Geothermal power struggle: Owners get chance to harness their land

The competition for access to geothermal resources is heating up in the Taupo-Rotorua region. In the final instalment of a three-article series, Damian Stone explores some of the important considerations associated with geothermal energy development.
The land under  the geothermal fields of the Taupo-Rotorua region is now being used to produce electricity and has the potential to produce much more.
Much of that land is Maori-owned and has been for centuries. This provides a golden opportunity for those landowners, many of which are Maori trusts.
Consenting and building a power station is a mammoth undertaking, involving numerous local trades and professions, from builders and electricians to geophysicists, accountants and lawyers.
 The trustees of those Maori land-holding trusts need to consider a range of matters to best realise the geothermal potential of their land.
Steamfield access and ownership
Consideration needs to be given to how the geothermal resource will be accessed. Will a royalty be paid for the use of steam? Will the land be leased? If so, how long will the lease term be for and on what terms?
Will part of the land be sold to finance some of the transaction? What level of shareholder approval will the trust need to enter into transactions concerning the  land? Will the Maori Land Court need to be involved?
Expertise and capital
Does the trust have the expertise to develop the geothermal resource?
If the trust does not have the capital to wholly fund the project, how will the project be funded? Has a joint venture been explored? Is the bank on side?
What level of shareholder approval will be needed to enter into any financial arrangements?
Environment
Resource consents will be needed across all stages of any geothermal project - from initial earthworks, to testing, to building the power station.

 It is important not to underestimate the amount of environmental approval needed and to have established relationships with local and regional authorities.
Resource management processes are getting faster and applicants are receiving consent within reasonably short time frames.
The recent Tauhara II project is an example of how the streamlined board of inquiry process is working, but consenting still takes time and effort.
With the recent government announcement of the possible partial sale of state-owned enterprises, the prospect of local ownership of nationally significant electricity generation facilities becomes real.

 The development of geothermal energy represents a significant opportunity for the Taupo-Rotorua region and it is easy to see why development in this area is progressing full steam ahead.
- Damian Stone is a partner at Kahui Legal, a law firm providing legal advice on geothermal and commercial issues to businesses, individuals and iwi in the Rotorua/Taupo region.