Magazine article New Zealand Management

An Energetic Debate

Magazine article New Zealand Management

An Energetic Debate

Article excerpt

Economic discussion became energised--so to speak--by Meridian Energy's decision to pull the plug on its plans to build the $1.2 billion hydroelectric scheme known as Project Aqua.

According to one account, a nail was driven into Aqua's coffin by a recent geotechnical investigation of soil and rock characteristics in the Waitaki River valley. It seems there had been an intention to use local soil to line the canals in the lower valley, but testing showed it was unsuitable. Other tests showed rock layers beneath the proposed power stations potentially unsafe, or at least insufficiently solid.

These look like powerful reasons for halting the project--or at least causing a serious review. Even so, there was a widespread impression that the Resource Management Act was the villain which obliged Meridian to scuttle the project.

The RMA has long been high on business leaders' list of impediments to economic development. A recently published Treasury paper raised questions about the RMA too, saying it is causing delays to projects. Giving priority to major projects the Government was considering, however, might delay smaller projects, the Treasury cautioned.

While the RMA was cited by Meridian as a factor in its decision to halt Project Aqua, chief executive Keith Turner called for caution. He urged the electricity industry to think strategically and suggest practical improvements to the law rather than simply rail against it as business organisation leaders tend generally to do.

The other spectre raised by Project Aquas scrapping was the role of coal in generating electricity. Turner told the National Power Conference in Auckland coal is the most realistic alternative.

"We are inevitably heading towards major coal development," he said (although his company is focused on renewable energy sources and has no plans to build its own coal-fired power stations). "I say 'get on with it.'"

Good-oh. Among other reasons for favouring coal, the experts reckon, is the fact that there is enough of it to provide for the country's energy needs for up to 400 years. Coal reserves are the equivalent of 50 Maul gas fields and power could be produced at a low price almost forever, said Solid Energy chief executive Don Elder.

Solid Energy is working on a coal-fired power station in Buller and plans to apply for a resource consent next year. It is also considering coal-fired plants in Southland and the upper North Island. …

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