New Zealand-based energy company Contact Energy will continue construction of the 150 MW Tauhara geothermal power project with construction set to begin.
As part of the release of interim financial results for the six months to 31 December 2020, New Zealand-based energy company Contact Energy announced it would continue the Tauhara geothermal project.
The Contact Board confirmed that the company will continue development of a new NZ $ 580 million (approximately USD 418 million) geothermal power plant at the Tauhara field, near Taupo.
In June 2020, the company has signed EPC contracts with Sumitomo and Fuji Electric for the construction of the plant, but with the attractive closure of the important aluminum smelter in New Zealand, things had become somewhat unclear until recently. With a planned power generation capacity of 150 MW, this will be a significant boost to New Zealand’s geothermal sector and the role it plays in the country’s total energy mix. Japanese engineering, procurement and construction contractor Sumitomo Corporation is leading the way, working with New Zealand construction companies Naylor Love and Fuji Electric as turbine suppliers.
Chairman Contact Rob McDonald said: “We are delighted that current market conditions allow us to continue this important development for New Zealand – which has been in the planning stages for more than a decade.
“We believe the Tauhara geothermal project is New Zealand’s best low-carbon renewable electricity opportunity. It will operate 24/7, is weather independent and is ideal to replace base-load fossil fuel generation from a national grid that would significantly reduce New Zealand’s carbon emissions. “
Construction will begin soon and is expected to be completed by mid-2023. Japanese construction, procurement and engineering contractor Sumitomo Corporation is leading the construction, working with New Zealand construction firms Naylor Love and Fuji Electric.
Mr Fuge said the investment in Tauhara was a significant commitment in line with Contact’s vision to build a better New Zealand. “It’s great to be able to move into the growth and development phase. We have an amazing team from inside and outside of Contact who will ensure the building of a world-class power plant that everyone can be proud of.
“Continuing Tauhara is also the next chapter in our longstanding commitment to the central part of the North Island and is expected to make an important contribution to the post-COVID19 economic recovery in the region.”
Beyond these economic benefits, Fuge said development would support New Zealand’s transition to a low-carbon economy.
“Tauhara will provide a foundation to support New Zealand’s increasing demand for electricity over the next decade. Geothermal is one of Aotearoa’s unsung heroes, but it is playing an important role in our generation’s mix and the transition away from fossil fuels. “
The main details about the planned plant:
- The planned power generation capacity is 152 MW with an annual generator of 1,300 GWh
- Turbines from Fuji Electric with single shaft steam turbines
- Planned completion date: mid-2023
Earthworks have started with leveling of the site, and construction is expected to begin soon. Approximately 800,000 cubic meters of soil will be required to level the site, create a storage pool and to create a visual embankment planted with native trees in front of the station via Broadlands Road.
There will be about 500 people working at the power plant at the peak of construction.
At the same time, the company announced it would seek NZ $ 400 million in equity increases, with the proceeds to “reduce net debt and provide financial flexibility to fund the Tauhara Project and other future growth projects.”
Mr McDonald said the equity increase would give Contact the flexibility to execute on a development pipeline outside Tauhara, which comprises up to $ 800 million in additional projects including potential replacement and expansion of the company’s geothermal power plant at Wairakei. “This means that the Contact can maintain optionality with respect to future investment decisions, which will be scalable and timed to meet market demand.”
Source: Company releases via email