South Island firm acquires Matawai hydro-electric station

POWERED UP: The Matawai hydro plant will now be run by Southern Generation, who are looking to bring diversification to their portfolio. Picture supplied.

A hydro-electric station at Matawai is one of three power plants bought by a South Island energy company for $15.5 million this week.

Southern Generation Limited Partnership (SGLP) consists of a partnership between Pioneer Energy, The Power Company and Electricity Invercargill.

“The opportunity to add these to the joint venture's existing asset portfolio fits SGLP's strategy of continued diversification and investment in renewable generation,” SGLP managing director and Pioneer Energy chief executive, Fraser Jonker said.

Southern Generation acquired the stations from The Lines Company who had expressed their desire to sell the assets since March this year, due to volatile returns and dry weather.

The three hydro plants were on-the-river stations and smaller in scale, compared to other plants in the country.

In dry weather, the cost to run the station resulted in uneven returns for the former owner.

“There will be no upgrades apart from optimising from our other assets while also ensuring that we comply with the environmental standards.

“At the end of the day we know that there is a demand for it, the locals require it and having other assets with these three stations will help us manage it.

“We have a management team at Whakatane who manage other stations and will be managing these ones as well with the contractors like local farmers,” Jonker said.

The three sites, two in the King Country at Te Anga and Mangapehi, and one near Matawai between Gisborne and Opotiki, combined, are capable of generating between 15-24 GWh annually.

“That's powering up about 5000 homes,” Jonker said.

Southern Generation will also continue to rely on locally-based and experienced people to support the maintenance and operations of these sites.