MEUG executive director Ralph Matthes said in yesterday’s New Zealand Herald newspaper that more fossil-fuel driven power stations would be needed, and quickly.

Even the biggest windfarm proposed – Meridian Energy’s 210MW West Wind venture near Wellington – would only cover peak demand growth in New Zealand for just over a year.

Additional 'special' thermal stations – such as the government-owned but Contact Energy-operated 155MW Whirinaki distillate plant near Napier – would be needed to supplement electricity supply on windless days.

Matthes said the government had rushed to set up Whirinaki during the tight supply winter of 2003 as it did not think the electricity market could successfully manage future dry-year risks when low levels at hydro-electricity lakes threatened to constrain overall power production.

“Hopefully, the government will not ‘solve’ the problem of having back-up for long periods when the wind doesn't blow by building more Whirinaki power stations," Matthes said.

"That problem should be managed by windfarm developers' either building or contracting sufficient back-up generation.”

Matthes agreed that New Zealand had some of the windiest sites in the world close to power lines and population centres, which made wind power an important mix in the country’s future electricity generation industry.

But wind could not meet all of NZ's power needs and was not a panacea for secure and lowest-possible power prices, he said.

Matthes argued the government had shown a bias in supporting sustainable projects, with the largest subsidy being the recently announced NZ$15 per tonne (of emissions) carbon tax from April 2007, which would cost power consumers about NZ$400 million a year.

The tax, which would raise the cost of thermal power generation, was a "huge win" for wind farm developers, but it would not materially affect overall greenhouse gas emissions as the problem sectors for New Zealand were agriculture and transport, he said.

By tilting the playing field in favour of wind, the government was penalising the otherwise lowest-cost long-term source of power - coal-fired power stations and gas-fired plants using new natural gas discoveries, the MEUG also argued.

The government was granting windfarm developers millions of dollars worth of carbon credits, which could be sold on a fledgling international carbon market, but that represented another form of subsidy.