Coal is a cheaper investment than wind for electricity generators, even when taking costs of carbon into account, an Environment Court appeal hearing for Meridian Energy's proposed $2 billion Project Hayes wind farm was told yesterday.
Appellant Roch Sullivan called witness Bryan Leyland, a power-industry consultant from Auckland, to give evidence on the economics of energy generation in New Zealand.
Mr Leyland said given the decreasing cost of carbon per tonne, it would be cheaper for an electricity generator to invest in coal and pay for carbon credits than it would be to invest in wind and receive credit from offsetting carbon.
"At the moment, carbon per tonne is about $25, and the price is still going down. The best thing for New Zealand generators would be to pay up and shut up.
"Carbon would need to worth between about $60 and $80 per tonne for wind-energy generators to break even," he said.
Mr Leyland also said New Zealand's reliance on wind-generated electricity would increase problems associated with dry-year risk, as wind did not typically blow during winter months when electricity demand was at its highest and hydro-lake levels were low.
