Meridian, NZ Windfarms teaming to power up $500m Tararua project

The repowering of Te Rere Hau wind farm will involve taking down the existing turbines and replacing them with new ones. Photo / File

Meridian Energy and NZX-listed NZ Windfarms have agreed to form a 50-50 joint venture to “repower” and extend the Te Rere Hau wind farm, near Palmerston North.

Repowering, at a capital cost of $500 million to $600m, will involve taking down the existing turbines and replacing them with new ones.

“We’ll increase the capacity by more than three times with a lot less turbines,” a spokesman for the company said.

The project involves the design, construction and operation of up to 39 new turbines with a generation capacity of up to 170 megawatts (MW).

This will be New Zealand’s first wind farm repowering project and has the potential to generate seven times the annual renewable energy production of the existing fleet, Meridian said.

The Te Rere Hau wind farm is in the Tararua Ranges, which offers some of the best wind resource in New Zealand.

Originally constructed in 2006 with five turbines, it currently has 91 small turbines with a total installed capacity of 45.5 MW.

In May last year, NZ Windfarms obtained a two-year fast-track consent for the first phase of the project, consisting of about 30 new larger turbines.

A second phase of fast-tracked consent for the extension of the project - the Aokautere Extension - is being sought, involving a further nine turbines.

Meridian chief financial officer Mike Roan said the electricity system needs to move with pace if New Zealand is to continue to grow the potential of electrification to decarbonise its economy and move closer to net zero carbon emissions.

The company, 51 per cent owned by the Government, also has a long-standing presence in the region, having owned and operated the Te Āpiti wind farm (10km from Palmerston North) since 2004.

NZ Windfarms Chair Craig Stobo said that if built now, the repowered wind farm would be New Zealand’s second largest after the neighbouring Turitea farm.

The parties estimate the capital cost of the repowering to be about $500m to $600m, with the project expected to be completed in the fourth quarter of 2027.

As part of commercial terms, NZ Windfarms will make a placement of 43.2 million shares to Meridian, amounting to 15 per cent of its existing equity capital, totalling $6.7m, at 15.5c per share.

Meridian will then have a 13.04 per cent shareholding in NZ Windfarms.

NZ Windfarms will also undertake a pro-rata renounceable one for 8.5 rights issue of 39.0 million shares to existing NZ Windfarms shareholders at 15.5 per share, raising up to $6.0m.

The offer will be underwritten by Meridian up to about 28.8 million shares.

Shares in Meridian last traded at $4.874. NZ Wind Farms was quoted at 15.6c, up 3.9c or 33 per cent from its previous close.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.