By Robert McLachlan 24/03/2021


I first wrote about New Zealand wind farms in May of 2019 (“A long time between drinks“). At that time, Mercury’s decision to build the Turitea wind farm seemed to me to be extremely significant, but also hard to interpret in terms of the larger scheme of things. Could it be that our low-emission transition was actually going to get started?

By the end of that year (“Blow, winds of fruitfulness“) there had been a flurry of activity (four more wind farms?!?!?), but the future was still misty.

And now here we are in March of 2021. Amidst all the excitement of the Zero Carbon Act, an election, and the Climate Change Commission getting up and running, what’s been happening with renewable energy?

First, if you’re reading from overseas, a warning. This is New Zealand. You won’t be seeing vast solar panels marching across the deserts, city-sized fleets of electric buses, or mega-projects of any sort (unless they involve motorways). No, here we need to examine the gleanings.

So here are the developments since December of 2019:

  • On 22 December 2020, a long-tailed bat was thrown into the works of the 93 MW Mt Cass wind farm (Canterbury). The developer says the project has been delayed, but is still expected to start towards the end of 2021.
  • The 222 MW Turitea wind farm (Manawatū) is under construction, but has been delayed by a slip preventing transport of the blades up to the site and a fire onboard a ship that destroyed 12 nacelles and 11 hubs. It’s definitely happening, though, I can see the towers and turbines from where I’m sitting. The first stage should be finished by April.
  • The 133 MW Waipipi wind farm (Taranaki) is nearly finished, suffering only an incident in which a blade was blown over en route.
  • On 15 February 2021, Contact Energy pressed go on the 152 MW Tauhara II geothermal plant near Taupō ($580 million, but equivalent to over 300 MW of wind).
  • On 24 February 2021, Meridian pressed go on the 176 MW Harapaki wind farm in Hawke’s Bay. The capital cost of $395 million, over a 20 year lifetime, comes out to 3 cents per kilowatt-hour, far below present wholesale prices for electricity. They also hinted at much more to come.
  • On 1 March 2021, plans for two turbines on Rakiura / Stewart Island – which would have been funded entirely by the government – were canned after “agreement could not be reached with the land owners”. The islanders will continue eking out their expensive, high-emission diesel-fired electricity.
  • On 24 March 2021, Contact Energy announced it was moving into wind energy for the first time, with an initial site lined up in Southland and more to come.
  • Genesis Energy is still being coy about the prospects for its 860 MW Castle Hill farm. No solid news.

On the way to Waipipi. Source: Taranaki Daily News

Turbine blades waiting for a ride up a hill, Palmerston North. Photo: Warwick Smith / Stuff.

All up, that’s 776 MW of new generation, and very welcome it is too. It can’t come a moment too soon. Electricity prices are still high,

2016 5.8c
2017 8.1c
2018 11.3c
2019 13.4c
2020 11.1c
2021 Jan-Feb 19.8c
Wholesale electricity prices


 

the hydro lakes are a quarter below average for this time of year, heading into the dry season, the renewable share has been drifting down from 85% to 81%, Genesis has fired up a spare 250 MW coal/gas unit for the second year running, and the papers are complaining about record coal imports.

So the new farms and the encouraging comments from power companies are positive signs. Perhaps the carbon price (which hit $39, up from a low of $22 in 2020) is starting to bite, or perhaps the companies have come around to the idea that the Zero Carbon Act is here to stay. The suddenly announced closure of the Tiwai Point smelter, and then its four-year stay of execution, is another complicating factor.

Although the government was elected in 2017 with a pledge of 100% renewable electricity by 2035, and re-elected in 2020 with a new target of 100% renewable by 2030, it’s not clear what specific new steps, other than the Zero Carbon Act, have been taken to bring this about. The official target remains where it has been since 2011, 90% renewable by 2025. One of the headline items, to investigate large-scale energy storage (the “NZ Battery Project”), has been delayed.

Some manoeuvrings are hard to read. Infratil sold its majority stake in Tilt Renewables, who built Waipipi and were planning three more wind farms, to Mercury. Remember that Mercury is in the thick of building Turitea and had already installed some enabling works there for yet another farm further east, Puketoi. Will Mercury really be up for five new large wind farms?

Meanwhile, Genesis Energy, for decades the bad boy of climate change in New Zealand, has suddenly changed its tune. First, they bought all of Waipipi’s electricity for the next twenty years; then they bought half of Ecotricity, New Zealand’s only zero-carbon electricity retailer, and sold them some of Waipipi’s power. This is a company behind 10% of New Zealand’s fossil fuel burning, that has been making profits of $300 million a year seemingly forever, but somehow hasn’t built any renewable electricity since 1996. Their annual report talks about “sourcing” a lot of renewable energy, but not necessarily building any. Perhaps they are waiting to see if the government is serious about climate change. Can the leopard change its spots?