Generator denies coal shortage

By KEVIN TAYLOR political reporter

Genesis Energy has hit back at criticism that it does not have enough fuel stockpiled to meet winter needs.

Prime Minister Helen Clark took a swipe at the state-owned power company yesterday for not giving "satisfactory answers" about the state of its coal stockpiles.

But the company, which runs the vital Huntly thermal power station that may have to supply a fifth of New Zealand's energy needs this winter, said it did have enough fuel.

Asked on radio yesterday morning why not enough coal was stockpiled for thermal generation, Helen Clark said the question should be directed at Genesis.

She said Energy Minister Pete Hodgson had been "pushing that with them for a number of months and it's a question that there hasn't yet been satisfactory answers to".

Asked to clarify her comments after the Cabinet meeting, she said: "What has been of concern has been that Genesis does not appear to have been ready to run at the rate required to ensure the country gets through a dry year." The Government was "well aware" of Genesis' situation.

A spokesman for Mr Hodgson said questions had been raised about Genesis' arrangements to ensure it had enough coal to run Huntly as hard as needed this year.

Capable of running on both gas and coal, the 1000-megawatt station has been running at only 60 to 70 per cent of capacity for much of this year. It started generating closer to maximum capacity only in the past week.

The power industry and the Government would have expected Genesis to run the station at a higher rate to offset low inflows into the hydro storage lakes.

But Genesis chief executive Murray Jackson said yesterday that Huntly had generated less than maximum this year because one of its units - responsible for a quarter of its output - had been on a 12-week overhaul.

"We have bought all locally available coal and gas, and are securing as much additional coal as can be transported to the station. Not only is Genesis covering its own electricity requirements, but it is currently covering for hydro generators to help ensure the lights stay on through the drought."

Mr Jackson said that after the exceptional demands on thermal generation in 2001, Genesis moved to secure more coal supplies and increased deliveries started last month.

Genesis planned for Huntly to operate at full available capacity through this year and the next two years, and local coal producers were working with the company to maximise production.

In addition,500,000 tonnes of coal would be imported, with the first shipload arriving in July and deliveries continuing throughout the rest of this year and next.

Meanwhile, Helen Clark said there would continue to be an electricity market but changes would be made to ensure security of supply.

"A mechanism will be found alongside that market to see that there can be standby generation brought into operation when a number of factors combine to otherwise produce a shortage."

Proposed changes were well advanced but she would not reveal details yet.