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Mighty River Plans For Marsden B "Pragmatic Trade Off Between Environment And Economy"         Chris Mole - Associate Editor

August 25, 2004

Mighty River Power’s plan to fire its mothballed Marsden B station with coal will be a test for the revamped Resource Management Act, with environmentalists vowing to oppose the project.

Mighty River intends to seek resource consents for a coal-fired station with a generating capacity of up to 320MW. The project will cost more than $100m and involves refitting the existing Marsden B plant, which has sat idle since being built in the 1970s to run on oil.

Mighty River Chief Executive Doug Heffernan says the company hopes to have the coal-fired plant operating by 2008 or 2009, subject to getting resource consents. Heffernan is aware of environmental opposition but stresses: “Trade-offs between environmental, economic and social well being and the cost of providing that generation need to be made.”

He says the first stage of the project will be to prepare an Assessment of Environmental Effects (AEE) report, which will involve consultation with the community and other interested groups. “We’ve already established working relationships with many of these groups and have kept them advised about our plans.”

The Green Party and Greenpeace have both slammed the proposed coal-fired station, with Green leader Jeanette Fitzsimons labelling it “a quick and dirty fix.” National’s Energy Spokesman Roger Sowry has welcomed the proposed plan but fears the RMA process could sink it. “It’s hard to imagine the RMA, as it currently operates, will allow such a project to proceed smoothly and quickly.” In the mid-1980s, a plan to build a 1000MW coal-fired power station at Marsden Point was scuttled by environmentalists.

Energy analyst Geoff Bertram sees another risk for Mighty River in opting for coal, because it doesn’t know what the Govt’s carbon tax will be after 2007. Bertram’s concern is 5 or 10 years down the track, with a carbon tax in place, a coal-fired Marsden B might not look such a good idea and Mighty River may be tempted to come to the Govt looking for a handout, claiming “this was unforeseen.”

Bertram believes the Govt has not set a good precedent by subsidising Genesis Energy’s proposed E3P plant at Huntly and he doesn’t want to see a repeat with Marsden B being bailed out in a few years.  “This isn’t what we set up corporatised generators for. If we’re going to rely on the market, everything has to be above board.”

The Marsden B plant will burn up to 1m tonnes of coal a year – good news for Solid Energy. Spokesman Andy Matheson says the state-owned coal miner is keen to see coal play a greater part in NZ’s power generation after Maui gas runs out.

Last month Mighty River said it was looking at burning wood waste at Marsden Point but rejected this due to “technological limitations.”   

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