New Zealand has opened a new renewable power plant, Mighty River Power’s Ngatamariki Geothermal Power Station, located on the country’s North Island.
Mighty River Power Chair, Joan Withers, described the new Ngatamariki Geothermal Power Station – the largest of its type in the world – as “a significant strategic milestone for the Company and very good news for New Zealand”.
Mrs Withers said geothermal projects were inherently complex, and capital intensive and required high levels of commitment, capability and partnership from everyone involved.
“We invested in building relationships with our partners on this resource over more than a decade and $75 million in exploration before we knew we had a project. Our commitment of nearly half a billion dollars of capital to this project was only confirmed after satisfying ourselves on each of these fronts – and the long-term sustainability of the resource and returns to our investors.”
She said Mighty River Power’s total investment of more than $1.4 billion, and the successful completion of three major geothermal projects since 2008, was enabled by the strong cash flows from the Company’s Waikato Hydro assets.
“These cash flows have been fundamental to this investment in reliable, renewable geothermal. We have made this investment in the expectation that our low-cost renewables production will drive improved profitability as we gain generation market share – by displacing our competitors’ higher cost fossil fuel production – to deliver a reasonable return on investment for our shareholders, and benefits for all New Zealanders.”
Mighty River Power Chief Executive, Doug Heffernan, said: “Ngatamariki simply would not have happened without the underlying profits which have come from our Waikato Hydro assets.”
Dr Heffernan said with the addition of Ngatamariki, Mighty River Power now operated five geothermal plants that annually generate about 10% of New Zealand’s total electricity – equivalent to the generation of the Company’s nine stations in the Waikato Hydro System.
He said the Company’s geothermal investment, funded entirely from the Company’s cash flow and balance sheet, had diversified and strengthened Mighty River Power’s production base – with more than 40% of annual generation sales now coming for geothermal.
“This reliability of geothermal, as a major component of our portfolio, is a distinctive competitive strength for us in the New Zealand electricity market.” As the ‘premium’ renewable – operating 24/7 and not dependent on the weather – Dr Heffernan said geothermal generation also “delivers reliable, renewable energy for New Zealand’s long-term benefit.”
He said the Ngatamariki project was part of an important renaissance for geothermal led by Mighty River Power, which has seen considerable investment in high capital cost plant with low operating costs that is displacing more expensive fossil fuel generation – with Mighty River Power’s annual geothermal generation saving the country more than 3 million tonnes of carbon emissions every year, by displacing coal-fired generation.
“In step with our major investment in new power stations and growth in generation market share, we’ve also grown our retail sales market share from 18% to 22% of total demand (excluding demand from the Tiwai Smelter) over the past five years, demonstrating customers exercising preference for Mighty River Power brands such as Mercury Energy and Tiny Mighty Power.
“I am very proud of Mighty River Power’s role in leading this geothermal renaissance. For many years, Geothermal was a sleeping giant, a bit of a secret in New Zealand – and now it’s the envy of much of the world for the reliability it brings, and its contribution in taking carbon out of the economy, and the environment.”
Dr Heffernan said the recent announcement of the withdrawal from production of a second coal-fired unit at the Huntly station was evidence of the benefits of a highly-competitive generation market, and the positive change that geothermal was driving in New Zealand’s energy mix.
More information can be found at the Mighty River Power website.