Wind farm road work starts
New roadworks are paving the way towards the controversial $169 million Mill Creek wind farm near Wellington.
State-owned Meridian Energy’s 26-turbine Mill Creek project, essentially a northern extension of the existing West Wind wind farm at Makara, should be producing power by the middle of 2014.
When operational, Mill Creek will be generating around 90 per cent of the time, according to Meridian.
The new wind farm is expected to generate on average 235 GWh of electricity a year, enough to supply around 30,000 homes – about the size of the Hutt Valley.
When the project was first announced Meridian estimated it would inject about $45m into the Wellington economy.
The Mill Creek turbines will be 111 metres high, including the blades, the same as the West Wind turbines.
Work has started on a new access road from Porirua to get in the 130 truck loads of turbine equipment for the project, as well as upgrading some of the existing roads near the wind farm.
The project had about 75 fulltime crew in action leading up to the Christmas break. The road work crew will peak at 100 when they move on to the wind farm site and build a new road which should be finished early in 2014. The initial roading works by local companies and subcontractors led by Higgins should cost about $4.5m.
The Mill Creek project was confirmed in the middle of the year even though some analysts and industry experts said New Zealand already had more than enough generation for the medium term given weak economic growth and declines in manufacturing.
Recently Contact Energy chief executive Dennis Barnes said his board would not have approved the project.
But Meridian said the stars aligned for Mill Creek with falling prices for turbines. Meridian has said the project would cost $80 to $85 a megawatt hour, and that with even ‘‘modest’’ demand growth it would be lucrative.
Meridian chief executive Mark Binns said Mill Creek had been looked at for a long time and it added to the company’s diversity of power generation and it would be embedded in the local network.
‘‘We tested it against more conservative demand growth, but it still gave us our cost of capital. We realised it was on the cusp if we had a negative scenario (for power demand), but overall we thought it would be positive for the company,’’ Binns said.
But he admitted the demand outlook for the next five years was flat to slightly declining – ‘‘Nobody knows’’.