binary power station would be commissioned during 2010 and represented the first stage of Contact's development of the Tauhara steamfield.
Contact is also planning to build a geothermal power station of between 200 and 240 megawatts on the Tauhara steamfield and said it expected to file resource consents for that project in the first half of 2009.
Contact shares closed at $7.99 yesterday, having ranged between $6.91 and $10.15 in the past year.
- NZPA
