Wellington-headquartered Contact, which is 51.4% owned by Origin Energy, said on Friday it believed it could defer decisions on new gas-fired generation for up to 18 months, given government support for Contact’s proposed NZ$2 billion program of new geothermal and wind schemes.

Company chief executive David Baldwin said he believed the government’s goal of meeting the bulk of New Zealand’s energy growth from renewable forms of energy could be realised with government support for the consenting of the renewables projects, which would be needed by about 2012.

But he remained convinced that the Otahuhu C combined-cycle gas turbine power station in south Auckland was still New Zealand’s best fossil-fuelled generation option.

Baldwin said while growth in electricity demand could be met through renewable generation in the short-to-medium term, New Zealand had to ensure its current gas-fired generation fleet was modern and efficient so that it produced minimal emissions and could handle peak demands.

Just four months ago, Contact said it was firming up plans to build the NZ$300-400 million (A$266-356 million) Otahuhu C power station and moving to let tenders for the construction of the 350MW-plus plant.

But since then the government has released its national energy strategy, announcing a preference that all new electricity generation be from renewable sources and warning that any new gas or coal-fired stations could attract carbon charges.

Baldwin said that if the government was committed to the renewables path, Contact would be looking for it to finalise a market-based pricing system for carbon emissions before the company made any final decisions regarding Otahuhu C.