Contact calls halt to Clutha hydro plans

Clyde Dam on the Clutha River. Photo / Supplied

Contact Energy has withdrawn plans for further hydro development on the Clutha River and will review management and ownership of its land holdings near the river.

The decision, announced yesterday, comes after Contact signalled in February delays in its plans for a new hydro-generation facility on the Clutha, saying the project was on the "back burner" and geothermal energy remained a priority.

Contact spokeswoman Janet Carson said at that time the four Clutha hydro development options at Tuapeka Mouth, Queensberry, Luggate and Beaumont "remained open", but were "more likely to be further down the track, probably into the next decade".

Contact said in 2008 it was revisiting plans for dams on the upper and lower Clutha, costing between $300 million and $1.5 billion, which were first proposed more than 20 years ago by its predecessor, the Electricity Corporation.

Contact hydro projects manager Neil Gillespie confirmed last night that he had notified "as many of the stakeholders and people that we've talked to over the last three years" of the formal decision to end the Clutha hydro development project.

"Contact has decided not to proceed with any of the options being investigated for hydro-generation development on the Clutha at this time and has ceased all work pertaining to it."

But he told the Otago Daily Times last night that he could not permanently rule out hydro development on the river, as "who knows what the future holds".

Contact would now review future management and ownership of all of its land holdings near the Clutha River as part of its ongoing land management strategy. Gillespie was unable to provide the extent of that land, but confirmed selling it was "one of the options that could come out of [the review]".

Contact chief executive Dennis Barnes said the company's investigations over the past three years had shown none of the options considered were viable for development.

"It has become clear that all future Clutha hydro options came in at a much higher cost per megawatt to build than the next available new geothermal and wind generation options. On current demand forecasts, the Clutha options are not economic in the foreseeable future.

"Contact has a range of new generation in the pipeline, either confirmed, consented or under construction, to meet foreseeable electricity demand."

Barnes thanked people who had provided feedback on the project, which was "an essential part of our assessment of the relative merits of each scheme".

Clutha River Forum, an alliance of river and conservation groups opposed to "think-big" hydro development on the Clutha, was set up in 2009.

Forum co-ordinator Lewis Verduyn, of Wanaka, said yesterday's announcement was not a surprise.

"For some time now, we have known that New Zealand energy companies have been experiencing a low growth environment in the wake of the global financial crisis," Verduyn said. "What we need most now are energy smart technologies."

- OTAGO DAILY TIMES