A 20-megawatt hydro scheme on the West Coast has been blocked by Environment Minister David Parker due to its impact on the pristine and outstanding nature of the Morgan Gorge.

The $100 million development, proposed by Greymouth-based Westpower, had the support of the Department of Conservation, which spent more than two years working with the company on its proposal.

In September 2016 the department recommended the granting of a 49-year concession, leases and easements for the development which would draw water from above the Morgan Gorge in the Waitaha River, through a 1.5-kilometre tunnel, into a power station and back into the river downstream.

But Parker, who inherited the issue in February 2018 after Conservation Minister Eugenie Sage declared a conflict of interest, rejected the plan. While he believed most of the impacts on plant and wildlife in the area could be managed, he considered the gorge itself and its wild nature to be an outstanding natural feature.


"I do not believe modifying the flow is appropriate, even if it were possible to move the location of the inlet structure to below the entrance of Morgan Gorge," he said in the 18-page decision.

"On my assessment, there are no adequate or reasonable methods for remedying, avoiding or mitigating the adverse effects of the activity on the natural character of the environment or the associated adverse effects on the intrinsic value of the area and on the appreciation and recreational enjoyment of the area by the public."

Westpower believed the run-of-river scheme could deliver about 120 GWh of power annually – enough to meet almost a quarter of the region's demand. The proposal, along with the 7.6 MW Amethyst hydro plant the company commissioned on DoC land at Hari Hari in 2013, was developed to improve security of supply in southern Westland, particularly in the event of a transmission failure into the region.

Backers included Te Runanga o Ngati Waewae and Te Runanga o Makaawhio. The West Coast Tai Poutini Conservation Board also had no objection to the scheme.

But the project was the subject of a concerted campaign by the kayaking community and other environmental groups, including Sage's Green Party. They argued there was no justification for additional power generation on the West Coast and that the Morgan Gorge warranted special protection from development, even though only expert kayakers can use it in its natural state.

Westpower chairman Mike Newcombe said the company is "utterly stunned" by the rejection.

"We put up a proposal that ticks all the boxes: renewable, sustainable energy, long-term regional economic development boost, careful environmental stewardship – and yet it was declined. It is an alarming decision not just for the coast but for regional New Zealand," he said in a statement.

"We will be carefully reviewing the detail of the decision," he said. "It makes no sense – not least because of the government's stated intention to be 100 per cent renewable in energy by 2035 - 15 years - and its commitment to climate change."


In return for the concession, Westpower would have paid DoC a market fee set at 6 per cent of gross revenue annually. The company had also undertaken to shut the intakes so that kayaking events could still be held in the gorge on a set number of days annually.

Last year, it attempted to mitigate some of the recreational impact of the proposal by offering $250,000 to the local Tai Poutini Polytechnic to be used in a trust promoting kayaking on the West Coast.

Parker said his decision is not inconsistent with the concession granted for the Amethyst project, which is also on DoC stewardship land.

The main difference in that case, he said, was that the Amethyst River cannot be used for kayaking and isn't routinely used for tramping.

Parker noted that he is barred under the Conservation Act from considering the economic benefits the region might have gained from increased security of power supply, or from the long-term returns from the asset to the community-owned network company.

But were it otherwise "my decision would not be different," he said.

He said many parts of the country are substantially reliant on transmission from one source and do not have sufficient local generation in the event of a transmission failure.

"This is not an unusual or extreme risk."