Small plants way of future

By RICHARD BRADDELL

WELLINGTON - New Zealand is likely to see many more small power stations rather than the large ones of the past, says the chief of Meridian Energy.

Dr Keith Turner said the 1980s goal of building ever larger power plants at efficiency gains of less than 1 per cent over their predecessors had been displaced by combined-cycle gas and co-generation technologies that had shifted the economies of scale down from the 1000 megawatt targets of the past to 50MW.

"Co-generation plants of 50MW scale, such as Te Rapa, are now economically and environmentally very efficient," he told Parliament's commerce select committee yesterday.

While the new small plants were able to match the giants of the past in efficiency terms, they were also more attractive to private capital, because they enabled investors to diversify the risk over a number of plants rather than a single large one that would produce much higher losses in the event of a failure.

The issue was raised after Dr Turner was questioned about a forecast that Maui gas supplies could run out in 2006.

His view was that they would hold out until 2010, but high levels of exploration at present indicated they could last beyond that.

Meridian relies on South Island lakes to generate 45 per cent of New Zealand's electricity, while its North Island "Baby ECNZ" rival, Mighty River, is also hydro-dependent, with all its stations on the Waikato River.

The third Baby ECNZ presenting yesterday, Genesis, relies mostly on thermal and steam generation, with the coal and gas-fired Huntly station being its largest asset.

Genesis chief executive Murray Jackson said Huntly had run at 20 per cent capacity under ECNZ, but by shifting it from a peak facility to a "base-load" producer that had doubled to 40 per cent and could ultimately reach 60 per cent.

However, Dr Turner was sceptical, suggesting that Huntly had always been a base-load producer, but because its electricity was relatively expensive, output would always be determined by cheaper hydro production.

New Zealand's small lake sizes and unpredictable rainfall gave Huntly a role filling gaps when lake levels affected hydro production.