Of 49 projected wind farms in New Zealand, 41 could be built more cheaply than Meridian Energy's proposed $2 billion Project Hayes solely in terms of generation cost, an Environment Court appeal hearing for the project was told yesterday.
Maniototo Environmental Society witness Toby Stevenson, a consultant director of international economics consultancy group LECG, ranked 49 wind farm developments according to two criteria, to count the economic cost of upgrades and energy-transmission losses.
Mr Stevenson, of Wellington, said if New Zealand's energy was generated solely from wind and if the lowest cost of generation was the sole criterium for selecting preference of wind farm projects, Project Hayes would be built after 41 others.
TrustPower's consented $400 million Mahinerangi wind farm, to be situated about 20km from the proposed 92sq km Project Hayes site, was ranked 16th on the list.
"I accept that some of these projects will not go ahead for a number of reasons, but the point is that a significant number of alternative projects might well be advanced ahead of Project Hayes.
"If I was to conduct this exercise with all of the power projects currently under consideration, Project Hayes may be even less worthwhile from a least-cost generation perspective," Mr Stevenson's written evidence stated.
He told the court the first stage of Project Hayes would be built after 90 other considered power projects, a list of which comprised about 100 developments, if transmission costs alone were taken into account.
When cross-examined by Central Otago District Council lawyer Graeme Todd, Mr Stevenson said some of the 49 wind projects listed had not been consented, and applications for consent had not been lodged for others.
Mr Stevenson said he did not know how many of the 49 projects had been consented, what they would cost to construct, whether they were subject to issues other than proximity to transmission, and what wind resources were like at proposed sites.
During cross-examination by Meridian counsel Andrew Beatson, Mr Stevenson acknowledged such a list was a general attempt to consider scenarios in regard to the economics of New Zealand's future electricity generation.
He agreed the list penalised sites with better wind resources and highly ranked some sites of lesser wind resources, "to some degree".
Commissioner Alex Sutherland asked Mr Stevenson what weight the panel should put on his list.
Mr Stevenson said the list was merely his attempt to put Project Hayes objectively into context in terms of electricity generation and transmission in New Zealand, using information in the public domain.
Mr Stevenson also said he had no faith Meridian would make prudent economic decisions in regard to Project Hayes.
It was his evidence the 176-turbine wind farm was not economically viable, partly because of transmission constraints in the lower South Island, and on that basis he questioned Meridian's decision to proceed with the development.
In his written evidence, Mr Stevenson said if Mahinerangi was operating at its 800GWh maximum, Project Hayes would not be able to generate at all for about one-third of the time, and similarly if Project Hayes was operating at its 2200GWh maximum, other renewable-energy generation would have to back off, probably resulting in the spilling of water at hydro-electricity generators.
Mr Stevenson also said if both Mahinerangi and Project Hayes had a 40% capacity factor, and operated constantly at that level, they would only be able to generate without causing hydro spill for about 3000 out of 8760 hours in a year.
He called the figure "hopelessly optimistic", because neither wind farm could operate at a constant capacity and the transmission grid was restricted.
In response to a question from Mr Beatson, Mr Stevenson said it was possible the estimated loss of generated electricity as a result of Project Hayes would justify a transmission-grid upgrade, to ensure less energy waste in the future.
He also acknowledged there was high storage capacity for hydro at Manapouri and Te Anau for balancing fluctuations in wind generation.
