of the Resource Management Act 1991 AND

Transcription

1 IN THE MATTER of the Resource Management Act 1991 AND IN THE MATTER of a submission and further submissions by MIGHTY RIVER POWER LIMITED in respect of the PROPOSED WAIKATO REGIONAL POLICY STATEMENT STATEMENT OF EVIDENCE OF FRASER SCOTT WHINERAY

2 1. INTRODUCTION 1.1 My name is Fraser Scott Whineray. I am the General Manager Operations for Mighty River Power Limited ( Mighty River Power or the Company ) and have been with Mighty River Power since October As General Manager Operations I have overall responsibility for Mighty River Power s generation assets (geothermal, thermal, hydro) and their interface with the wholesale electricity market and transmission into the national grid. In terms of the generation assets in the Waikato Region, I have overall responsibility for the management, operation, and maintenance of the Waikato Hydro Scheme and the Company s geothermal assets whether wholly or partly owned (Rotokawa, Nga Awa Purua and Mokai). 1.3 Prior to working for Mighty River Power, I worked for Carter Holt Harvey Limited as Director Operational Improvement. Earlier in my career I have held a number of senior positions in the dairy industry and spent five years with Credit Suisse First Boston in New Zealand and abroad. 1.4 I hold a Bachelor of Chemical and Process Engineering from the University of Canterbury, a Postgraduate Diploma in dairy science and technology from Massey University, and a Master of Business Administration from Cambridge University. I am a member of the Institute of Directors in New Zealand and a non-executive Director of Opus International Consultants. 1.5 I am presenting this statement of evidence on behalf of Mighty River Power 1.6 The purpose of my evidence is to introduce Mighty River Power and to provide context to its submissions and evidence to the Waikato Regional Council's Proposed Regional Policy Statement (Proposed RPS). 1.7 Specifically, in my evidence I will: (a) (b) (c) provide a brief overview of Mighty River Power; describe the scale of the electricity generation activities undertaken by Mighty River Power in the Waikato Region; illustrate the importance of electricity to society and the value placed on a Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 2

3 reliable supply of electricity; (d) (e) (f) describe the utilisation of renewable energy resources for electricity generation in the region; explain how the Waikato Hydro Scheme has shaped the Waikato River valley as we know it today; and outline the history and the role that the Waikato Hydro Scheme and the geothermal power stations have played in the Waikato regional community and economy and for the country as a whole. 2. MIGHTY RIVER POWER LIMITED 2.1 Mighty River Power is a State-Owned Enterprise and has the statutory objective of being a successful business that exercises corporate responsibility 1 and leadership in sustainable management and in the utilisation of natural, physical and renewable resources Mighty River Power is the fourth largest electricity generator in New Zealand and the third largest retailer (based on customer numbers), selling electricity through its retail business Mercury Energy. As a major electricity generator, Mighty River Power has an important role in providing a sustainable and secure energy supply to its customers. This is achieved through a diverse and expanding portfolio of generation assets throughout the North Island which in 2011 produced 6,833 giga watt hours (GWh), representing approximately 17.5% of New Zealand s current electricity needs. 3 During the 2011 financial year the Company generated 96% of its electricity from renewable hydro and geothermal resources, 4 with most of this generation located in the Waikato Region. 2.3 Mighty River Power is a significant participant in New Zealand s electricity sector. It has an expanding portfolio of generation assets, with the Waikato Hydro Scheme representing the majority of its generation production. There has been steady growth in its geothermal capacity which now represents 1 Section 4, State Owned Enterprise Act Mighty River Power Statement of Corporate Intent. 3 Mighty River Power Limited Annual Report 2011, p18. 4 Ibid, p2. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 3

4 approximately 30 percent of the company s generation capacity. The Company s generation assets play pivotal roles in terms of both contributing to meeting national electricity demand and to maintaining the security of supply. 2.4 Mighty River Power s generation assets encompass hydro, geothermal and thermal (gas) power stations as follows: Renewable Electricity Generation Assets (a) (b) (c) (d) (e) The Waikato Hydro Scheme has eight dams and nine power stations (with a total of thirty-nine generating units) with a total rated dependable capacity of approximately 1048 megawatts. Lake Taupo storage is an integral part of the scheme. There is a 34 MW wholly owned geothermal power station at Rotokawa near Taupo and a 140 MW geothermal power station also located at Rotokawa and named Nga Awa Purua which is 75% owned by Mighty River Power and 25% owned by Tauhara North No 2 Trust. It was opened in May A 25% shareholding in the geothermal power station at Mokai near Taupo. The Tuaropaki Trust has the remaining 75% ownership of the plant and Mighty River Power also operates the station. A 106MW wholly owned geothermal power station at Kawerau. Exploration geothermal wells have been drilled at Ngatamariki and the Company has obtained resource consents and is building a further 80 MW geothermal development on the Ngatamariki geothermal field. 2.5 In addition, the Company has obtained consents for a wind energy project for the Turitea wind farm on the Tararua Ranges, Palmerston North and is about to commence consent hearings for a proposed wind farm at Puketoi in the Manawatu-Wanganui region. 2.6 Together, Mighty River Power s Waikato Hydro Scheme and geothermal power stations can generate on average 6,200 GWh of electricity each year or about 16% of the country s required electricity at current demand levels. For the period July 1992 to June 2009 annual generation from the Waikato Hydro Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 4

5 Scheme averaged 4,000GWh. 5 This is all renewable energy supporting the Government s target of 90% renewable generation by 2025 as outlined in the Government s New Zealand Energy Strategy Thermal Generation Assets 2.7 Mighty River Power s non-renewable generation portfolio consists of a 175 MW gas fired cogeneration plant at Southdown, Auckland. 2.8 Figure 1 below shows the location of each of Mighty River Power s generation assets as well as the site of the Company s current geothermal development project at Ngatamariki. Figure 1 Location of Mighty River Power s Generation Assets and Future Geothermal Development Site 5 Mighty River Power Limited Annual Report 2011, p19. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 5

6 3. THE IMPORTANCE OF ELECTRICITY 3.1 Electricity is an essential non-substitutable commodity in any modern economy. New Zealand s economic and social wellbeing are inextricably dependent on a secure and cost effective electricity supply system. This is also the case in every other developed country. 3.2 The remote geographic location of New Zealand results in the need for the electricity system to be self reliant and the methods of generation to be diverse and stable. It is not economically or technically viable to source electricity from other countries. 3.3 There are substitute products for some uses (for example gas for heating and cooking) but for many others (for example home appliances and industrial machinery) there is no practical alternative to electricity. The vast majority of economic activity is dependent on an adequate supply of domestically produced electricity. 3.4 Historically New Zealanders have benefited from relatively low electricity prices due to the dominance of low variable cost hydro generation and the abundance of cheap natural gas (primarily from the now depleting Maui gas field) to run various thermal plants. 3.5 New Zealand has a substantial renewable hydro-electricity generation base 6 upon which it relies for solid support to the electricity system thereby underpinning our primary sector industries and at the same time delivering environmental benefits. 3.6 The Waikato region is rich in energy resources with major resources in hydro, geothermal and coal. The region is the country s premier electricity province with almost 40% of installed generation capacity and the potential to generate up to 50% of New Zealand s total electricity when required. Energy is a master resource a fundamental driver of economic prosperity, both within the Waikato region and around the world. 7 6 The Ministry for Economic Development recorded in September 2011 that hydro met 53.3% of the national demand for electricity and geothermal 12.2% 7 Waikato Regional Energy Forum Waikato Regional Energy Strategy, p5. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 6

7 3.7 So the Waikato Hydro Scheme plays a fundamental role in ensuring security of supply for the region and nation as well as shaping the contribution electricity makes to the regional economy. 4. SECURITY OF ELECTRICITY SUPPLY 4.1 Security of electricity supply is crucial when considering the current and future status of the electricity market and can be grouped into the following: (a) (b) (c) Generation capacity - Ensuring generation capacity satisfies current and future electricity demand. Diversity of supply - Ensuring an appropriate balance of generation capacity across fuel options in order to operate an economically efficient electricity system. Diversity reduces exposure to energy supply disruptions or price shocks that are associated with fossil fuels. Reliability of supply - Ensuring consistent and secure access to various fuel types water, gas, geothermal fluids and coal. Ability to store fuel is important in this regard to cover risks from fluctuations in fuel supply and electricity demand. 4.2 Security of supply will be maintained in New Zealand by ensuring; all available plant is operational, maintaining a sufficient pipeline of new generation to meet future demand, and to replace retired plant that has become uneconomic or technologically obsolete (e.g. Marsden B Power Station at Marsden Point, Whangarei). In this way the generation profile remains diverse with a mix of renewable and thermal plant to react to climatic and economic conditions. 4.3 Like all equipment, turbines and generators have downtime, both planned maintenance and unplanned outages, which must be undertaken with consideration of other generating plants and transmission infrastructure throughout the country for national system security to be maintained. 4.4 The Waikato Region is strategically located adjacent to New Zealand s highest electricity demand centres and where much of the country s electricity demand growth is anticipated. Central North Island geothermal and hydro generation is well placed to supply these demand centres with the added benefit of reduced Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 7

8 transmission losses and risks and enhanced supply security. Geothermal energy provides reliable baseload generation as it is not weather dependent. As well, the inherent capacity of hydro to start or stop producing energy within minutes further strengthens the importance of its location close to demand centres with fluctuating load profiles and the ability to cover other large plant failures and/or failures in power or gas transmission. Lake Taupo is the only significant hydro storage reservoir in the North Island. 4.5 The importance of Lake Taupo and the Waikato Hydro System to national security of supply was particularly demonstrated during early 2008 and In 2008 outages in the Cook Strait cable and thermal power stations 8 around the country meant that generation from the Waikato Hydro Scheme responded to national demand, during a period of drought. The additional use of the water from Lake Taupo coupled with low in-flows combined to bring the lake to near minimum operating range. Once Waikato Hydro Scheme storage fell to low levels, national demand had to be satisfied from thermal generation. A similar situation has arisen this year given low inflow into South Island Hydro lakes resulting in a greater reliance on North Island hydro and thermal generation. 4.6 It is essential to the provision of a secure supply of electricity for the New Zealand economy that all generation, particularly our hydro resources, remain available, not only because this provides one of the least cost methods of generating electricity, but because it reduces the need to burn fossil fuels which result in much higher national carbon emissions. 5. THE WAIKATO HYDRO SCHEME 5.1 At 425 km, the Waikato River is the longest river in New Zealand with a large and natural catchment area of approximately 14,443km². The catchment of the Waikato Hydro Scheme includes the diversions associated with the Tongariro Power Scheme, which adds another 654km 2 to the overall Waikato catchment and increases the Waikato River flow by approximately 19%, at the Taupo Control Gates. 9 8 Such as coal, gas and oil fired generation plants. 9 Evidence of Dr Ross Woods for the Waikato Regional Council to the Environment Court Hearing on Variation 6 Water Allocation to the operative Waikato Regional Plan. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 8

9 5.2 The Waikato River flows from an elevation of 357 m at the Lake Taupo Control Gates to 22 m at the base of Karapiro Power Station, a difference of 335 m over a distance of 186 km or a falling average gradient of just over 0.2%. Between Hamilton and the outlet of Port Waikato, the average gradient is 0.01% (one metre fall in each 10,000 metres). This is illustrated in Figure 2 below which shows the profile of the Waikato River between Lake Taupo, to Karapiro and Port Waikato. Figure 2 Waikato Hydro Scheme Long Section 5.3 The damming of the Waikato River in various locations has provided some control over the discharge from Lake Taupo and formed eight long, narrow reservoirs in each of the flooded river valleys, although the upper part of the river between Lake Taupo and Lake Ohakuri remains largely riverine. For all power stations between Ohakuri and Karapiro the tailrace of the upstream dam is the headwaters of the downstream reservoir, and as a result there are no riverine sections left in that portion of the river, as shown in Figure 2 above. 5.4 I will now describe the scale of the infrastructure that makes up the Waikato Hydro Scheme running from Lake Taupo down to the Karapiro Dam. : (a) The Taupo Gates structure is made up of six vertical concrete gates each able to be operated independently of each other. The gates are controlled Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 9

10 remotely from Mighty River Power s Hamilton office as are all hydraulic gates and generators for the power stations which make up the Scheme. The lifting mechanisms for the gates are located in the median strip under State Highway 1 which passes over the gates structure (as shown below). There is also an historic wooden building which houses control and automation equipment as well as an emergency generator. Taupo Control Gates, Taupo, New Zealand; Mighty River Power Image Library (b) Aratiatia is the first power station in the Scheme downstream of Taupo Gates and was constructed between 1959 and At the power station, water is passed through a tunnel and then into a surge tank. The surge tank has the ability to hold eighteen million litres of water. From the tank, three steel penstocks move the water to the three turbines which then drive generators to produce electricity. Due to the small reservoir storage capacity at Aratiatia, water is only stored for a short period of time before it is released. There are also timed releases to enable tourists to view the Aratiatia Rapids, regarded as one of the Waikato River s outstanding scenic features attracting over 60,000 visitors per year. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 10

11 Aratiatia Rapids, Taupo, New Zealand; Mighty River Power Image Library Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 11

12 (c) Ohakuri is an earth dam with concrete gravity sections for the intake and spill structures. Built between 1956 and 1961, the power station is located below the dam and contains four turbines which move water to the generators to produce electricity. Ohakuri Dam and Power Station, Ohakuri, New Zealand; Mighty River Power Image Library (d) Atiamuri was the fifth dam to be built in the Waikato Hydro Scheme between 1953 and The dam has both concrete and earth gravity sections with four steel penstocks being used to move water from the dam to the turbines. The concrete section of the dam comprises about 118,000 cubic metres of concrete and the earth dam section comprises about 312,000 cubic metres of material. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 12

13 Atiamuri Power Station, Atiamuri, New Zealand; Mighty River Power Image Library (e) The Whakamaru dam and power station was constructed between 1949 and Whakamaru is a concrete and earth gravity dam which relies on its bulk to hold back the water behind it. The dam comprises 270,000 cubic metres of concrete, 1000 tonnes of reinforcing steel and about 69,000 cubic metres of spoil which makes up the earth dam. The power house is located directly below the dam and is fed water by four steel penstocks which take the water to the turbines. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 13

14 Whakamaru Dam and Power Station, Whakamaru, New Zealand; Mighty River Power Image Library (f) Maraetai has two power stations. Operationally these stations are regarded as a single unit. The concrete arch dam spans the Waikato River gorge and has the Maraetai I power station (constructed between 1946 and 1953) located directly below it. This power station goes across the entire length of the dam with five intake gates being located below the surface water to allow water through the steel penstocks and into the turbines. A long canal directs water from Lake Maraetai to Maraetai II power station (constructed between 1959 and 1961) which is located half a kilometre from the first power station on the left river bank. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 14

15 Maraetai Dam and Power Stations, Maraetai, New Zealand; Mighty River Power Image Library (g) Waipapa was the sixth dam built in the Waikato Hydro Scheme (between 1955 and 1961) and is made up of an earth gravity dam. The dam has three concrete penstocks incorporated in it which moves the water into the powerhouse and turbines before discharging the water back into the Waikato River. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 15

16 Waipapa Power Station, Waipapa, New Zealand; Mighty River Power Image Library (h) The Arapuni power station was the first government built and oldest hydroelectric station on the Waikato River. The power house and swing bridge are protected under the Historic Places Act The power house is made of reinforced concrete and is home to eight generators. The Arapuni dam is a concrete gravity arch dam which diverts the Waikato River through eight steel penstocks into the power station which are located at the base of the gorge. A road runs across the dam structure. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 16

17 Arapuni Dam and Power Station, Arapuni, New Zealand; Mighty River Power Image Library Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 17

18 (i) Karapiro was the second dam to be built on the Waikato River between 1940 and 1947 and is the last dam and power station in the Waikato Hydro Scheme. The dam is a concrete arch dam which has a single lane, public road on top. The power station is located below the dam on the right hand side. There are three steel penstocks which convey the water from Lake Karapiro to the turbines in the power station. The building of the dam created Lake Karapiro which is a world renowned rowing venue and is used for a variety of other recreational uses such as waka ama and power boats. Karapiro Dam and Power Station, Karapiro, New Zealand; Mighty River Power Image Library In 1992, the trapping and transferring of young eels (elvers) commenced at Karapiro Dam because this was the furthest upstream eels in the Waikato River were able to reach following construction of the Waikato Hydro Scheme. The program enables eels to be transferred into all the hydro lakes except Aratiatia and has created a sustainable commercial and customary fishery. In addition, Mighty River Power is voluntarily undertaking a downstream eel migration research project at Karapiro Dam. This project aims to provide a means for safe migration for adult eels from Lake Karapiro into the lower Waikato River. The challenge to find a practical solution to the Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 18

19 issue of allowing downstream migrating eels past Hydro dams is an international one. 5.2 The details of the Waikato Hydro Scheme are set out in Table 1 below, which illustrates the benefits of the significant change in storage capacity for the Waikato Hydro Scheme with the addition of the Taupo Control Gates. Lake Taupo working storage is 855 million m 3 compared to total river storage capacity of approximately 71 million m 3, which equates to 92% and 8% respectively. 5.3 I note that although the operating storage capacity of the system may seem large, the storage range of 1.4 metres is small relative to the inflows and outflows from Lake Taupo which means the storage volume of Lake Taupo turns over every 4.3 weeks on average. To explain this another way, storage is very limited relative to the power generation output of the hydro scheme. Almost all of the water that passes through the system is used for generation to meet New Zealand s electricity demand. Table 1 - Waikato Hydro Scheme Information Taupo Gates Aratiatia Ohakuri Atiamuri Whakamaru Maraetai Waipapa Arapuni Karapiro Total Commissioned No No Generation units None 3x31MW 4x28MW 4x21MW 4x25MW 10x36MW 3x18MW 4x21MW 4x21.6MW 3x36MW GWh per year N/A ,002 Operating storage capacity* million m 3 Dependable Capacity (2011) ,048 Replacement Value 2011 in NZ$ million No No *Based on normal operating ranges , The water flow and generation output of the Waikato Hydro Scheme is augmented by the Tongariro Power Scheme, which uses diverted and natural catchment water flows to generate up to 360 MW and the diversion water then provides an additional 30m 3 /s to be used down the Waikato Hydro Scheme. 10 Excluding Taupo. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 19

20 5.5 The Waikato Hydro Scheme infrastructure has largely been in place for over 70 years and is now embedded in the natural landscape providing a range of ecological, social and economic benefits to the region and the country. The basic infrastructure has a long life expectancy and has had significant financial investment put into it to keep it operating safely and to enhance efficiency. That investment is planned to continue over the next decade at a cost of about $500m. 5.6 Associated with the dams and power stations are settlements that were established during construction and became permanent towns to accommodate operational staff for the Scheme. Some of these villages remain (such as Whakamaru, Mangakino, Atiamuri and Wairakei) and function as local lakeside communities and some have become well known as tourist attractions and sporting venues (such as Karapiro). Other towns, such as Waipapa and Maraetai no longer exist. Operation of the stations which make up the Waikato Hydro Scheme is now carried out using telecommunication networks from the Hamilton or Auckland office Control centres 5.7 Table 2 below shows the surface area, total volume and storage volume of Lake Taupo and the Waikato Hydro Lakes. These figures are based on 2001 operating levels. The lakes, with the exception of Lake Taupo, have been created through the Waikato Hydro Scheme. Each of the Waikato Hydro Scheme s eight dams has resulted in the establishment of lake environments which have become integrated into the ecology of the catchments and which today support a wide range of recreational activities and commercial enterprises. The reservoirs, dams and powerhouses have become an accepted part of the landscape associated with the river and the activities that occur on and around it. Table 2 Information concerning Lake Taupo and the Waikato Hydro Lakes 11 Lake Area (km 2 ) Lake Area (km 2 ) Taupo 611 Maraetai 4.1 Aratiatia 0.6 Waipapa 1.5 Ohakuri 13.7 Arapuni 9.4 Atiamuri 2.4 Karapiro 7.6 Whakamaru Mighty River Power (2001) Taupo Waikato Resource Consents Application and Assessment of Environmental Effects. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 20

21 5.8 The construction of the dams and lakes has extended access to the river for the surrounding communities which have heightened the amenity value of the Region for activities such as boating, fishing, hunting, tramping, rowing and other sporting and recreational activities. The wetland habitats that are now established at the lake margins are of great biodiversity benefit to the river and surrounding areas. Such values can be maintained because use of the water for generation does not typically peak at low flow times of the year unlike other uses such as summer pasture irrigation. 5.9 In my view it is very unlikely that the removal of the Waikato Hydro Scheme would be justified within the next century as to do so would: (c) (d) (e) negatively impact on the reliability of electricity supply for both the Waikato Region and the nation as a whole; drastically alter the environment which has grown both within and on the margins of the Waikato River; negate the significant investment that has occurred and continues to occur to ensure the safe and efficient operation of the Waikato Hydro Scheme. 6. THE HISTORY OF THE WAIKATO HYDRO SCHEME 6.1 The hydro potential of the Waikato River was recognised in the early 1900s, and plans were drawn up from about 1935 onward for the development of the river for hydro-electricity generation. 12 This development was undertaken by the Governments of the day to meet the economic and social needs of a growing, increasingly electricity dependent society particularly in the years immediately following World War Two. 6.2 Leading up to World War Two there were considerable electricity shortages experienced throughout New Zealand, as demand grew due to a number of factors including expansion in the dairy industry and the introduction of electric milking machines, and the intensification of general commercial and residential electricity use. 12 Martin J E (Ed.) (1998) People, Politics and Power Stations - Electric Power Generation in NZ (2nd Edition) (Electricity Corporation of New Zealand, Wellington). Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 21

22 Powerhouse camouflage during World War II, Photo 5933; Mighty River Power Archives 6.3 The first power station on the Waikato River was the privately built Horahora Power Station, (commissioned in 1913), with a capacity to generate 6.3 MW, to supply electricity to the gold mining activities in Waihi. The picture below illustrates what this reach of the Waikato River looked like before the Horahora dam was built. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 22

23 24 August 1905; Sir George Grey Special Collections, Auckland Libraries, AWNS The project was a run of river generator with no controllable storage. By 1925 it had been taken over by the Government and expanded to a total output of 10.3 MW. However with population growth and the developing economy demanding more electricity, a larger scale development and better utilisation of the hydro potential on the Waikato River was required. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 23

24 Karapiro Dam with Lake Karapiro behind and Karapiro Village to the left, Karapiro, New Zealand; Mighty River Power Image Library 6.5 The Waikato Hydro Scheme that we see today is operated in a closely integrated manner to maximise the value, in terms of electricity generation, to be gained from the available fall between Taupo and Cambridge. 6.6 One of the key components of the operation of the Waikato Hydro Scheme is the existence of the Taupo Control Gates commissioned in In constructing the Taupo Control Gates a new channel was cut for the river and the gates structure installed. This channel and gates arrangement has a hydraulic capacity of approximately 300m 3 /s, depending on the level of Lake Taupo, which is significantly greater than the natural channel maximum flow rate of some 200 m 3 /s. This has resulted in a much greater degree of flexibility for the whole Waikato Hydro Scheme than would have been possible had the natural outlet for Lake Taupo been retained. This increased outlet volume also helps to mitigate the impacts of naturally occurring high flow events. Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 24

25 6.7 The role of the Waikato Hydro Scheme in meeting New Zealand s electricity demands has varied over time. Up until the late 1950s the Scheme was responsible for most power generation in the North Island, providing a mix of base load and peak generation depending on consumer demand. As thermal capacity was added and the Cook Strait cable installed the role of the Waikato Hydro Scheme changed to less of a base load characteristic and to an increased peaking and load responding role to meet increasing demand. The output of the Scheme has been dominated by catchment inflows and by the availability of water in storage (principally Lake Taupo). 6.8 The roles played by the Waikato Hydro Scheme in the past illustrate the flexibility of the Scheme to adapt to a range of future roles within the electricity market dependent upon the generation mix of the day. The Scheme has been used to complement the generation mix by utilising the storage available and the responsive generation capacity for both long time periods resulting from mismatched demand and capacity or over short time periods to respond to various constraints in the overall system capacity. 7. GEOTHERMAL ELECTRICITY GENERATION 7.1 As previously noted, Mighty River Power either wholly owns, or owns in conjunction with Maori Land Trusts, and operates a number of geothermal power stations in the Waikato region. The Company generally supports the geothermal provisions outlined in Chapter 9 of the Proposed Regional Policy Statement as they promote the sustainable utilisation of the Regional Geothermal Resource in an appropriate way. 7.2 I will now provide an outline of the existing geothermal power stations which utilise the renewable energy resources of the Rotokawa and Mokai Development Geothermal Systems, and an overview of the construction work being undertaken on the Ngatamariki Development Geothermal System. Rotokawa and Nga Awa Purua 7.3 The Rotokawa geothermal system is located about 14 km northeast of Taupo and 9 km east of Wairakei. The associated thermal area has a number of geothermal surface features. The energy potential of the Rotokawa geothermal Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 25

26 system was recognised in the early 1950s and drilling has identified a large high-temperature resource of about 18 km 2 with an energy potential assessed as 300 MW. 7.4 Geothermal energy production is from wells drilled to a depth of around 2.0 to 2.5 km, with temperatures up to 320 C, and fluid is reinjected in separate wells at depths of 2.5 to 3.1 km. Some 33 wells have been drilled at Rotokawa and currently 12 are operating as production wells and 8 as injection wells. 13 Production wells are located outside of the power station enclosure, with steam gathering systems conveying two phase fluids to the power stations. 7.5 A 25 MW power station was commissioned at Rotokawa in 1997 and subsequently expanded to 34 MW in Annual generation is about 270 GWh which provides electricity for up to 35,000 residential homes. 7.6 Nga Awa Purua power station is New Zealand's second largest geothermal power station and is also located in the Rotokawa Geothermal Field. Nga Awa Purua has three stages of steam separation and is therefore referred to as a triple flash plant. At the time of installation, Nga Awa Purua, at an approximate nominal 140MW net output, had the largest single shaft geothermal turbine of any flash plant in the world. 7.7 The power station is a joint venture between Mighty River Power (75%) and the Tauhara North No 2 Trust (25%). The $430 million project first generated electricity on 18 January 2010, and was officially opened by Prime Minister John Key on 15 May It provides electricity for up to 140,000 residential homes (which is greater than the number of homes in the urban areas of both Napier and Hastings with some electricity left over). 7.8 The combined dependable capacity of the Nga Awa Purua and Rotokawa power stations is 173MW. Power is transmitted from the Rotokawa power station to a 33kV line connecting to the Trust Power network at the Centennial Drive substation. The Rotokawa station is also connected to the Transpower substation located adjacent to the Nga Awa Purua power station providing a connection from both power stations to the National Grid 220kV lines. Work is 13 Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 26

27 currently underway to construct the Nga Tamariki power station switch yard in this location also. Nga Awa Pura, Taupo; Mighty River Power Image Library Mokai 7.9 The Mokai power station was commissioned in 2000 and is located on the Mokai geothermal field, 30km northwest of Taupo. The power station was the first in New Zealand to be fully owned by a Maori trust (the Tuaropaki Trust which subsequently placed its assets in the Tuaropaki Power Company). Mighty River Power is contracted to operate and maintain the geothermal power station which had an initial installed capacity of 56 MW Mighty River Power holds a 25% share in Tuaropaki Power Company. A 39 MW expansion of similar design was commissioned in A further 17 MW binary plant extension was installed at the station in 2007 to take account of the changing steam/water ratios from production wells to bring the plant to a Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 27

28 dependable capacity 113MW output. Annual generation is about 930 GWh and provides electricity for up to 110,000 residential homes. Ngatamariki 7.11 Ngatamariki is a proposed geothermal power station being developed by Mighty River Power in conjunction with Tauhara North No.2 Trust. It is located approximately 17 km north east of Taupo and is expected to cost $466 million and is currently under construction. To date 11 wells have been drilled on the system. It has a planned capacity of 82MW and is expected to be completed by mid Ngatamariki under construction, Taupo; Mighty River Power Image Library Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 28

29 8. SUMMARY AND CONCLUSION 8.1 Electricity is an essential non-substitutable commodity. 8.2 New Zealand s economic and social wellbeing are inextricably dependent on a reliable and secure supply of electricity. 8.3 Generation assets located in the central North Island are strategically located to meet existing and future demand in the upper North Island where population and economic activity is greatest. 8.4 Geothermal and hydro generation operated by Mighty River Power contributes on average 6200 GWh or electricity supply annually representing 16% of the Country s requirements making an on-going contribution to the national target of 90% renewable generation by Geothermal generation is reliable baseload generation while hydro is particularly flexible and adaptable to changing supply and demand conditions. 8.6 Power development in the Waikato Region has played a foundational role in the establishment of communities and regional economy. Hydro reservoirs in particular provide nationally recognised amenities including recreation and sporting activities. 8.7 It is unrealistic to formulate policy for the Waikato Catchment without broad recognition of the Waikato Hydro Scheme. I have described the scale of the infrastructure involved and the way in which the scheme shapes the water bodies and landscapes that now form the Waikato Valley as it is known today. Fraser Whineray 19 March 2012 Evidence of Fraser Whineray for the Proposed Waikato RPS Hearings Page 29