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State-owned Mighty River Power today began construction of a $275 million 90 megawatt geothermal power station in the eastern Bay of Plenty.
The new Kawerau power station will be the largest geothermal power development in New Zealand in more than 20 years.
It will produce more energy annually than all of the country's existing wind turbines, chief executive Doug Heffernan said.
It took four years to gain all consents and was due to come into production in 2008.
He said geothermal generation would play an increasingly vital role in New Zealand's energy future.
It could ultimately develop 1200MW of the renewable resource -- sufficient to power 1.2 million homes.
Mr Heffernan said Kawerau was the first stage in the company's plans to develop around 400MW of geothermal energy in the next five to 10 years.
"In addition, we have identified a further 800MW of potential resource which could also be developed in the longer term, subject to gaining land access agreements, resource consents and sufficient transmission infrastructure," he said.
Mr Heffernan said Mighty River was focusing on geothermal generation because it had a number of distinct advantages over other renewable energy sources.
"Unlike other renewable energy sources, such as wind and hydro, geothermal is not subject to the climate variations such as wind speed or the amount of rain fall.
"Because of this it can contribute to the country's energy requirements with more certainty."
He said geothermal energy also had a much smaller environmental footprint than other forms of generation.
Mighty River had already worked with iwi partners to enhance production at the Mokai and Rotokawa geothermal plants.
Mr Heffernan said that through these developments and others in the energy industry, New Zealand's fuel supply outlook for the next decade had improved.
Energy demand was growing at 2 per cent annually.
"However the number of new generation projects that are either in the application stage or have been granted resource consents, as well as the discovery of new fuel sources, has improved the supply outlook for meeting this additional demand over the next decade."
Once complete, the Kawerau geothermal station would meet about one third of the eastern Bay of Plenty's demand, including supplying the Norske Skog Tasman forest products plant.
Minister for Energy & Climate Change David Parker congratulated Mighty River on its geothermal programme which he said was in line with the Government's policy of New Zealand moving to fully renewable energy.
- NZPA
