NZ Green Party
Stupid is as stupid does

G is for grrrrrrr.

G is grump grump.

G is for Godawful.

G is for Genesis

In the beginning there was stupidity and then – Good Lord – there was more stupidity.

The latest chapter in this sorry saga called the Book of Genesis is the resource consent for the Rodney gas plant granted by Rodney District Council last week. 

This means we are now a step closer to a gas-powered plant for which we don’t have gas.

If we have to import gas we are at the mercy of overseas supply and pricing and the exchange rate.  For a moment, let’s do what the traditional economists do and consider the environmental costs an ‘externality’ and, even in this narrow world view, Rodney makes NO sense. Zero. Zip. Nada.  Even Genesis admits this, but on we go…

Genesis wrote to the Electricity Commission on 4 December 2008 that it does not have “access to a sufficient, secure forward quantity of gas” for the proposed power station, and it has admitted the power station is not viable in a “in a real-world, commercial sense”.

The story gets better: we’ve spent more than $70 million planning for the Rodney plant. We could have fixed a bunch of transmission problems for this sort of money, but hey, let’s keep chasing ‘Think Big,’ 1980s-style projects.

Speaking of dated, a friendly frog has pointed out that some of Genesis’ latest advertising features the slogan “Hello Tomorrow” above the photo of a hydro dam…built in 1973.  (On the count of three, everybody slap their foreheads and say ‘doh!’).  Here’s more copy from Genesis

Hydro power. Take some water, add gravity, plus a little technology and you can generate enough power for an entire city, without producing even the tiniest amount of CO2 emissions. To find out what else we’re doing about climate change (and what you can do), visit genesisenergy.co.nz. Together, we can make a big difference to tomorrow.

So we talk about climate change while throwing millions at a gas-powered plant.

Similarly here’s a Genesis press release headline(sic) from last week

Genesis Energy has completed the first step of a process which could lead to the development of a wind farm in northern Wairarapa.

So we talk about wind, while spending mega-bucks on gas.

Remember too that the National-led Government gave a big thumbs up to baseload thermal generation as soon as it took office.

‘Think Big’ came to be ridiculed as ‘Think Pig’ and happy talk about hydro and wind is the metaphorical lipstick on the Rodney pig.  Grrrr.

85 thoughts on “Stupid is as stupid does

  1. Perhaps building hydro has become too troublesome in this country. Protests, RMA, NIMBYs, etc , etc….

    Be careful what you wish for, eh Frog.

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  2. The story gets better: we’ve spent more than $70 million planning for the Rodney plant.

    I know that it’s an SOE, but even so isn’t it the case that ‘we’ don’t pay that money, the business does? The only transfer is those lovely dividends back to the taxpayer?!

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  3. Well, it certainly does seem to support the notion that we are in the ‘Age of Stupid’ . But then, that is probably just to the uninitiated, like myself.

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  4. A bigger party might have made a difference but your policy’s dumped members.

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  5. >>Age of Stupid’

    The problem with the argument above is that it says we don’t have gas. But Todd energy says we do have enough gas for the plant for decades to come.

    So, who to believe…

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  6. I was about to say what Blue said. Also TOdds are planning their own 200MW power station in Taranaki.

    Note Genesis just says it doesn;t have the contracts. It doesn’t say it can’t get them – big difference.

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  7. It could be worse – the Government could underwrite the price of gas like the previous Government did to Huntley…

    If the NZ electricity market even gets close to working, the time will come when gas plant will be so expensive to run that lower cost generation methods will be employed. Which probably means coal, but one can live in hope…

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  8. Stupid is changing the spelling of Wanganui when over 80% of the people in that city do not want the name changed.

    This may well have kicked off a race row that could potentially get right out of hand.

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  9. In breaking news:

    Cows break wind a lot, and their flatulence fills the air with methane, a potent greenhouse gas. However, 2 percent fish oil in the diet of cattle reduces flatulence, apparently due to the omega 3 fatty acids in the oil. The technique cut methane output of three cows by 21 percent. Fish oil could cut down on the boom-booms…..

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  10. No, BP. Todd does not say we have enough gas for the Rodney plant for decades to come. They were talking about their own finds and their own plant. At the moment, all parties freely admit that we have a gas supply cliff coming in 2015 that will mean a deficit against current usage, e.g. before Rodney is ever built.

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  11. Frog – if think big, or think pig as you call it, is so bad, do you include hydro dams like Clyde?

    Do you have a link to where “all parties freely admit that we have a gas supply cliff coming in 2015″

    Todd are currently exploring quite a number of new fields, as are NZOG, and no one has even started on the giant fields off Otago, Canterbury and Southland.

    I would have thought that nobody would know, the exploration companies included, what supplies will be available in 2015?

    They don’t yet have the results of exploration for the next few years, so how could they know.

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  12. If that’s the case, then it sounds pretty silly.

    ***IF****…..but the trouble is, I don’t find the greens particularly credible on these issues, given the only new power generation they seem to approve of is wind.

    Anyone have any independent data on gas reserves? Is there a copy of the Rodney business case somewhere?

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  13. I was talking to someone from Meridian at the Earth Hour event; we both agreed that Genesis were lying, manipulative scum who don’t have a clue how to generate energy, and generally just want to overcharge customers as a means to increasing profits to pay for their unsustainable programs.

    Having moved into a flat where the existing bill from Genesis, I’m on a campaign to shift our electricity supply to a friendlier SOE.
    Probably Meridian, but we have to conduct due diligence in the flat, because one of my flatmate’s 3 degrees is a BCA… and so it goes on. Thanks for providing ammunition, frog. :-)

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  14. BP:

    “Anyone have any independent data on gas reserves? Is there a copy of the Rodney business case somewhere?”

    Perhaps you could start with Rodney District Council’s website.
    Genesis won’t be saying much, ‘cos it’s “commercially sensitive”, so don’t bother looking there.
    Have you the capacity to fill out an OIA?
    Try sending one to the Energy Commissioner, or the State Services Commission, requesting information on why an SOE is doing such an irrational, risky project, given the known limits of supply.

    ‘Cos that’s pretty much the process used by policy analysis researchers.

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  15. Do you consider the Ministry of Economic Development “independent” or Fitch Ratings? Can provide links for both re. latest info on gas reserves.

    Vector have just notified the gas pipeline designation to service the Rodney plant and their documents state “NZ currently has confirmed gas reserves to service its requirements for another eight to ten years” “Importing gas remains a fall back option to protect gas supply in the event that domestic discoveries are not able to keep pace with demand”.

    Genesis told commissioners the Rodney plant will most likely be fuelled with gas from Kupe and Pohokura and we know the SOE has take or pay contracts from those fields for next nine years. Slight problem there though – Genesis need that gas to run e3p at Huntly. No problem says Genesis – there could be up to 1,000PJ of gas in the Cardiff field and Rodney could run on that. Well that’s what they told commissioners but that same week they released their annual report which stated Cardiff had “uneconomic reserves”.

    Genesis and NZOG lost an estimated $50 million when they abandoned the Momoho gas exploration well last year. But no worries – Gerry Brownlee gave Genesis the go-ahead a couple of months back to buy an even bigger stake in ‘bountiful’ Cardiff.

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  16. There are plans to import LNG in the medium term future I think. A few “EnergyNZ” magazines that I’ve read talk about that as something that’s likely to happen sooner rather than later.

    Another thing to add to the current account deficit. Great.

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  17. BluePeter – I don’t know about a ‘business case’ but I can give you a link to all the documents Genesis provided with their applications – altho’ they’re riddled with errors and half-truths. Anyone interested could contact ARC for copies of the hearing evidence, and I understand the decision on Rodney is now on RDC’s website.

    The commissioners who gave Genesis the go-ahead last week say it’s not their role to examine whether there’s any gas to run the power station, or if the project is economically viable. And Simon Power said last week the Govt “has no intention of interfering” in the operational decisions of the Genesis Board. Anybody know who SOEs are accountable to?

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  18. Jarbury, it’s been suggested that while Genesis are pursuing consents for Rodney they have no intention of building it, and that by simply showing they have a future market for gas (at Rodney) it will make it easier to get their proposed gas importing terminal in New Plymouth consented.

    The new facility, Gasbridge, is a joint venture between Genesis and Contact Energy who – surprise, surprise – can also say they have a future market for gas (Contact already have consents for a large baseload gas-fired power station at Otahuhu that’s never been built).

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  19. I heard Todd gas revised up their reserves recently. Why would they want to do this? Why would the Saudis want to do this for their oil?

    Must be something in the wind that suits an inflated estimate?

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  20. Katie wrote “I was talking to someone from Meridian at the Earth Hour event; we both agreed that Genesis were lying, manipulative scum ……”

    When Meridian was applying for the resource consent for Project Hayes wind farm, they told Dunedin residents that the power was for them, and that they would have blackouts if the wind farm didn’t go ahead. They managed to get several hundred of people to send in supporting submissions on this basis.

    It was all lies.

    Project Hayes wind farm will destroy an iconic landscape, 30% of it’s capacity will dissappear in transmission losses (paid for by consumers), it will require hundreds of millions in new ugly transmission lines, drapped across more iconic landscapes (again paid for by consumers – not Meridian) and it will require a new Cook Strait cable at half a billion dollars (and do Meridian have to pay for that – of course not – consumers do).

    On top of this, in good years Meridian will screw their competitors as wind farms take precidence over hydro, and Contact Energy will be forced to waste generation by spilling water from Roxburgh and Clyde, as Project Hayes will be given priority over the constrained transmission lines north.

    And despite destruction of a pristine environment, lying to the public, forcing renewable energy to be wasted, massive energy losses in transmission, and the requiurement of vast sums of money being charged to consumers for all this wastage, I haven’t heard a single whisper of protest from the Greens.

    Not even a mouse squeak against this envoronmental diasaster.

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  21. photonz1: do you have any information to back up these claims?

    Current transmission line losses are not normally 30%. Where did you get that figure from?

    Meridian has much of the South Island hydro generation. Why do you think it would be Contact Energy’s water that would have to be spilled – unless you are taking Contact Energy’s side? Water would only have to be spilled rarely, and that is usually during years with higher than normal rainfall, so Contact’s profits would be high in those years anyway.

    Either you expect to have new transmission lines built or transmission constraints – you can’t have it both ways.

    Trevor.

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  22. Trevor Wrote “photonz1: do you have any information to back up these claims?

    Current transmission line losses are not normally 30%. Where did you get that figure from?”

    Trustpower claims they lose up to 25% supplying Marlborough from Benmore. The Cook Stait Cable losses are normally in the 7-15% range.

    The power from Project Hayes has to travel a distance to Benmore (-?%), then up to the top to the SI (-25%), then across Cook Strait (-7-15%), and well up the North Island (-?%).

    There will need to be a new transmission line for Project Hayes to link in with the Clyde – Benmore lines. From here on there are already contraints for Contact from time to time.

    That is unless they do a completely new line all the way to Benmore (which would go right across the Manoitito and Hawkdun ranges, made famous by painters and photographers for their dramatic empty landscapes).

    That would cost consumers several hundred million dollars. (so either consumers, or Contact and consumers, will get shafted by Meridian).

    It’s insane building a giant wind farm and destroying a pristine area, at the place furtherest away from where the power is needed.

    What’s the Greens line on this?

    Is it “If it matches our public statements, then screw the environment?”

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  23. This whole nationalist “If we have to import gas we are at the mercy of overseas supply and pricing and the exchange rate.” nonsense is an economic charade. Who is this “we”? It is Genesis, not “we”. It imports gas “at the mercy” of overseas supply (that getting turned off soon?) and pricing (wow prices might change? domestically they wont right? I mean the socialist gas supply of the nation would always sell domestically cheaply over exporting at a profit) and the exchange rate (oh yes, don’t trade, you can’t be certain of the exchange rate).

    Grow up. New Zealand exports goods and services, it also imports them. When it makes financial sense to import a commodity, it should happen, I doubt a political party knows better than a board of an SOE.

    Oh and if you don’t want to be involved, maybe Genesis should be privatised. Not as if there aren’t two other state owned power companies after all, but I forgot Green policy is to have one big behemoth of a state owned monopoly making all these decisions right or wrong with the taxpayer ready to bail it out.

    So should Genesis NOT meet demand from its customers and instead push its prices up?

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  24. I think you may find that the 7-15% losses figure for the Cook Strait cable is from AC at Benmore to AC at Heywards.

    I also expect that they will be upgrading the transmission lines in the area (re-cabling) to handle higher currents although an extra transmission line is quite likely. As you say, Contact is already being constrained. I seem to recall Contact might have withdrawn their objection to this wind farm on the basis that transmission constraints would be overcome.

    Trevor.

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  25. Liberty, it’s not Genesis who will be at mercy, it will be the consumers. After all, they are the ones who will be paying for it in the end through higher prices. Even if they switch to a different power company, if you live in Auckland chances are that the power which turns on your light will be generated by Huntly’s coal or by the new power plant’s gas. That still leaves you at risk of higher prices in the long-term (otherwise everyone would be with Meridian due to cheaper prices).

    Furthermore, are you not concerned by our current account deficit? A huge chunk of that deficit is due to our importation of oil, so if we add gas to that we’re just going to make life way more difficult for ourselves. Even Bill English agrees that realises that the current account deficit is a huge issue – I heard him on the radio the other day saying “we need to save more and spend less” because of it. Great stimulatory advice there :D

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  26. Hey Bro: Historically we already have the name correct – now lets rename Whellington, Whaikanae, Whellsford, Whadestown and Whestport !

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  27. Yer, they did try and double the power bill from the last single resident, to this one…..cool hey? Lucky I checked “Whoopsie! the Gal says…

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  28. Jarbury: Don’t use Genesis, use someone else.

    No I am not concerned about the current account deficit, neither should you. It is not “ours”. The only deficit that matters is your own. Do you have enough money to buy the goods and services you purchase? If so, then relax. If not, then cut your spending or increase your earnings. All that matters is you are still earning money. The only way this is distorted is when government borrows or spend on your behalf, because you can’t control the liabilities it signs you up for.

    The Green party obsession with the current account deficit is peculiar. It really doesn’t matter unless the economy is dominated by the state buying and selling. Note that many receipts (e.g. overseas tourism) are not reflected in current account figures, as foreign tourists consume food, accommodation and transport domestically.

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  29. photonz1: The power that is transmitted north by the Cook Strait cable is consumed at the south end of the North Island. It displaces power that would otherwise need to be transmitted south from the main generation areas further north. Therefore the transmission losses are not as high as you suggest, and at times I expect that the North Island transmission losses are reduced by power transmitted over the link.

    The transmission to Marlborough is not as efficient, partly because it is a long AC link and handles lower power levels, so there is less incentive to upgrade the cables. These losses are highest when demand is highest. Your arguement is about wind generation, and the power that would need to be transmitted north because of that wind generation is distributed throughout the day, not just at peak times, thus causing much lower losses. Remember that it is all about keeping the lake levels midrange, so when the wind blows, less hydro is used, allowing the North Island thermal stations to be backed off a bit throughout the next weeks to use that saved hydro power.

    Trevor.

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  30. If energy is a constraint, why promote population increase (other than for short term gain and economies of scale)?

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  31. Actually Frog your treatment of potential gas supplies looks a little disingenuous?

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  32. Trevor – you are getting close to the real issue. That power needs to be generated close to where it is needed.

    More than this, many people including the heads of power companies have said that as a country, we MUST STOP stop building generation plants far from where the power is needed – the country cannot afford it.

    Hence Project Hayes is about as far away from where the power is needed as it’s possible to get, and still stay in NZ.

    What is the sense of sending SI power to the NI is summer and draining the lakes to low levels. Then in winter sending NI power south?

    It makes no sense at all. In fact it’s insane, and costs consumers hundreds of millions of dollars extra in electricity.

    However the generation companies get paid at source, so they make hundreds of millions of dollars by charging consumers for the losses.

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  33. We used latest MED data on domestic gas reserves and calculated that NZ could only run its EXISTING gas-fired power plants for another 12 years (we included Kupe which will begin production later this year).

    We think the gas shortfall could come even sooner given that Contact’s going to bring a new gas-fired peaking plant into operation next year, Todd Energy has just announced plans to build a new baseload gas-fired plant in New Plymouth, and Methanex hope to get both their gas to methanol plants operating.

    And a bit of speculation on my part to throw into the mix. Genesis’s resource consents for the Huntly coal-fired units expire in 2013. If they have trouble getting new air discharge consents for their high-GHG-emitting coal units, will they consider switching them to gas instead? Admittedly the existing units don’t run efficiently on gas but it can be done – in 2007 when e3p wasn’t quite ready to begin operation, Genesis had no option but to take the gas for e3p and burn it in the coal units.

    Whatever happens, we know that there’s a keen market for NZ’s gas reserves. Genesis won’t have first dibs on any new gas finds and I understand they only have gas contracts to keep e3p running for another eight years. Will the Govt allow Genesis to blow half a billion dollars building a new baseload plant at Kaukapakapa, in the HOPE that (a) there’ll be a large gas find one day, and (b) no-one else will want to buy the gas?

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  34. Very interesting post Kaukapakapa. It certainly seems like Genesis are banking on importing LNG in the medium and long term future. This isn’t really particularly smart, as international gas prices are likely to increase significantly over the next decade or two – as oil prices increase people will switch to gas for heating etc., driving up gas prices too.

    Being dependent on importing gas is not particularly smart… just ask a Ukrainian.

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  35. Liberty

    You are right in theory about shifting but the price of electricity is set by the marginal generator and every generator gets paid the same. So if demand can only be met by burning imported gas then that will be the benchmark price for all consumers.

    A gen-tailer with say hydro assets won’t want to overexpose themselves by underpricing the market and attracting ‘excess’ customers in case they get caught short and overexposed to the true market cost. That may a good reason to encourage separation of retail and generation as it may encourage innovation and more price based competition.

    Of course if LNG really is that expensive then there should be cheaper alternatives that would be built first. If there are not, then it is simply the price of keeping the lights on, or we look at cheaper demand restraint incentives, like running trains on diesel :-).

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  36. Photonz1 – thanks for that link. Hadn’t come across that document before. Do you know if InvestmentNZ have published another one since 2006?

    I particularly like the introduction where they say that it appears NZ’s increasing demand for electricity will be met [solely by] by e3p and more wind farm developments!

    Yes – NZ has hydrocarbon basins. But I think you’ll find the focus is on getting oil out of them, not gas. When our group met with John Key last year he reassured us that “there’s plenty of gas in Tui”. Sure is, but at the moment they’re only taking oil out of Tui and are flaring all the gas.

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  37. photonz1 argues that when Meridian was applying for the resource consent for Project Hayes wind farm, they lied to Dunedin residents about blackouts if the project wasn’t built. He then quotes Trustpower’s claims that they lose up to 25% supplying Marlborough from Benmore. Curious choice of supply destination. Perchances was this info released when Trustpower was seeking a resource consent for their controversial Wairau Valley Hydro Scheme?

    “What is the sense of sending SI power to the NI is summer and draining the lakes to low levels. Then in winter sending NI power south?”
    Because in summer inflows into the Waitaki scheme exceed the storage capacity so it’s a simple case of use it or lose it. That happened last month, despite the huge increase in demand for electricity for irrigation pumps.

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  38. Frog wrote:

    >>Genesis wrote to the Electricity Commission on 4 December 2008 that it does not have “access to a sufficient, secure forward quantity of gas” for the proposed power station, and it has admitted the power station is not viable in a “in a real-world, commercial sense”.

    how can you object to that? It’s the way of the free market:

    (1) Genesis builds a power station that’s not economic in a ‘real-world, commercial sense”

    (2) Genesis goes bankrupt

    (3) Government bails Genesis out

    (4) Genesis directors pay themselves huge performance bonuses

    what’s wrong with that?

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  39. photonz1 objects to large power generators far from where it is needed. This overlooks several key points:

    - renewable resources are where you find them. That is why you don’t find any large hydro-electric power stations in Auckland where there is a big need for power.

    - many of the renewable resources generate only some of the time, including wind, wave, tidal and solar. If we are to harness these sources effectively, then we need diversification to take advantage of the different times that these sources can generate. This means wind farms across the country and not clustered in one area.

    - demand varies through the day. The output of coal fired power stations and the more efficient gas fired stations aren’t suitable for rapid variations and are best run at relatively constant output. This mismatch can be addressed by hydro generation but the North Island lacks suitable hydro generation (with enough local storage). South Island hydro can fill this gap, along with gas peaking plants such as the 200MW Contact Energy plant under construction.

    - Hayes is viable because it has a very good wind resource – sufficiently good to make up for a few extra percent transmission loss.

    - the aluminium smelter uses about 540MW when run at full capacity. It is located at the south end of the South Island.

    Trevor.

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  40. Why are we persisting with this nonsense?
    The simple answer to your question frog is this.
    The headless chickens are running the show!

    At least there is some hope – but not in NZ – that the people on earth might mitigate AGW before our planet takes charge and does for the lot of us.

    Reading some of the proceedings from the current talks at the UNFCCC there is this unequivocal commitment from the US Envoy Todd Stern.

    “You will not hear anyone on my team cast doubt upon or downplay the threat of global climate change. The science is clear, and the threat is real. The facts on the ground are outstripping the worst case scenarios. The costs of inaction-or inadequate actions-are unacceptable.

    But along with this challenge comes a great opportunity. By transforming to a low-carbon economy, we can stimulate global economic growth and put ourselves on a path of sustainable development for the 21st century. I would go so far as to say that those who hang back and cling to a high-carbon path will be economic losers in the end because with the scientific facts of global warming getting worse and worse, high-carbon products and production methods will not be viable for long.”
    emphasis added.

    If the USA – the greatest users per head of population of carbon – can see the growing threat and make the change – why are we still persisting with this ridiculous gas powered plant? Do we want to prove them wrong?

    BB and BP et al there is no need for you to reply – you provide little more than the burping of dinosaurs.

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  41. Trevor29
    One thing we could do in Auckland to reduce our dependence on Electricity is to mandate the installation of Solar water heating – as Israel has done since 1974. I watch subdivision after subdivision being build in NZ and NOT ONE solar panel being installed despite the govt subsidy. If the market won’t work then maybe you have to tell people that this is the way it is to be! Israel saw that they were going to be short of energy years ago, and did something about it. The newer solar water heating systems are not only efficient but are long lasting as well.

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  42. Trevor – you seem to be totally avoiding the fact that Project Hayes destroys a very special envronment.

    With the unpreduicatbility of wind, Project Hayes will put surges of up to 400MW into the national grid, which currently starts to become unstable with 100MW surges.

    Wind is unpredictable, and the Project Hayes site is one of the calmest in NZ over winter. Thats why they get hoar frosts for days or even weeks at a time.

    At least with tidal there will be four surges each day, and four unproductive periods, and these times will be known years ahead.

    When it is windless, New Zealand needs to have 100% of it’s generation needs provided by sources that are not wind. So wind will only ever have a limited role in our supply – a sort of top up supply, that helps keep our dams filled. But wil will always need the ability to supply 100% without wind.

    It’s certainly not the “be all and end all” that some people have made it out to be.

    And what’s has tiwai point got to do with wind farms? Manapouri specifically feeds tiwai.

    I await to hear your comments on the destruction of a pristine wilderness, when there are so many other sites across NZ that we are calling ourselves the”Saudi Arabia of wind”.

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  43. Kevyn says “Because in summer inflows into the Waitaki scheme exceed the storage capacity so it’s a simple case of use it or lose it. ..”

    Maybe this year, but spilling is pretty unusual – in fact it’s rare. I’ve got photos from most of the several past summers of a very very low Lake Tekapo, and Lake Pukaki with it’s water level two to three storeys lower than where it normally is.

    They were getting drained even further to send power noth, only to….surprise surprise…. not have enough storage for the South Island at the end of summer.

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  44. BB and BP et al there is no need for you to reply – you provide little more than the burping of dinosaurs.

    Meh.

    You still haven’t proved your science. So you’re still making a faith-based bet. You won’t admit it, because your ego is too big, and your religion is tied up with your identity.

    All I’m asking is for your to prove it.

    And you can’t.

    So you’re no better than a God botherer.

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  45. Macro, you religious fool:

    “NOT ONE solar panel being installed despite the govt subsidy.”

    Why do you think there is a subsidy? If the numbers worked, there would be no need for a subsidy.

    The numbers don’t work.

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  46. photonz1 – you make some good points.

    Yes wind does generate surges. One way of dealing with this is spacial diversity – not putting all the wind turbines together. Putting some in each island helps, as the islands have separate frequency control. The South Island has more and bigger stations suitable for frequency control, such as Benmore, so you have two good reasons for building some of the wind farms in the South Island.

    Yes, we need to meet 100% of our peak demand without relying on wind generation and still having some backup. What better way than by keeping water behind our dams for such occassions?

    “Project Hayes is about as far away from where the power is needed as it’s possible to get, and still stay in NZ” – except for the aluminium smelter. Conserving some of the water in Manapouri would allow us to use that water when the wind isn’t blowing.

    How “special” is the landscape where Project Hayes is to be located? Very special to certain locals, but there are many other pristine ranges, just possibly not as accessible. Wind farms alter the landscape. The mountains, hills, plains and lakes aren’t removed. The land underneath can still be farmed. Some would argue that the wind farms add to the landscape, rather than destroying it. Beauty is in the eye of the beholder.

    As a feat of engineering some thermal power stations are impressive, but few would call them beautiful.

    And you have just admitted that it would be rare for Contact Energy to be forced to spill water from Clyde or Roxburgh.

    Trevor.

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  47. Trevor says “How “special” is the landscape where Project Hayes is to be located? ”

    Very special – it’s unique in NZ. My work is travelling New Zealand (and Australia) to to find stunning landscapes to photograph. Nowhere else in NZ is there a similar landscape to the Lammerlaws.

    Yes, there are steep rock covered ranges in the region, which are quite different But nowhere else in NZ have I come vast open rolling tussocklands.

    The arguement that windfarms add to the landscape may work for the farmlands of the Tararuas, but it is rediculous – completely rediculous – for iconic landscapes like the Lammermoors, or Mt Cook, or Mt Ruapehu.

    Some other points.

    The aluminium smelter doesn’t need more power. It gets all it needs from Manapouri.

    How do you store water in Manapouri when there is no dam?

    As you agree, when there is no wind we have to be able to supply 100% of our generation without wind. As that is the case, if we need an extra 100MW of generation and build a wind farm, we will also have to duplicate this capacity in some other form of generation – very inefficient.

    I didn’t say anything about the Contacts Clutha dams, I was talking about Meridians Waitaki system. So if the wind farms were in the NI in the first place, power would not need to be sent north, then sent back again because the dams have been drained. (with all the transmission losses that consummers are rorted for in both dirrections).

    You should try spending some time in the area that is to be destroyed. Few people who go there fail to become become very attached and emotional about the place. It is remote and untouched – a very special and unique place in NZ.

    You are promoting senseless destruction of a pristine wilderness when there are suitable wind farm sites on farmland all over the country.

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  48. I think I’ve seen that before. It’s Pascals Wager.

    The problem with Pascals Wager is that the AGW scenario might be false, in which case you risk spending a lot of money on nothing. The opportunity cost of that money is significant.

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  49. I encourage you to watch this version – your specific objection concerning the monetary opportunity cost is addressed. Look forward to your response.

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  50. photonz1 – the electricity market ensures that the lake levels are related. If one power company’s lakes are getting low and another power company’s lakes are nearly full, the former will lift their prices and the latter will lower them so more generation comes from the lakes that are high. This ensures that the first power company is less likely to be forced to use more expensive generation, while the second power company gets paid for their water rather than watching it spill.

    You also misunderstand why power companies invest in wind generation. It is not because wind generation is cheapest per Megawatt. Rather it is because they calculate that it is cheapest per Megawatt-Hour. Wind energy is all about energy, not power. It allows the companies to save their hydro storage or coal and gas. Contact Energy are building a gas peaker plant because it is the cheapest source of despatchable power, but its running costs are much higher than most alternatives. The just don’t expect it to run for very long at a time.

    Putting the wind farms in the North Island does not avoid power transfers between the islands, and may actually increase transmission losses. South Island hydro is used to help meet North Island peak demand because it is cheaper than running peaker plants such as Whirinakai. The most efficient gas plants and Huntley are not peaker plants. They have slow ramp up and ramp down rates and are best used for long periods at nearly constant output, and it is their output that is sent south at times of low North Island demand. Installing wind farms in the north may reduce the amount of power that needs to be sent north at peak times (if the wind is blowing) but increases the amount that needs to be sent south at low demand times and may result in more total power transfer than installing an equivalent amount of South Island wind farm.

    Trevor.

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  51. Forrest,

    I can’t be bothered watching that – he spends too long trying to be “funny”.
    Can you summarise his point?

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  52. @BluePeter His point: Managing the risk of abrupt global climate destabilisation requires major policy changes and is worth spending the cash on due to the potential magnitude of the hazards involved.

    For anyone else who can cope with his sense of humour, the guy has a whole series of videos exploring the science, objections and other issues around global climate change here: http://www.youtube.com/user/wonderingmind42

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  53. This is a comment from interest.co.nz blog. He is essentially talking about lack of supply due to restrictive planning causing the housing bubble (and?) financial crisis:

    “PhilBest Says:
    March 31st, 2009 at 1:17 pm
    I honestly believe that our economies in the Western world will not recover this time unless we completely rehash our whole approach to the utilisation of resources.
    ALL real wealth has been created through the utilisation of resources. Think about this. Any wealth that we are redistributing or spending on non-productive items, was created only through resources being utilised somewhere further back along the chain of economic activity.
    The efficient utilisation of resources is one part of this question. Free markets must be allowed to operate. The other part of this question is utilising the resources at all in the first place.
    We need to wind our political clocks back to the era of our grandparents when the utilisation of resources was regarded as a positive good in its own right, not something to be balanced against quality of life issues that carried economic costs that we could not afford in those days. We are now back to those days: we have been living beyond our means for at least a decade and payback of debt will require facing economic reality. We THOUGHT that that debt was secured against asset values. Actually, it hardly matters whether it is or is not, when those assets are not productive and we are eroding away our ratio of productive to non productive assets.

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  54. His point: Managing the risk of abrupt global climate destabilisation requires major policy changes and is worth spending the cash on due to the potential magnitude of the hazards involved.

    That’s still Pascals Wager.

    You’ve yet to show that your proposed course of action will solve your unproven problem.

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  55. BP,

    You’ve yet to show that your proposed course of action will solve your unproven problem.

    Lol, I dont even care if the problem is going to happen; I see it as a solution to the tragity of the commons, a solution very similar to that prescribed by free-marketers.
    The atmosphere is presently a commons.
    The commons is exploited.
    This commons is a natural monopoly.
    The government does not have the ability to correctly price the usage fo such commons, nor does a monopoly tend to.
    So in this case the answer cannot be government ownership of the commons or monopoly ownership and since multiple private ownerships of a natural monopoly only introduces masive inefficency that option too is undesirable.
    Instead the government acts as a intermediatary; those whom utilise commons resources are bound to repay those that negate their effects. Furthermore, in a correctly opperating carbon credit market this works almost exactly like a free-market model; because of this, seeking efficency. The only thing is that the government must also ensure that contracts are honoured; that is that people selling carbon credits actually produce and deliver. So certain regulation becomes nesacary.
    a carbon credit market is the most efficent option and the closist to the free-market ideal.

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  56. “The Green party obsession with the current account deficit is peculiar. It really doesn’t matter unless the economy is dominated by the state buying and selling. Note that many receipts (e.g. overseas tourism) are not reflected in current account figures, as foreign tourists consume food, accommodation and transport domestically.”

    I have to disagree with this statement m8.

    The problem with a current account deficit is that the country has to borrow to make up the difference. There is an argument that says we should just print money and buy foreign currency with it, but that’s a ridiculous thought, who buys Sri Lankan rupees or Egyptian Pounds – for instance.

    As we borrow foreign money to pay our deficit, we incur a time liability to pay interest, and repay capital, in the currency we borrow in. At the point at which we are unable to borrow any more on the foreign debt markets we become insolvent (technically a country can’t become bankrupt as it can increase taxes to match liabilities, insolvency is a different kettle of fish that involves not having liquid assets (money) to pay bills, despite having greater assets than liabilities.

    When we become insolvent, we are in a position where someone has to ‘bail us out’ – an action that has a very significant cost. The most likely ‘bail-out’ offer would come from Australia, and the cost would be our independence (sovereignty) as a nation and we would be absorbed as a new, or part of an existing (Tasmania) state. (Linking us to Tasmania would make sense as they have too big an overhead for their size and together we might make a viable political unit in the United States of Australia.)

    SO

    PLEASE, start worrying about the current account deficit, in the same way you would worry about having a million dollar house, no mortgage, no income and no buyers! You might be “rich” but you would also starve to death!

    Sapient
    I would like my right to personal use of the commons above and under your house to be recognised please!

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  57. Strings,
    Sure, all you have to do is muster more force than the government is willing to :P

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  58. Trevor – or should that be Max B – nice essay on how the energy market works, but if it works so well why has it failed on one of the main reasons for it being set up in the first place – competitive electricity prices.

    However your arguemnt is illogial. There are generation shortages in the North Island. The South Island would have enough power, but our lakes are drained to feed the NI.

    So putting the extra capacity is in the NI would fix both problems.

    Adding extra capacity in the SI,

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  59. continued…

    Adding extra capacity in the SI, with the prime aim of sending it north, only causes more problems i.e. new Cook Strait cable needed (half billion dollars) new transmission lines needed, greater transmission losses, meaning higher power bills, vast surges destabilising the grid, etc.

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  60. True.
    Now try and get a permit to build a generating plant in Auckland CBD where it is most needed!!

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  61. Trevor

    “the electricity market ensures that the lake levels are related. If one power company’s lakes are getting low and another power company’s lakes are nearly full, the former will lift their prices and the latter will lower them so more generation comes from the lakes that are high.”

    This is true in theory but strangely did not happen last year. Contact and Meridian burnt through water by keeping their prices low, despite low levels on a historic basis, and at a time when demand was low so they could have held back.

    “Contact Energy are building a gas peaker plant because it is the cheapest source of despatchable power”

    Again that’s the theory. Or it may be the most buildable or most profitable. Not always the same as cheapest.

    “South Island hydro is used to help meet North Island peak demand because it is cheaper than running peaker plants such as Whirinakai.

    SI hydro also meets NI baseload.”

    “The most efficient gas plants and Huntley are not peaker plants.”

    Wasn’t hunlty originally built to provide swing or peaking generation?

    “Installing wind farms in the north may reduce the amount of power that needs to be sent north at peak times (if the wind is blowing) but increases the amount that needs to be sent south at low demand times and may result in more total power transfer than installing an equivalent amount of South Island wind farm.”

    Are you sure? Surely if it is deferring the use of SI hydro to supply NI demand, it is conserving water which can then meet SI base and peak demand? Why would it increase south transfers? NI windfarms could reduce significant transmission losses which run at about 10% from the SI. To me the greater potential is that you could increase hydro spill because must run wind displaces it while thermal baseload can’t ramp back to allow excess water to be used.

    It may also increase the amount of peaking generation you need and potentially also co2 emissions as you will need more fast spinning reserve to cope with wind variability. Hydro could provide it but what if we have a dry year? Gas is probably more reliable in that sense. That said increased wind diversity may reduce the issue of wind variation.

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  62. insider – I am not sure, so I used “may”. I don’t have the necessary information. The point is that North Island wind does not necessarily generate its power when the demand for that power is there. Any such surplus power adds to other power sent south to meet South Island demand thus conserving South Island hydro. That power is then sent north when North Island demand is higher.

    The South Island has a lot of hydro, so that hydro can provide spinning reserve – in some cases without using any water. I am not suggesting that all new wind generation should be in the South Island, just that it makes sense to put some of it down here. Spacial diversity is just one reason.

    Trevor.

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  63. Meridian and Contact continued to use hydro instead of gas, but not necessarily for the same reasons. Meridian has no thermal generation, so I’m guessing that they would have had to buy extra power to conserve their water. Contact chose to use their water rather than burn more expensive gas. Both hoped that the rains would come. It was not the case that their lakes were run down while other lakes were being spilled, which was my point.

    My understanding is that Huntley was build to provide baseload power during winter or when the lakes were low, and can’t be ramped up or down quickly.

    Trevor.

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  64. Hi Trevor and Frog.
    Stupid is, not checking the facts before speaking.
    Evidence to the Te Akua wind farm inquiry gives the latest data on the relative merits for gas and wind generation in the real world of NZ weather and electric market.
    It is very clear that wind generation has been almost useless over the last year.
    Gas generation would have payed back the carbon of its fuel and construction in two months!
    NZ needs more non-coal RELIABLE base generation to increase hydroelectric power utilization.
    I haven’t seen anything from a non wind-industry expert that says any different.
    The really interesting question is: What’s going to happen to these huge capital intensive dinosaurs when cheap distributed solar power arrives in a few years?

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  65. Emerald

    when you say “when cheap distributed solar power arrives in a few years” does this mean there has been a breakthrough in the conversion of sunlight into microwaves and visca-versa, and a means for transmission of microwaves from stable earth orbit to small ground stations has been developed?

    If so whoopeeeeeeeeeee doooo! Fantastic, cheap and plentiful electricity for all. If not – then dream on, as until those two things happen, and the investment in their deployment takes place (about 20 years after development of a working demonstration model probably,) there will be no cheap distributed solar power in this country. The NIMBYs won’t allow solar energy farms of the size required to be constructed.

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  66. Emerald,
    The Board of Inquiry hearing for the 540MW Te Akau wind farm (proper name Hauāuru mā raki) hasn’t even started yet so I assume the ‘evidence’ you refer to is from submitters on the proposal or the application documents from Contact Energy?

    Can you please post a link to that “latest data” on merits of gas and wind generation.

    By the way, a perfect example of “non-coal RELIABLE base generation” is geothermal. GNS Science said last month that NZ has a “vast and underappreciated geothermal resource”, and “industry experts have suggested up to 2,000MW of geothermal generation is feasible using existing technologies and respecting environmental constraints.”

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  67. http://windenergy.org.nz/media-centre/media-centre/171-more-power-in-wind
    reports that a record 3% of our electricity was generated from wind in the December 2008 quarter and > 1000GWHr last year.

    How would “…more non-coal RELIABLE base generation” “increase hydroelectric power utilization.”? Surely that would compete with hydro?

    I suspect Contact is referring to the amount that wind was able to generate at recent peak demand periods. This is misleading, as wind power’s benefit is to conserve hydro storage throughout the year, and is not claimed to be available at times of peak demand – usually cold, cloudy and often still winter days (and nights).

    “What’s going to happen to these huge capital intensive dinosaurs when cheap distributed solar power arrives in a few years?” I presume you mean gas-fired power stations.

    Trevor.

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  68. “industry experts have suggested up to 2,000MW of geothermal generation is feasible using existing technologies and respecting environmental constraints.”

    What they are not saying is that the 2000MW is continuous generation, i.e. geothermal plants running at >95% capacity factors. The figure would be higher if the geothermal plants were set up to run at less than 95% capacity factor, i.e. if extra generation capacity is added. As we increase the amount of wind, run-of-river hydro, solar (including for water heating) and still to come wave and solar utilisation, there will be increasing periods when we don’t need the full output of geothermal stations. Their heat/hot water can be conserved for times of higher demand or when the other resources are unavailable. Another name for this is “hydro-firming”, i.e. supporting this use of our hydro power stations.

    I see potential for 2500-3000 MW of installed geothermal capacity – still only a fraction of our current peak demand (>7000MW).

    Trevor.

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  69. China’s stranglehold on rare metals

    By Senior Writer Eoin Gleeson Apr 03, 2009
    Eoin Gleeson

    China’s proposals for a new world currency to replace the dollar have drawn a lot of attention in recent weeks. But the Americans should be more concerned about another development that’s largely been ignored. It seems that after 15 years of fighting tooth and claw, China is now the world’s dominant supplier of an obscure group of minerals called rare earth metals.
    http://www.moneyweek.com/investment-advice/chinas-stranglehold-on-rare-metals-42908.aspx

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  70. A shortage of rare earth metals would not be good. They are used to make strong permanent magnets, required for small, light, powerful, efficient motors, generators and speakers. A shortage would impact many forms of renewable power generation including wind and wave, but would also impact electric and hybrid cars and other vehicles.

    Trevor.

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  71. Strings,
    lol, just imagine the nimby’s when it comes to a proposal for a giant death ray in their back yard for transportation of energy from orbit to the ground :P the various ways to safeguard it are irrelivant :)

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  72. New Zealand wouldn’t be ideal for satellite power station ground stations – we are too far from the equator.

    If you want a scary idea, it has been seriously proposed to fit big laser targets on top of long-range commercial aircraft and to direct a laser beam at the target from orbital satellites to heat the target to provide the heat for a modified jet engine, instead of using fossil fuel. This would only be used at altitude, so conventional engines would be used for take-off and landing. The laser would be on a frequency absorbed by water vapour so should it miss the plane through a serious failure, it would be largely attenuated before reaching the ground, and it would also be defocussed and moving at nearly supersonic speeds thus posing little risk to anyone/anything on the ground.

    And no, this is not an April fool’s joke.

    Trevor.

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  73. I always think that tidal power in Cook Strait is our biggest potential power generator. Whilst they may not product 100% of the time (I assume tidal flows are minimal at peak high and low tides), they are completely predictable, enviornmentally reasonable (no visual effects or CO2 emissions makes a great start) and well positioned in the middle of the country to serve either the North Island or the South Island. The Kaipara Harbour is also potentially a good location for tidal generation.

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  74. New Zealand has another significant energy resource which has not yet been tapped – fresh water. See:
    http://www.statkraft.com/pub/innovation/tecnology/osmotic_power/how_osmotic_power_works.asp
    for how it is possible to generate power from fresh water running into salty water. The expected output is about 1MW per cumec, i.e. a river that runs at 100 cumecs (cubic metres of water per second) could provide 100MW of power. No hills required. No smokestacks or cooling towers either. And since this is only available on the coast, it is handy for shipping the necessary machinery and plant to the site.

    Because of the high cost of the plant per Megawatt, I expect that this would only suit base-load generation, i.e. the plant would be designed around a constant water flow and generate power all the time.

    It could also be quite good for our off-shore islands, to save running diesel generators if they have the necessary fresh water availability.

    Trevor.

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  75. @Trevor29 This would only be good for rivers that are already so polluted that they don’t have any ecological values whatsoever – it looks like an environmental nightmare scenario for rivers!

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  76. The rivers aren’t affected, except at the sea mouth. Care would be needed to ensure that salty water doesn’t travel further upriver at high tide, and I don’t expect that the entire river flow would be used, so fish (such as salmon) would still be able to make their way upstream. It would certainly have less impact than a conventional hydro power station.

    Trevor.

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  77. According to yesterday’s Press, Contact has released a discussion document on plans to build up to four new power stations on the Clutha River. Unfortunately it isn’t on Contact’s website yet. Like Meridian’s Project Aqua these are old MoW plans that have been dusted off.

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  78. Contact now has their web site up:
    http://www.contactenergy.co.nz/web/view?page=/contentiw/pages/ourprojects/cluthahydro-projects&vert=ch

    Note that there are four options. Two (Beaumont and Tuapeka) raise the same section of river up to 69m above sea level so only one of these two can proceed. Therefore only a maximum of three new power stations can go ahead. The web site suggests that Contact only want to proceed with one option at this time, but I imagine that they will want to proceed with a second and third option later, perhaps in 10-15 years time.

    Trevor.

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  79. A report has just been released on gas available for electricity generation in NZ http://www.electricitycommission.govt.nz/opdev/modelling/information/index.html

    Seems clear that natural gas will be priced out of the baseload electricity generation market – which may cause problems for Genesis Energy. They’ve won planning approval for the new Rodney Power Station but the zoning rules say Genesis can only operate a CCGT (baseload) plant there – an open cycle peaker plant is not an option.

    Excerpt from the Electricity Commission report:
    “If large quantities of gas are discovered in New Zealand either offshore (e.g. Deepwater Taranaki), in the South Island (e.g. Great South basin) or even not far from existing infrastructure in the North Island (e.g. East Coast, Northland and Taranaki), the field owners could sell it internationally at a potentially higher price than the local market would be prepared to pay due to the previously mentioned alternative of renewable generation in New Zealand (section 5.1) and the likely limited size of the New Zealand gas market. The domestic gas price could therefore be set to the international LNG price minus the cost of liquefaction, shipping and regasification.”

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