Iwi work on geothermal power plan

Te Arawa iwi are looking at building a wide-ranging collective to develop geothermal power resources in the Bay of Plenty.

According to research by Te Pumautanga o Te Arawa, an organisation which received Treaty settlements worth $85 million last year, undeveloped geothermal fields in the area have the potential to produce 500-600 megawatts a year, enough to power more than half a million homes.

Rawiri Te Whare, the organisation's chief executive, is in discussions with two Maori land trusts which already have industry joint ventures, various hapu, and other trusts with significant land holdings in the region to form a collective to explore and exploit the resource.

The organisation is also talking to Mighty River Power and Contact Energy, which could be future joint venture partners.

If a collective were established, a long-term strategy, including how equity would be raised, would need to be worked out, Mr Te Whare said.

"This year we have to move on it. We need to make significant progress so we don't miss out on opportunities."

Grouping interests made economic sense because it allowed risk to be spread and economies of scale to apply.

"Of course once you go into the power-generation industry, then you're also competing to sell your product on the national grid. We think this approach reduces the competition between our landowners. Given all of that, we know it's high risk and involves huge costs."

A working party has two months to report back to Te Pumautanga on the issue. Willie Te Aho, who is leading that group, said if 400MW was developed, the resource could be a $2 billion business.

Mighty River Power confirmed it was in discussions with Te Pumautanga. It already had a number of joint ventures with Maori land trusts and was keen to advance other projects, chief executive Doug Heffernan said.

One example was Mighty River's $430 million geothermal power station, the 132MW Nga Awa Purua near Taupo, which came on to the national grid last week.

The project was completed with Tauhara North No 2 Trust, and another $400 million joint venture was on the cards. Both provided "tangible evidence" the company could deliver on geothermal power production with Maori partners, Mr Heffernan said.

Contact Energy said it did not have any joint ventures with Maori but it was keen to develop relationships.

The company runs the 180MW Wairakei power station and produces about 5 per cent of the country's total power from its geothermal operations around Taupo.

Spokesman Jonathan Hill said it would be a billion-dollar investment to develop all of the associated Te Arawa fields. He confirmed talks were going on with iwi groups but declined to say what stage they were at.