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Ormat Technologies of Israel has announced contracts worth about US$20 million ($28.7 million) to expand the geothermal power station at Ngawha in the Far North.
Ormat said yesterday it had entered supply and engineering, procurement and construction contracts with Top Energy subsidiary Ngawha Generation.
Construction of the power plant was expected to be finished within 20 months from the contract date.
Top Energy has been operating an Ormat 12MW geothermal power plant in Ngawha since June 1998.
The plant and the new one would produce about 75 per cent of the electricity used by Top Energy's 26,000 consumers.
Top Energy announced last September that it had received resource consents for the plant expansion, which would lift generating capacity to about 25MW.
Resource consents were originally lodged in 2004 but the right to draw and reinject an increased volume of geothermal fluid, necessary to increase the plant's output, was declined.
On appeal, Top Energy was granted consents for a six-month trial period during which testing showed there should be no adverse impact on the geothermal field's reservoir pressure, Top Energy said at the time.
Consents were granted after a two-week hearing before the Environment Court in late July 2006.
Top Energy chairman Paul Byrnes said the Ngawha expansion would reduce the company's exposure to possible failures in the grid to the south.
The new plant would add almost $50 million to the value of the company's assets - owned by Far North power consumers through the Top Energy Consumer Trust - and the investment should pay for itself within 10 years.
Ormat said the Ngawha contract was its 10th supply contract in this country.
Upon completion of the Ngawha plant, the total installed capacity of Ormat's power plants in New Zealand would exceed 200MW.
Ormat Technologies chairman and chief technology officer Lucien Bronicki said the new plant would optimise energy use by converting both geothermal steam and brine from geothermal wells into electricity.
"New Zealand is a significant resource for geothermal development, which we believe will provide Ormat with additional growth opportunities that we look forward to developing," Bronicki said.
For the year to the end of March, net after-tax profit for the Top Energy Group was $3.5 million, down from $4.7 million in the previous year. The fall in profit was a result of an increase in depreciation charges.
- NZPA
