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Geothermal resources are sufficient to power more than 90 per cent of households, state-owned power generator Mighty River said yesterday.
At a sod-turning ceremony to mark the start of construction of a new 90MW $275 million geothermal power station at Kawerau, chief executive Doug Heffernan said geothermal generation would play an increasingly vital role in the future.
Kawerau is the first stage in plans to develop about 400MW of geothermal energy in the next five to 10 years - or enough power for 400,000 homes.
"We have identified a further 800MW of potential resource that could also be developed, subject to gaining land access agreements, resource consents and sufficient transmission infrastructure," Mr Heffernan said.
Together, this represents a resource of 1200MW, enough to supply 1.2 million homes - 93 per cent of the 1.3 million dwellings .
The new power station will be the largest single geothermal power development in more than 20 years and will produce more energy annually than all existing wind turbines.
Mr Heffernan said Mighty River's primary focus was on geothermal generation because it had several distinct advantages over other renewable energy sources.
"Geothermal power is not subject to climate variations such as wind speed or the amount of rain fall so it can contribute to the country's energy requirements with more certainty," he said.
In addition, it did not damage the surrounding environment as much as other power-generation technologies.
Economic and population growth is driving energy demand up 2 per cent a year - roughly the equivalent of adding a city the size of Tauranga to the national grid each year.
Mr Heffernan said several new generation projects were either in the application stage or had been granted resource consents, as well as the discovery of new fuel sources, improving the supply outlook for the next decade.
Once complete, Kawerau geothermal will meet about one-third of residential and industrial demand in the region.
"It will also provide energy cost certainty to important local industry such as the Norske Skog Tasman plant and is a boost for the local economy through employment and the use of local contractors during construction," Mr Heffernan said.
Construction of the Kawerau plant was the culmination of four years' planning, with agreements negotiated with the Crown, Ngati Tuwharetoa (Bay of Plenty) Settlement Trust, Putauaki Trust and Norske Skog Tasman.
Energy and Climate Change Minister David Parker said geothermal power was in accord with the Government's policy of developing a more sustainable energy future.
"It is encouraging to see the significant progress Mighty River Power has made in this area," Mr Parker said.
- Additional reporting Simon O'Rourke
