Output from geothermal energy could double to as much as 1400MW of installed capacity within a decade, and account for close to a fifth of national electricity output. This is the view of MightyRiverPower CEO, Doug Heffernan, who shepherded media around the newly opened 140MW Nga Awa Purua geothermal station, which opened officially near Taupo last week. A joint venture with a local Maori land-owning trust, Nga Awa Purua is remarkable for being the world’s largest single turbine geothermal plant, and its 140MW rating is 8MW above design specs. As a single piece of baseload plant, it accounts on its own for about 3% of current total electricity demand.

Compared with 10 years ago, when geothermal represented about 5% of total output and there had been very little new development during the era of low-cost Maui gas, geothermal is firmly coming into its own, comprising around 14% of national demand today. Over the same period, wind power has gone from contributing less than 1% to a little over 3% of total national electricity load. Heffernan believes the 700MW-odd of geothermal generation will double over the next decade, although demand growth for electricity will mean geothermal by then should be worth around 18% of national demand.

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Next on the list for MRP is the proposed 110MW-plus Nga Tamariki plant, which is expected to be open by mid-2013. One reason for such confidence is the development is another with the Tauhara North No.2 Trust, with whom MRP is building a solid relationship, based in large measure on trust built up over more than a decade by Heffernan himself. Tauhara representatives at last week’s tour said without Heffernan’s personal mana, the development might never have got off the ground. Now, the trust has leveraged the relationship into an investment of more than $100m, most of it bank debt-funded, and is looking to do more. Asked to define the importance of having landowners as stakeholders for a remarkably swift three day resource consent process, Heffernan replied: “About 85%.”

MRP believes geothermal plants will remain more easily consentable than wind or hydro because, despite their networks of overground pipes, their physical profile is still no more imposing than a gas-fired power station. Despite the carbon emissions from gas-fired plant, resource consents for thermal stations have been easier to gain than for large-scale renewables because they generally involve no more than a single industrial site.

Heffernan warned exchange rate movements could yet be a major factor in the timing of new geothermal builds, especially at sites where the resource has yet to be fully explored. Big swings in the exchange rate can add or subtract $10 to $15per MWh from the presumed $100 per MWh which looks necessary for greenfields plant. He says this makes the currency a much bigger factor in the future price of electricity than the emissions trading scheme. Meanwhile, Contact Energy’s latest geothermal project, the 23MW binary plant on Centennial Drive near Taupo is also very close to commissioning.

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