— Contact Energy Ltd., New Zealand's biggest publicly traded power producer, has withdrawn its opposition to a rival's wind project after a judge accused the company of trying to protect itself from competition.
Contact had asked the country's Environment Court to prevent Meridian Energy Ltd. from building the 600-megawatt Hayes wind project on the South Island until there was an increase in transmission capacity from the region. It has now withdrawn that application, Wellington-based Contact said in an e-mailed statement today.
A similar bid by Contact to delay construction of TrustPower Ltd.'s NZ$400 million ($304 million) 200-megawatt Mahinerangi wind project in the same region was rejected by the court last week. In his ruling, Environment Court Judge Jeff Smith said the action was “inappropriate and unreasonable'' and intended to protect Contact from competition from new generation.
New Zealand electricity suppliers are building or seeking planning approval for 1,700 megawatts of wind turbines to increase the share of power coming from renewable sources. The pace of that work may overtake transmission capacity in some regions, forcing dam owners like Contact to release water from reservoirs rather than make power.
Joint Statement
“Building new power stations without the ability to get the power to customers isn't going to help either customers or our shareholders,'' Contact Chief Executive Officer David Baldwin said in a joint statement with Meridian Chief Executive Officer Tim Lusk.
Government-owned Meridian operates the nation's largest hydro-electric dams on the South Island. Contact runs 750 megawatts of generation at its Clyde and Roxburgh dams on the Clutha River and may also build a wind farm in the region.
The companies said they will now work together to get national grid operator Transpower New Zealand Ltd. and the Electricity Commission to increase transmission in the lower South Island.
A proposal for increasing line capacity between Roxburgh and Benmore will be submitted to the Electricity Commission in the third quarter, Transpower said in April.
