MRP was this week awarded the necessary resource consents for construction of the plant by Environment Bay of Plenty, whose independent commissioners heard the company's resource consent application on behalf of Kawerau District Council, Whakatane District Council and themselves.

But MRP chief executive Doug Heffernan said a final decision on whether to proceed with the geothermal station at Kawerau – to be built on industrial land owned by pulp and paper manufacturer Norske Skog Tasman – had not yet been made.

Known for its geysers and volcanoes, New Zealand is rich in geothermal resources.

Geothermal activity, in and around the central North Island's Volcanic Plateau, currently provides about 7%, or 450MW, of the country's total electricity generation capacity.

Late last year, Rotorua geologist Ashley Cody said he believed geothermal power could ultimately provide up to a third of New Zealand's electricity, while former Contact Energy chief executive Steve Barrett said New Zealand could double its geothermal electricity production within a decade.

Contact – which supplies about 66% of all geothermal power from its Wairakei, Ohaaki and Poihipi Road stations – has drilling programs to add another 39MW of generation capacity at several of its fields, including Te Mihi and Ohaaki.

Meanwhile, MRP is planning a new 70-80MW geothermal station at Kawerau, though that could ultimately be upgraded to 300MW or so. MRP is also involved in exploratory drilling near Mangakino to determine whether a station there would be viable.

MRP has existing geothermal stations at Mokai and Rotokawa and a recent 39MW upgrade at Mokai pushed that plant's total capacity to 94MW. MRP is hoping to at least double Rotokawa's capacity to 66MW.

The company's total generation for the six months was down 8%, with hydroelectricity production from the Lake Taupo-Waikato hydro system being the second lowest in the company's history, due to lower than normal inflows. Total generation was 2989 GWh (3244 GWh in the corresponding 2004 period).

But this was partially offset by increased output from its geothermal plants and the natural gas-fired Southdown station in Auckland, according to MRP’s half-yearly report tabled in Parliament. High non-hydro production also helped conserve hydro storage in Lake Taupo, with lake levels currently 65% above normal for this time of year.