Mangahao Power station is almost a century old and generates power for 15,000 homes. Its owners fear its end is in sight thanks to the proposed RMA reforms.
Mangahao Power station is almost a century old and generates power for 15,000 homes. Its owners fear its end is in sight thanks to the proposed RMA reforms.
The proposed RMA reforms are bad for small hydroelectricity generators, says Chris Fincham of King Country Energy, owners of the Mangahao power station near Shannon, which will celebrate its centenary in November of next year.
“The Government’s RMA reforms will trap small hydroelectricity generators in an endless and costly consenting loop and lead to less investment in hydro renewable electricity generation,” he said.
“We are one of the operators of the numerous small hydro schemes around the country which connect to local electricity networks, not the national grid, and supply electricity to households around New Zealand,” he said.
Mangahao generates up to 39.9MW of electricity, enough to power 15,000 households, and has been around for almost 100 years.
“At the moment, all hydro-power schemes get 35-year consents to use water. Under the proposed Natural and Built Environment Bill, that stays the same for the large grid-connected generators. Yet the consent period is slashed to only 10 years for smaller schemes like ours,” said Fincham, who said he understands the need for the consenting process and the need to consult with the local community.
“One of our core values focuses on acting as responsible operators, and custodians for the natural environments in which we generate power. It’s the increased consenting frequency, three times more often than current settings, that we take issue with.
“These reforms will make it very difficult to commit and attract investment for upgrades to increase power output.”
“In addition, after the Bill passes new regional plans will have to be written – a process which will take seven to 10 years.
“Any small hydro consents that expire during that time will be cancelled, and once a plan is completed, we’ll have to reapply within three years. Even then, a 10-year consent is not a guarantee. It’s an expensive, time-consuming process for smaller companies like KCE.”
“Our schemes have a long life, and we hope to be generating renewable energy for our communities for another 100 years. Because of this, we have a long investment horizon of 25-plus years with ongoing maintenance, and we constantly evaluate modern enhancements to ensure we’re efficient and productive.
“It’s near impossible to run a hydro scheme that has an asset life of over 100 years if you only have certainty of up to 10 years of water – and 10 years of revenue – at a time,” he said.
“Like all independent generators, we’re not static and want to grow, and are actively looking for new renewable energy opportunities. These reforms will make it very difficult to commit and attract investment for upgrades to increase power output. New hydro schemes are unlikely to be built, and the cut in revenue will also stop us from investing in other renewables like wind and solar, something the country needs urgently right now.
He said he believed the country needs to build the equivalent of a Clyde dam’s worth of power every year to keep up with demand.
“That’s a rate of investment six times greater than what has happened over the last decade. So what is the logic behind putting all the of the nation’s small hydro schemes at risk at this time?”
He said he believed the time-consuming process should go to new schemes, rather than existing ones, as a scheme’s environmental impacts rarely change over time. He sees the proposed reforms as anti-competitive, creating an unlevel playing field as small schemes face reconsenting far more often than grid-connected generators. New Zealand has 40 small hydro schemes, collectively generating power for 100,000 homes.
“It’s in everyone’s interests to see this bill changed. Our local communities can get behind our schemes by supporting us through any upcoming reconsenting processes, and engaging with their local MP on this issue,” Fincham said.
