Solar farm could cut Marsden Pt Oil Refinery's $30m power bill by 10%

A 31 hectare, $36-$39 million solar farm could be built besides the Marsden Pt Oil Refinery, above, to supply about 10 per cent of its power needs.

A 31 hectare, $36-$39 million solar farm could provide up to 10 per cent of Marsden Pt Oil Refinery's annual $30 million power bill - with scope to expand the project further.

Refining NZ, the owner and operator of the Marsden Point Oil Refinery is looking at constructing a 26 megawatt solar farm to be potentially developed adjacent to the refinery to supply it with renewable electricity.

The 31 hectare solar farm – which would be New Zealand's largest if built - would be situated on land belonging to Refining NZ and is estimated to cost around $36-$39 million. The farm would be funded via a combination of non-recourse project debt funding and equity of around $12-15 million from the company.

In comparison, Far North electricity company Top Energy operates a 25MW geothermal power station at Ngāwhā, just east of Kaikohe, and is building a second plant which is expected to produce 32MW. That new plant will cost $182 million and is due to start producing power in August 2020.

The refinery has been looking at the solar option for a number of years and the plan comes after the company initially looked at building an 84MW power station to run the Marsden Pt Oil Refinery in 2004. That plan - which would have burned wood waste, asphalt or other solid fuels - didn't progress.

But the solar farm plan would also help the Refinery work towards producing green hydrogen.

A solar farm could save Marsden Pt Oil Refinery about 10 per cent of its annual $30 million power bill.

Refining NZ chairman Simon Allen said progressing the solar farm was contingent on the Refining NZ Board being satisfied the project was economically viable.

Early work showed the solar farm would reduce the cost of the refinery's electricity consumption and have a positive impact on shareholder value.

Chief executive Mike Fuge said the potential to develop renewable electricity from solar would be a further step by the company in the transition towards a lower carbon future.

"This solar facility is one of a number of options being considered as part of the company's long term business strategy, the potential benefits of which are exciting.

"First and foremost, this facility would allow Refining NZ to reduce its electricity costs, which is one of the biggest costs for the company. It would leverage our existing refining and infrastructure business, taking advantage of a high quality solar resource in Northland, as New Zealand greens its transport sector and contribute to the Government's goal of transitioning to a low carbon economy,'' Fuge said.

"That transition to a greener future will be especially critical to the region and to the 600 Northlanders who come through the refinery gate every day."

He said, as part of the company's exploration into solar, Refining NZ would engage with local stakeholders before lodging a resource consent application for the solar farm.

Company spokesman Greg McNeill said the refinery's power bill was about $30 million a year and the solar farm, if approved, would provide about 10 per cent of its power needs.

McNeill said if approved, the scheme could then be expanded in stages in the future to eventually meet most of its power consumption.

''It's part of a much bigger plan, and, if this goes ahead, we will look at building a much bigger solar farm in the future,'' he said.

It will also cut the refinery's greenhouse emissions and give a huge source of renewable energy.

Refining NZ's massive $365 million Te Mahi Hou project - completed in December 2015 - cut the refinery's greenhouse gas emissions by 10 per cent and the solar farm would cut these emissions even further.

McNeill said the solar farm would help the refinery develop green hydrogen, which could be sold around the world.

Refining NZ is the largest producer of pure hydrogen in the country and is planning a facility capable of generating green hydrogen from the solar energy. This new energy source has the potential to power the refining process, fuel the logging trucks that arrive at Northport every two minutes and provide export to Japan or other markets.

In March the Government launched the H2 Taranaki Roadmap as a valuable step towards a national hydrogen strategy.

Launched by Prime Minister Jacinda Ardern and Energy and Resources Minister Megan Woods, the report outlines a future based on the potential of green Hydrogen in Taranaki for export, for use in industrial processes and to transition jobs beyond oil and gas.

"I commend the Government for progressing work on the opportunities hydrogen presents as New Zealand transitions to a low-carbon economy," Fuge said.

Refining NZ considers developing New Zealand's hydrogen infrastructure up and down the country will be critical to achieving the Government's goal of carbon neutrality by 2050.

"This Taranaki Roadmap is a valuable step towards a network of green hydrogen hubs across the country, including at Marsden Pt. Green hydrogen, produced with zero emissions and using a renewable energy source, has enormous potential for Northland and for greening New Zealand's overall transport fuel supply.

"Adding green hydrogen to the refining process would immediately improve the carbon footprint of the fuel products we make," Fuge said.

"Hydrogen can make a significant contribution to our aspirations for a low carbon economy but for that to be meaningful industry and government need to be willing and able to build a network of hubs in Taranaki, in Northland and elsewhere as soon as we can.''