The Contact quarterly update – released to the NZX yesterday afternoon – said the average wholesale electricity price received by Contact's generation was NZ$72.14 per MWh over the quarter, compared to only NZ$28.77 per MWh for the same 2004 quarter.

While national hydroelectricity lake inflows and storage levels were still high (97% and 98% of mean respectively), Contact chose to ramp up its gas-fired generation to 1,751GWh - 83% higher than for the same 2004 period.

The markedly higher thermal generation levels were in response to the significantly increased average wholesale electricity prices, said Contact.

“This has flow-on implications for the level of wholesale electricity revenue and gas purchase and transmission costs, which were both higher over the period.”

While gas generation surged, hydroelectricity production slumped, falling almost 27% from 1064GWh to 780GWh, reflecting lower inflows into Contact’s main South Island catchment area, the Clutha River region.

Total hydro, gas and geothermal generation, at 2980GWh, was 20% higher than the September 2004 period, reflecting New Zealand’s continued increasing energy usage.

The south Auckland Otahuhu B power station – one of Contact’s two main has-fired plants – was being shut from tomorrow for two months for maintenance work, efficiency upgrades and an expected extra 12MW of capacity.

Contact also reported continuing success with its geothermal exploration program in the central North Island.

Commissioning and performance testing of the Wairakei Binary plant had confirmed the plant's nominal capacity of 16MW, while three of the four production wells at the nearby Te Mihi geothermal field had been successfully drilled, with the first well put into production at approximately 10MW.

The new production well at Tauhara had been successfully drilled which, together with an existing well, would be used to supply about 20MW of direct heat to the nearby Tenon forestry mill. The drilling rig was now moving to nearby Ohaaki to start drilling there.