Contact Energy’s application for a fast-tracked resource consent for the 250MW Tauhara geothermal power station will be the first to be considered by Environment Minister Nick Smith under the new, streamlined Environmental Protection Authority process. Under the new process, applicants seek Ministerial approval through the EPA for a decision within nine months. The changes are a key part of Smith’s “phase one” Resource Management Act reforms, enacted last year, to speed up applications for infrastructure of national significance. Contact already holds a consent to replace the 168MW Wairakei plant with a 220MW plant nearby at Te Mihi, but deferred a construction start date last year as electricity market conditions softened. It remains the more likely of the two projects to be built first. Contact has been particularly careful to research potential subsidence impacts from Tauhara. MD David Baldwin says “the results of this work give Contact confidence that land subsidence will not be an issue with the development.”

Subsidence on the outskirts of Taupo was a major issue in Contact’s six year battle to renew consents for the ageing Wairakei geothermal power station. Contact ultimately succeeded in showing no link between its geothermal extraction at Wairakei and subsidence on the opposite side of Taupo. The Tauhara plant is the second stage of developments in the Tauhara geothermal steamfield, which is adjacent to the Wairakei resource. The 23MW stage one binary plant is close to completion.

Meanwhile, Contact is to pursue a geothermal joint venture with Taheke 8C, a family-affiliated Maori land-owner with connections to the Ngati Pikiao iwi. Taheke owns land over a geothermal steamfield on the shores of Lake Rotoiti, which has yet to be assessed for its commercial potential. An exploration programme is planned over the next two years.

As a greenfields opportunity, it can be expected to require a higher long run marginal cost of wholesale electricity to sustain an investment than the current crop of “brownfields” geothermal developments currently under construction or consenting by both MRP and Contact. MRP has previously indicated LRMC above $100MWh for greenfields geothermal, making it comparable with wind farm opportunities. Geothermal power in areas where the resource is already understood and in use is currently the most attractive new generation option, with LRMC of $85MWh-plus.

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