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Cancellation Of Project Aqua – Contact Energy

Cancellation Of Project Aqua – Contact Energy Response

New Zealand has plenty of options to meet its future energy needs, but cancellation of Project Aqua sharply focuses the debate on what those options are, Contact Energy’s chief executive, Mr Steve Barrett, said today.

Reacting to the announcement by Meridian Energy that it would not proceed with the Waitaki hydro scheme, Mr Barrett said the decision showed that all options for new power generation raised important environmental issues, including those using renewable resources.

“The Aqua decision doesn’t mean that the lights will go out, but it does show that the opportunities to develop new power stations using renewable resources are more limited than we had previously assumed,” said Mr Barrett.

“To keep the lights on in New Zealand, it is clear that we will need to put more emphasis on exploring thermal options using gas or coal to meet growing energy demand.

“That brings into focus the wider questions that New Zealand must face. Those are:

what trade-offs is the country willing to accept to maintain a secure supply of electricity? what environmental impacts are we willing to accept in exchange for that secure supply? what costs are we willing to bear to manage the environmental impacts and keep the lights on?

The Aqua decision demonstrates how difficult it has become to gain consents for major developments under the current Resource Management Act framework.

“Looking ahead, the detail of the proposed new carbon tax remains a key source of uncertainty that the Government should move quickly to resolve,” Mr Barrett said. “Decisions on thermal plant will be seriously hampered without certainty on this crucial issue.”

However, Project Aqua was by no means New Zealand’s only option for meeting growing future energy demand.

“Contact will be intensifying existing efforts to explore alternative sources of fuel for thermal power stations running on gas or coal and on new renewable technologies such as a wind, geothermal energy and small-scale hydro.

“It will also sharpen our focus on assisting with national strategies to use energy as efficiently as possible,” Mr Barrett said.

Contact is already working hard on alternative new generation options.

These include:

having already secured two sites with resource consents to construct new gas-fired plant pursuing more activity in the gas exploration sector through the recently announced intention to seed an $80 million exploration fund, in conjunction with Mighty River Power funding a joint study with Genesis Energy into the feasibility of importing Liquefied Natural Gas (LNG) pursuing a similar study into the viability of coal taking renewed interest in wind generation opportunities.

In addition, Contact is:

enhancing output from its geothermal resources with a new binary plant at the Wairakei power station planning to add capacity to the Clutha scheme by adding hydro turbines to the existing riverflow control gates on Lake Hawea.

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