Our national grid struggles to deliver enough power where and when it’s most needed by households and industry – in cold snaps. In part II of Powerless Progress, Richard Woodd considers offshore wind turbines.
Of the six developers interested in exploiting the constant winds off the Taranaki coast for windfarming, four have either withdrawn or set conditions after the government put a proposed seabed mining venture thrice rejected by the courts back on the agenda, via its fast-track approvals regime.
Up to 200 giant turbines mooted for the South Taranaki Bight had the potential to generate 5 gigawatts of power a year – more than a third of the additional power capacity New Zealand needs by 2050. Marine windfarming’s big attraction compared with land-based versions is the constancy of wind – offshore turbines are expected to generate at capacity for 50-60% of the time, compared with 30% for land-based turbines.
But last October, Australian-owned Trans-Tasman Resources’ proposal to mine 66 sq km of seabed in the same area made the government’s shortlist for fast-track consent approval and last month cleared the first hurdle with the Environmental Protection Authority.
TTR obtained a mining permit for the area in 2012 but its plans were subsequently rejected on environmental grounds in the High Court, the Court of Appeal and the Supreme Court. It wants to hoover up volcanic ironsand from the seabed, extract about 5% of iron, vanadium and titanium-rich material to sell on the world market, and discharge the rest back to the seabed. Though the proposal remains fiercely opposed by local iwi and conservation groups, their rights to object and to appeal are severely restricted under the fast-track regime.
The first windfarm developer to withdraw, Spanish giant BlueFloat Energy, said seabed mining would significantly disrupt the seafloor, threatening turbines and electric cables. BlueFloat has also abandoned plans to develop windfarms off the Waikato coast.
After BlueFloat’s withdrawal, Resources Minister Shane Jones argued the two activities in the same area were not incompatible. “Seabed mining won’t detract from offshore wind. We want multiple sources of energy, offshore wind included.”
But incompatibility is not the only issue: other international players, Sumitomo Corporation (Japan) and Parkwind (Europe, in joint venture with Meridian Energy) now require commitments for an upgrade of Port Taranaki and were looking for the government to provide long-term revenue certainty through “contracts for difference”, guaranteeing long-term price stability for power generated.
A fourth player, OceanEx of Sydney, pulled out to focus on Australian projects. “We’re a small player. The timing and capital requirements for New Zealand were just too tight for us,” says chief executive Andy Evans.
Two contenders remain: Wind Quarry NZ (which is seeking an equity partner) and Taranaki Offshore Partnership (Top), a joint venture between Copenhagen Infrastructure Partners and the NZ Super Fund. The clear front-runner, Top has been building community support, monitoring marine life, opening a local office, sponsoring the Womad music festival and engaging with iwi – potential investors in projects. Project lead Giacomo Caleffi is not just an engineer, he’s been spotted jamming with jazz bands both in New Plymouth and Wellington.
Caleffi questions whether government policy is keeping pace “because the development of New Zealand’s electricity system is still based somewhat on hope. We see huge strategic value in this wind resource for the country. You don’t want to wait another 10 years and then realise you should have built it earlier.”
Top originally planned two 1GW windfarms of 60-70 turbines each, but seabed mining in the South Taranaki Bight may limit them to just one.
Caleffi says national grid operator Transpower has also signalled that just connecting 1GW and finding a buyer for the output will be challenging enough without additional costly grid upgrades and connection points, currently to be borne by the developers.
The joint venture is targeting a final investment decision by 2030. It is also closely examining another site, 25-40km off the coast between Raglan and the Manukau Harbour.
Jones has been critical of the long lead times needed to bring windfarms on stream and also expressed doubts they can be profitable.
Taranaki businessman Philip Brown, a TTR major shareholder, says choosing windfarm investments over seabed mining is “a reckless gamble. Offshore wind projects around the world are being canned, and for good reason – they simply add more costs on consumers.”
