Meridian rejects the spin on wind

By BRIAN FALLOW


Electricity prices will rise more slowly if wind power is developed rather than coal or imported liquefied natural gas, says Meridian Energy's chief executive.

Dr Keith Turner believes the public is being softened up by thermal generators to accept either imported LNG or coal as the fuel for future electricity generation, on the grounds that renewables such as wind power are too expensive, too unreliable or too small a resource to deliver the security of supply consumers demand.

He said it was none of those things and would avoid the costs and risks of emitting greenhouse gases in a world increasingly inclined to put a price on doing so.

New Zealand could generate 2500-3000 gigawatt hours [GWh] of electricity - the equivalent of three or four years' growth in electricity demand - at prices of 6c a kilowatt hour or lower.

By contrast, industry sources had been quoted as saying imported LNG would cost about $9 a gigajoule which translates into 10c/kWh.

"Add those 2500GWh to the 3000 Genesis's new gas-fired plant at Huntly [due to come on line in 2007] will provide and the 'looming electricity crisis' there is so much speculation about doesn't seem quite so urgent," Turner said.

The main caveat was the need to upgrade the national grid to bring the power to market. "But we need to do that anyway. It is widely acknowledged there has been gross under-investment in the grid for years."

Electricity consumers, including Meridian's customers, had faced "hefty" price rises during the past two years for two reasons: prices had been unrealistically low, as the 2001 and 2003 crises demonstrated, and the cheap gas from the Maui field was due to run out soon.

"A presumption has been created in the wider public arena that electricity prices have to keep on rising rapidly. Well, our thermal colleagues may have to raise prices to pay for what they are doing, but we do not have to raise prices much beyond the [consumers price index]."

Meridian's new 90MW wind farm at Te Apiti, near Palmerston North, is expected to generate 360GWh a year, equivalent to half a year's growth in electricity demand. It is seeking consents to build a 70MW wind farm at Mossburn in Southland.

"We are reasonably confident we can meet the growth in demand at least in the immediate, urgent period but also after the Genesis plant is built. It will keep the country going for two or three years. That timeframe gives us time to develop some small hydro projects as well."

Turner said that as for reliability, wind was a good fit with the hydro power that still supplied most of this country's electricity. "You save the water on windy days and you use on the calm days."