Company chief executive David Baldwin said the new peaking plant would probably cost about $NZ140 million ($A120 million) and could be operating by 2009.
He said the new “flexible, fast-start” peaking plant was needed to support Contact’s increasingly renewable electricity generation portfolio during peak demand times and periods of low wind or hydroelectricity generation.
The New Zealand Government last week announced a ban on building new baseload fossil fuel-fired power stations over the next 10 years, a move that the Petroleum Exploration and Production Association of New Zealand said could halve the size of the petroleum industry over the next 20 years.
Pepanz executive officer John Pfahlert said the ban would mean a much restricted market for future gas discoveries and lead to a long-term decline of the local oil and gas industry.
But Baldwin said the New Zealand Energy Strategy differentiated between baseload and flexible gas-fired plants – a point confirmed today by a spokesperson for Energy Minister David Parker.
“If it’s not a new baseload fossil fuel plant, but something to ensure security of [electricity] supply, then that is allowed in the NZES,” Jane O’Loughlin told PetroleumNews.net from Wellington.
Baldwin said Contact supported the Government’s drive to have 90% of electricity generated from renewable sources by 2025 and for that reason had further delayed making any decisions on developing the company’s already-consented 400MW Otahuhu C combined cycle gas-fired plant in south Auckland.
He also said the proposed new investment at Stratford was the beginning of a transition to the types of plant New Zealand would need to achieve that 90% renewable target. More modern gas plants would play a major role that renewables could not provide.
The new plant at Stratford would be more efficient than, and would run ahead of, Contact’s aging single-cycle 360MW New Plymouth gas-fired station that has been operating near Port Taranaki for almost 30 years.
“New Plymouth is a slow start station,” Baldwin said. “The new plant will mean New Plymouth will move more to a dry year reserve role.”
Pepanz today welcomed the news that some new gas-fired generation will be allowed.
“Although such small plants will not really expand the size of the New Zealand gas market, onshore explorers, particularly those in Taranaki, may find there are still markets for future small gas discoveries,” Pfahlert said.
Bigger baseload power stations, such as the 367MW Taranaki Combined Cycle plant, use about 20 petajoules of gas a year. The new plant built alongside will use less than 5PJ per year.
In other news, Contact also announced yesterday the planned construction over the next five years of a new wind farm, known as Hauâuru Mâ Raki, or North-West Wind, of up to 650MW, south of Port Waikato and west of Hamilton.
