Giant hydro power plans surge ahead

By CHRIS DANIELS

Plans for a new billion-dollar South Island hydro-electric power scheme are moving ahead quickly, with resource consent applications to be filed within three months.

State-owned power company Meridian Energy gave an update on the scheme, named Project Aqua, at a major utilities conference in Auckland yesterday.

Assuming all goes according to plan, and the economics are favourable, the first electricity could be coming from the canal-based scheme within six years.

Project director Ben Mitchell told delegates at the Utilicon conference that the first resource consent applications would be made to various local authorities in June.

Project Aqua will be based around the Waitaki River, where a series of dams already generate power on the upper reaches.

The Meridian scheme envisages a diversion of the river, with two thirds of the water running down a 62km canal, going through a sequence of six power stations, then rejoining the river before it empties into the sea between Waimate and Oamaru.

In combination, the six power houses would generate 570 MW or 3200 GWh of electricity.

This is as much as the massive Clyde Dam in Central Otago and enough electricity to supply 8 per cent of New Zealand's power needs.

While variations of a canal-based power scheme on the lower Waitaki River have been circulating for decades, all had been much more expensive, said Mitchell.

The plans as they stand now would cost around $970 million, up to 70 per cent cheaper than more ambitious schemes of past years.

Despite much of Project Aqua's planning already being done, one thing Mitchell could not say was what its effect on wholesale electricity prices would be.

Some economic growth is predicted for the lower South Island, but most of the anticipated demand is coming from the Upper North Island, especially Auckland.

This would mean all the power generated from the six power stations would need to be transported along Transpower's national grid.

Other power companies, such as Genesis and Contact, are developing plans to increase electricity generation in spots as close to Auckland as is practical - Contact at Otahuhu and Genesis at Huntly.

Another contentious issue likely to arise from Meridian's plan is the question of who should pay for new transmission lines that would be owned and run by Transpower.

The state-owned owner of the national grid may tell Meridian that since it will be making good profits from its new power stations, it should pay for the transmission lines to be built.