A tidal power station on the Kaipara Harbour seafloor could be providing power to a quarter of a million homes by the end of the decade.

The Environment Court has made a positive recommendation to Conservation Minister Tim Groser on a plan to generate electricity from the harbour's swift tidal flow.

The approval is subject to fine-tuning of consent conditions.

Crest Energy plans to spend $600 million on sinking 200 tidal power turbines to the seabed of the harbour entrance, creating New Zealand's first tide-driven power station.

The project will start with 20 turbines.

Last month, Todd Energy said it was taking a 30 per cent stake in Crest, which aims to be fully operational within nine years generating 200MW of power, enough to supply 250,000 homes.

But in an interim decision, the Environment Court says Crest Energy must do further work, mainly to satisfy concerns about the turbines interfering with the critically endangered Maui's dolphin and the important snapper fishery on the west coast of the North Island.

Judge Laurie Newhook said too many questions had not been answered.

Further evidence was needed so final draft conditions of consent could be tightened and certainty given to what the environmental monitoring plan would cover.

He said Crest had to consult other parties on the extra work.

When it came back, the court would offer an opportunity for the "earliest possible resolution of the case".

Crest Energy director Anthony Hopkins said last night that the court's indication of a positive recommendation was great news after more than four years of work.

In June, Crest appealed to the court after the Northland Regional Council gave approval for only half the 200 turbines proposed.

The Director-General of Conservation, Al Morrison, also appealed, wanting the company to undertake three years of baseline monitoring of the harbour marine life before the project began, rather than the 12 months specified in the application.

The monitoring enables a comparison of the environment before and after the turbines are installed to determine the effect they have.

Judge Newhook said monitoring was a key to getting consent, because it had not been adequately addressed.

The court had been told the Kaipara Harbour produced about 98 per cent of the west coast's juvenile snapper.

But it lacked reliable evidence to assess the response of mammals and fish to turbine noise and to the turbines as an obstacle to their passage through the harbour.

Conditions to measure these effects could be developed in the baseline study and in the environmental management plan.

Judge Newhook said experts generally agreed that although the number of Maui's dolphins entering the harbour appeared to be low, their presence could not be discounted.

Baseline monitoring, with the object of preventing any further danger to the survival of the species, should be for a two-year period.

But baseline monitoring for fish and fisheries might be needed for two or three years.

The court was uncertain about the desirability of the first stage of the project being 20 turbines, three units as covered by the $1.8 million Government marine energy deployment grant in 2008, or something in between.

It required more evidence on the numbers and alignment of turbines in each stage.

* Tidal energy

First stage will be 20 turbines, each producing 1MW.

Power cables from turbines will run across foreshore and seabed.

Turbines are 24m tall, but will be 7m below the surface.

$600 million over 10 years to have 200 turbines, producing 200MW.

OpenHydro turbines are used in the Orkney Islands, feeding into Britain's national grid.