Mercury avoids $1.5 million in fines after ‘steam hammer’ event

Mercury NZ has made commitments towards improving safety after an incident at its Rotokawa geothermal power station, near Taupō, in 2021.

Power generator Mercury NZ has avoided paying up to $1.5 million in fines by committing to improve safety after an incident at its Rotokawa geothermal power station, near Taupō, in 2021.

WorkSafe New Zealand said Mercury had signed a commitment in response to the uncontrolled release of geothermal steam, called a “steam hammer” event, at Rotokawa.

A “steam hammer” event happens when steam meets cooler liquid in pipework and fittings, causing severe vibrations that can lead to catastrophic failure.

WorkSafe said while no one was injured during the event, it could have seriously harmed workers if they had been in the area at the time.

A WorkSafe investigation found shortcomings in plant installation decisions and risk assessment by Mercury, and ineffective communication between off-site control room operators and personnel on-site.

“The loss of containment was incredibly dangerous,” WorkSafe’s regulatory support manager, Catalijne Pille, said.

“The pipework had been exposed to extreme forces, with an intensity that ejected flange bolts, split valve bonnets and tore welded fixings,” she said.

“Businesses must do everything they can to meet their responsibilities under the Health and Safety at Work Act.”

WorkSafe said Mercury had committed to spend $1.15m on safety improvements.

Its plan, known as an enforceable undertaking, includes:

Trialling a self-driving vehicle for plant inspections;

• Delivery of a leadership programme to promote a proactive safety culture;
• Introduction of training focused on hazard awareness and safety in high-risk environments;
• Sharing the resources developed and lessons learned from the incident with industry.

“Mercury plans to trial self-drive vehicles to supplement in-person operator rounds, which can only be good for safety,” Pille said.

“The data insights will aid decision-making and help with continuous improvement of processes and procedures.”

As a result of the agreement, WorkSafe’s charges against Mercury have been discontinued.

“The investment from Mercury is the preferred solution in this case.

“It demonstrates a substantial commitment to health and safety, with benefits to workers, community and the industry that may not have been achieved by prosecution,” WorkSafe said.

Mercury’s executive general manager of generation, Stew Hamilton, said the company was constantly working to improve safety.

“While no one was harmed in this event, it is important that we reflect on this incident and how we can continue to improve on our safety performance,” he said in a statement.

“Key work within this will include further education and coaching, autonomous inspections of certain sites, mechanisms to share [lessons learned] with others, donations to emergency service providers and support of a health and safety scholarship,” Hamilton said.

Mercury faced two charges.

The first charge, under Section 36 of the Act, alleged the company did not ensure the safety of workers so far as is reasonably practical.

The second was under the less frequently used Section 43, which requires companies to protect the safety of workers during the construction or commissioning of a plant or structure.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.