Meridian Energy mulling wind farm possibility

  • 12/11/2015
Meridian Energy mulling wind farm possibility

By Paul McBeth

Meridian Energy chief executive Mark Binns says a new wind farm is one of the options on the table if the country's biggest electricity generator can't convince Genesis Energy to keep open two ageing gas and coal-fired electricity plants at the Huntly power station.

The Wellington-based company is urging Genesis to keep open two units at the Huntly plant to protect the country's electricity supply, but Binns told Parliament's commerce select committee he has other options available if Genesis persists with its planned closure.

"We are talking to a couple of parties about putting in gas peakers," Binns said. "In addition to that, we are also reviewing where we are with our next generation option, which would obviously be wind."

Last week, Binns told shareholders that the Huntly closure risked leaving New Zealand exposed to possible power shortages in the event of a drought sapping hydro storage.

Genesis decided to scale back due to tepid demand, rising availability of generation from geothermal stations, and the added capacity between the islands after the Cook Strait Cable upgrade.

Binns said the scaling back of generation did address some of the supply issues that could be caused if the Rio Tinto-controlled Tiwai Point smelter closed down.

The smelter's future continued to hang over the industry, given that it uses 12 percent of the country's generated electricity, "because nobody wants to build a new plant if Tiwai Point can go on 12 months notice."

The aluminium smelter has forced reductions in the price it pays for electricity in response to low global metal prices, and continues to operate on electricity contracts that could be abandoned as early as January 2018.

If the smelter does shut down, Meridian would probably compete more aggressively for retail customers, though the impact won't be as severe given the scaling back of electricity supply.

The company's shares slipped 0.2 percent to $2.19, and have gained 28 percent this year.