Hurdles face coal power

Solid Energy's proposed coal-fired power station in Buller is facing the same hurdles as those that killed Project Aqua.

Commentators believe coal-fired power looks more likely now Meridian Energy has canned its $1.2 billion hydro power project.

But Solid Energy's energy development manager, Andy Matheson, said the two projects were parallel rather than competitive.

"We face the same planning and resource management hurdles that have caused Aqua to run into problems," he said.

Solid Energy hoped it could still progress its plans "but it's not a clear path with all the hurdles ahead", Matheson said.

"It's our view that hydro, and thermal generation based on coal, is the ideal mix for the country - you're taking out the dry-year risk by using coal."

The state-owned enterprise had done a lot of base-line work on sites, emissions and plant design.

"It would be the cleanest plant in Australasia," Matheson said.

The proposed plant would cost up to $350 million, and burn 420,000 tonnes of coal to produce about 150MW a year.

Solid Energy had yet to firm up the site. It hoped to apply for resource consent in 2005.

It was also looking at possible coal-fired plants in Southland and the upper North Island.

Solid Energy yesterday reported a profit of $17.4 million for the six months to December 31, down 33 per cent on the same period the previous year.

Sales volume and turnover were at record levels, reaching 2.12 million tonnes and $162.2 million respectively.

Sales growth was driven by a contract signed last year to supply Genesis Power's Huntly power station.

Coal exports for the period declined because of disruption at Lyttelton caused by the port upgrading its coal handling facilities.

Solid Energy chief executive Don Elder predicted a strong ongoing performance based on rising demand for coal and opportunities for coal-fired generation.

- NZPA, STAFF REPORTER