Another step towards the expansion of the Ngawha power station has been achieved with recent approval of final resource consents.
Top Energy applied for a variation on existing consents which were granted by the Environment Court in February 2016 after it purchased 184 hectares of land adjacent to its Ngawha operations. The final consents were granted in July and will last 35 years.
Chief Executive Russell Shaw says the land offers clear advantages for the running of the power station. "We couldn't ignore the benefits the new block offered".
"The land is located over the highest temperatures in the geothermal field. By relocating our production wells and the two power stations we have enhanced access to the geothermal reservoir, thereby increasing the efficiency of the power station and reducing our construction costs," he says.
Subject to Major Transaction approval Top Energy plans to increase the capacity of the station to 50 MW by 2020 and, subject to geothermal field performance and market conditions, to 75 MW by 2026. Peak demand in the Far North varies from 70MW on a winters evening to 22MW on Christmas Day.
The expansion is the lynchpin in the company's wider strategy to increase the security of the power supply for the people of the Far North. This strategy includes initiatives such as the installation of bio-diesel and diesel-powered generators around the network like the generators installed at Taipa.
Mr Shaw says planning and design for well drilling and station construction are well under way. Construction and engineering contracts are in the process of being awarded with civil works expected to start later this year with a commissioning target of June 2020.
The company will work with the local community to mitigate construction impacts and will operate in partnership with the kaitiaki advisor appointed by the Parahirahi Ngawha Waiariki Ahuwhenua Trust (formerly Parahirahi C1 Trust), as part of the cultural and environmental indicators monitoring programme.
Also, Top Energy has agreed not to cause or contribute to any significant adverse effects on the recreational pools. This will require an independent monitoring programme to monitor fluids reinjected into the reservoir and to ensure reinjection procedures reflect best practice.
While the resource consent process has been complex and protracted, it is not the only hurdle the company has had to overcome to get permission to increase the capacity of the power station.
Mr Shaw explains. "New Zealand's electricity regulatory framework requires distribution companies, such as Top Energy, to establish arms-length' corporate separation between its regulated businesses and generation assets, if they have more than 50MW generation capacity.
"This amount would be exceeded with the expanded operations at Ngawha, coupled with other generation capacity planned on the network."
Mr Shaw says Top Energy applied for an exemption to the Electricity Authority to allow the company to run the expanded power station in house rather than set up a separate generator business to provide the stipulated separation.
A separate generation business would add significantly in costs from the duplication of management positions and directors, preventing the company from taking advantage of being able to share Ngawha's management costs with the network business.
The Electricity Authority has indicated that running an expanded Ngawha geothermal plant in-house is unlikely to cause any competition or market issues. The regulator is calling for comments on its draft decision with submission due before the 8th of August.