Genesis' coal plan founders

By CHRIS DANIELS energy writer

State-owned power generator Genesis' plans to import 500,000 tonnes of coal to provide winter power supply security appear to have foundered.

Genesis, which owns and runs the Huntly power station, said last month it would import the coal from Indonesia and Australia.

This coal, to be shipped on log carriers returning empty from Asia, would have provided a safety net in the event of a dry winter shutting down hydroelectric generators.

Huntly power station is New Zealand's biggest thermal plant, with a capacity of 1000 megawatts, compared with 432 megawatts at Clyde Dam. It can run on coal, natural gas, or a combination of the two.

Other generators have become sceptical of Genesis' ability to run Huntly at full capacity in the event of a dry winter, given that it can no longer rely on Maui gas supplies.

They say Huntly is not running at full capacity, forcing them to use precious water to meet demand.

Genesis chief executive Murray Jackson said the imported coal, due to arrive in Tauranga in July, would not all be here for winter use, though he had never promised it would.

Acting Prime Minister Michael Cullen, who is one of Genesis' shareholding ministers, said yesterday he had taken a "particular interest" in the Genesis coal situation.

The Government had moved to ensure there was a sufficient coal supply and had wanted an assurance from Genesis that it was doing everything it could to ensure adequate supply, "because the capacity to run Huntly is going to be quite crucial".

Full disclosure of fuel stockpiles for thermal power stations is one of the new developments in this latest energy crisis, with the hydro generators in particular wanting to know what is available.

Holes in the coal import plan became apparent when Port of Tauranga confirmed only three trial coal shipments would arrive this winter, carrying far less than the promised 500,000 tonnes.

It does not yet have the facilities needed to shift large amounts of coal.

Jackson told the Business Herald the Huntly station was using coal as fast as local mines could produce it and producing electricity at full load.

He said the 500,000 tonnes referred to was not for this winter, but would arrive in New Zealand later this year.

Despite this, Huntly had enough coal for this winter, said Jackson, and it was not crucial that all the imported coal arrive before winter.

"I can see what is on the stockpile and what is coming in from the mines and what's coming in from the gas fields will keep us up on full load," he said.

One industry observer said many in the industry had doubted Genesis' ability to secure coal for winter.

Other generators are understood to be unhappy at Jackson's coal importing promises, which have not always been backed by firm supply contracts. Many question whether Genesis had planned for the possibility of a dry winter.

Supply contracts have been finalised for only a fraction of the 500,000 tonnes, with most of the coal coming from Indonesia. It will be trucked to a quarry near Tauranga.

Confirmation that only small amounts of coal will be imported before winter was not expected to alter crisis planning. The promised stockpile had not been included in fuel supply modelling.

Political concern at reaction to a state-owned company importing coal to fire a power station built on a coal field is thought to be behind statements by the Prime Minister that the electricity sector needed a shakeup.