TrustPower plans under threat

http://www.businessday.co.nz/industries/infrastructure/4647056

TrustPower says $1.3 billion of wind and hydro-electric power projects it plans are unlikely to go ahead without a change in transmission pricing.

TrustPower has approval to build a 200MW wind farm near Dunedin and was this week granted approval to build a 72MW hydro project near Blenheim. Neither project, nor two others awaiting approval, are likely to proceed because of costs charged to South Island generators, TrustPower spokesman Graeme Purches said.

New Zealand gets about 70% of its power from wind, hydro-electric and geothermal generators and wants to increase that to 90% by 2025 to reduce emissions. Almost two-thirds of proposed new wind capacity is in the South Island. Purches said the government wanted sustainable energy, ``but they won't give us transmission pricing to make it happen''.

TrustPower is awaiting planning approval for a $440 million, 240MW wind farm near Gore, and a $185m dam on the South Island's West Coast.

The high-voltage cables were laid more than 40 years ago to carry cheaper power from the South Island dams to the North Island. In 2006, the Electricity Commission started to impose those costs only on South Island-based generators TrustPower, Contact Energy and Meridian Energy saying the link gave these companies access to higher prices in the North Island.

All other transmission costs in New Zealand are pooled and passed on to consumers. The South Island generators were charged $89.1m for the link in the year ended March. They will share the $672m cost to increase its capacity to 1000MW by 2012.

- Bloomberg