Wind farm not by Wel alone? 

Wel Networks finally has consents for a wind farm at Te Uku, but says it’s now down to economics.

Building the Te Uku wind farm as a joint venture with a large electricity generator might be the best path forward for Wel Networks, now it has resource consent for the project.

That was the view of Wel Networks chief executive Julian Elder in responding to comments from project opponent Rodger Gallagher, who now predicts the $200 million wind farm will never be built.

Mr Gallagher said any appeal against the project would rest on the wishes of the Raglan-Whaingaroa community and would most likely succeed on legal points based on the process used by the commissioners.

But he noted the main reason for constructing the wind farm was to profit from government and emission subsidies which now looked uncertain.

He said a “shoddy” Wel application had been assisted by commissioners imposing “minimal” conditions, but was encouraged the company would only proceed if emissions trading economics stacked up.

“This is an unexpected piece of common sense emerging from Wel,” he said.

“Stanford University (US) researchers who’ve studied carbon credits say the emissions cuts are largely illusory. As many as two-thirds of the programmes funded contribute nothing new to reducing emissions .. I believe that Wel will not proceed with the Te Uku wind farm.”

But Dr Elder said while there was uncertainty as to how the mechanics of carbon trading may evolve in New Zealand, that was still the general direction in which the world was moving.

“Carbon is being priced at quite high levels,” he said. “I believe it is where we are headed. “The economic questions still have to be answered completely, and there is uncertainty about timing, but it is hard to think it wouldn’t go ahead at some point in time.

“Having a partner is the logical way forward for Wel. It makes sense to have one of the large generators involved because of expertise they would bring to the project.

“Now that we have got consent, we will be running the economic model again.”

Commissioners accepted Wel evidence that the Te Uku proposal would save 168,000 tonnes of CO2 emissions a year.

However Mr Gallagher said the formula used an emissions factor which assumed that electricity produced by its turbines would exclusively replace that generated by a coal-fired power station.

But in reality wind power replaced electricity generated from a mixture of sources which, on average only produced half the amount of carbon being claimed as a potential saving, he said.

Wel Energy Trust chairman Gary Mallett partially agreed with Mr Gallagher.

“I absolutely agree with the premise that the Kyoto protocol is a load of junk and leads us down a path to civilisational suicide,” he said. “But, unfortunately that is the current system we have to work within. I don’t like our tax laws either, but I still pay my taxes.

“The wind farm will only go ahead if it is economic, and there are lots of variables some of which may make it uneconomic, such as the price of power dropping or the cost of construction rising.”

Wel Networks has seven years to construct the wind farm under its resource consent. It had sought a 10-year period.

During the consent hearing consultants Deloitte rated the project as a “marginal” investment.

By Bruce Holloway

Waikato Times

7 June 2008