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Wind farm on environmental, economic and "climate

The New Zealand Climate Science Coalition
13 November 2009
For Immediate Release

Huge wind farm in New Zealand canned on environmental, economic and "climate change" grounds

Project Hayes was a 630 MW wind farm proposed for an upland plateau in Central Otago in the South Island of New Zealand. An appeal to the Environment Court has resulted in a judgement revoking the consent granted about two years ago under New Zealand's Resource Management Act.

Several groups of local residents appealed the original consent on the grounds that it would destroy an area of outstanding natural beauty. A businessman from Auckland with property in Central Otago appealed on the grounds that it was seriously uneconomic compared to alternative generation and that, because fears of dangerous man-made global warming were not supported by the evidence, there was no grounds to build it to "fight climate change". As expert witnesses, he engaged Professor Bob Carter, Professor Chris de Freitas and Dr Kesten Green to put the case that there were no grounds for believing in dangerous man-made global warming and Bryan Leyland, a very experienced power systems engineer, to demonstrate that wind power was expensive and an "uneconomic use of resources"

The hearing was held before four Commissioners at the Environment Court where expert witnesses from both sides presented evidence and argued the costs and benefits both for and against the wind farm over a period of nearly two years.

In consideration of climate change matters under Section 7 of the Act, the court listened carefully to arguments countering the IPCC "projections" of impending dangerous man-made global warming put forward by Carter, De Freitas and Green. However, their conclusion was that the government had decreed that it believed in dangerous man- made global warming, so they had to accept this decree. But the decision leaves open the possibility that, as a result of the evidence presented, they gave less weight to Meridian's claimed climate change benefits than they would otherwise have done.

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Bryan Leyland presented evidence on the cost of wind farms worldwide and presented a detailed economic analysis that showed that the cost to the consumer of the power generated was about twice the cost of alternatives like hydropower, geothermal or coal. When cross questioned on the economics of the project he finally said: "If it cost half as much and the wind blew strongest in the autumn instead of springtime, I would be all for it."

The 350 page judgement was delivered after nine months of deliberation by the Court. The judgement acknowledged the outstanding value of the landscape and loss of this value if the wind farm was built. The other major component of the decision revolved around the magnitude of the economic benefit to people and communities from building this wind farm compared to alternatives. The court was very critical of the lack of economic analysis undertaken by Meridian Energy, the promoters of the project, and commented that "We find it extraordinary that in a $2 billion project more effort was not made by Meridian to value more of the costs and benefits much more thoroughly. It is even more remarkable that two governments endorsed the proposal without insisting that Meridian carried out a cost benefit analysis, or requesting Treasury to do so."

The judgement of the Commissioners was three to one against the project. The fourth commissioner, in a supplementary statement, said that "I come down on the side of the Meridian's proposal, albeit by a small margin".

For New Zealand, this decision raises the bar for all other wind farm proposals and implies that without a comprehensive and detailed economic analysis on national terms, they will not be approved. As Bryan Leyland demonstrated, such an economic analysis will show that wind farms in New Zealand cannot compete with alternative forms of generation even if a reasonable allowance is made for a carbon tax in one form or another.

For wind energy globally, the judgement drives home the fact that wind farms embedded in major power systems are seriously uneconomic because of high costs, an even lower capacity factor than is achieved in New Zealand, the need for backup generation and for additional transmission lines. All these wind farms are uneconomic and are commercially viable because of only massive consumer funded subsidies. It also demonstrates that if a wind farm is opposed on well supported environmental, economic and climate change grounds, success is more likely.


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