Renewable energy – mainly hydroelectric power – currently delivers about half of Contact’s annual electricity production.

But the company’s annual general meeting in Auckland yesterday was told that natural gas powered Contact’s profit for fiscal 2005-06, with gas-fired stations pumping out 41% more electricity to cover a significant shortfall in hydroelectricity generation caused by low rainfall.

Contact chief executive David Baldwin said Contact’s gas-fired power stations helped the country through a winter of extremely tight electricity supply, and showed “combined cycle gas turbines are the ideal back-up to New Zealand’s renewable generation base”.

Contact was also focusing on augmenting its renewable energy generation capacity.

Baldwin signalled potential new investment in renewable geothermal generation options, depending on resource consents, of more than half $NZ500 million ($A440 million) over the next decade.

New Zealand is a leader in geothermal power, which has been proven to be capable of delivering reliable and renewable baseload energy with no emissions and a low environmental impact. Unlike wind, solar and hydro generation, it is unaffected by weather.

Baldwin also said Contact was currently doing due diligence on several wind farm sites through its alliance with Investec, which held a number of promising wind farm sites across both the North and South Islands, as well as exploring other opportunities with other wind farm developers.