Energy Minister Pete Hodgson said the government was helping ensure the economic viability of the proposed Meridian Energy and TrustPower schemes by allocating climate change "carbon credits" to the proposed farms.

TrustPower is proposing a 36MW extension of its existing 32MW Tararua wind farm, near Palmerston North, to be completed by 2004; while Meridian plans to commission a new 40-80MW wind farm by 2005. Meridian spokesman Alan Seay told EnergyReview.Net that his company had not yet finalised a site for its wind farm as it was still evaluating a number of places in the North and South Islands.

Mr Hodgson said these two projects would roughly triple New Zealand's current wind generation capacity of just under 40MW.

"This is a way for the government to support the development of renewable energy by making use of the opportunities created by the Kyoto Protocol," the minister added.

The New Zealand government plans to use some of New Zealand's carbon credits to recognise the climate change benefits of new renewable energy sources and a Projects Mechanism to enable this is being developed and will be trialled later this year.

Mr Hodgson said electricity from these wind farms would avoid some gas or coal-fired generation, with its associated greenhouse gas emissions, "but the initial costs mean that the wind farms would probably not proceed without the credits the Government is offering."Providing the credits therefore helps us meet both our climate change and our energy security objectives."

He said that over the Protocol's first commitment period, of 2008-2012, the wind farms could deliver emissions reductions of up to 1 million tonnes of carbon dioxide.