Plug pulled on Project Hayes

After six years of environmental hearings, Meridian Energy has pulled the plug on its Project Hayes wind farm on the Lammermoor Range.

Project Hayes was by far the country’s largest wind farm project when it was first announced, and envisaged a 633.3 Megawatt station with 176 turbines stretching across a plain that is both barren and ecologically important. 

Lovers of the sparsely populated area’s vast landscapes, including former All Black Anton Oliver and painter Grahame Sidney, were among chief opponents of the project, and were the reason the Environment Court turned down Meridian’s application in 2006.

The resource consents granted in 2007 were challenged in the Environment Court, which cancelled them, leading Meridian to appeal the cancellation in a process that had been ongoing until today.  . .

It appears Binns viewed Project Hayes as an expensive legacy issue, which was potentially unwinnable, and he said the economics of the project had become less attractive.

“Our portfolio has developed considerably and our review showed us that other projects now are a higher commercial priority than Project Hayes,” said Binns in a statement.

“Meridian now has a number of potential development options that would be progressed ahead of Project Hayes. Withdrawing the consent applications is not only the most prudent commercial decision for Meridian, but also avoids prolonging uncertainty about this project for the community and the project’s supporters.”

Total costs over the nearly six years the issue has been live amounted to $8.8 million, of which $7.2 million would be written off in the forthcoming annual accounts.

It was a very controversial project which attracted strong opposition but it also had strong support from some locals.

It has cost the company a lot of money and it was also expensive for those opposing it.

The project was started by then- CEO Keith Turner who was also behind Project Aqua, Meridian’s attempt at hydro development on the Lower Waitaki River. Investigations for that were estiamted to have cost the comapny about $95 million before it was canned, although that included purchases of land which were subsequently sold at a profit.

One of the arguments for partial privatisation is that it will impose more rigor on companies which are now 100% owned by the state.

I wonder if the company would have attempted to do this development had a minority shareholding been in private hands and whether that would make a difference in future?

7 Responses to Plug pulled on Project Hayes

  1. robertguyton says:

    Yea, I wonder that too. I wonder if local opposition to Solid Energy’s plans for a gigantic open cast mine in Southland would be squashed by overseas shareholders demanding that their promised profits might be affected, backed by their ability to take the company to an international tribunal to make a ruling that would force the continuation of the project, despite the desires of Southlanders.
    I do wonder that.

  2. homepaddock says:

    I was thinking it might have the opposite affect with the planning costs putting the company off before it started.

  3. Richard says:

    I was in two minds about the project on aesthetic grounds:
    a. the Lammermoor Range is beautiful to travel through
    b. its even more beautiful to fly across- I have done that on a number of occasions, and the best description is looking down on the surface of human brain
    c. equally there is something artistically surreal about turbines in the landscape – drive through to Te Anau and look at turbines near Mossburn or the on the approach to Wellington airport
    But the good thing about turbines is that if they are not economically viable and will not leave a blot on the landscape; in Europe wind power seems to be propped up by EU funding

    I am all for tidal power or channeling water from the West Coast of the SI through the mountains to the East providing irrigation and a series of power stations along the way.

    RG – has taken the opportunity, predictably, to champion his opposition to SE’s open cast mine. When I have visitors to my place I frequently take them to McCrea’s gold mining operation near Palmerston. They are astonished by the scale of the operation, particularly pleased that the huge pit will become lake -not in my life time- the sympathetic way the tailings have been placed and the regrowth. Surely with a bit of innovative thinking SE could match McCrea’s ?

  4. Bulaman says:

    It takes 25 percent of the energy generated to “drive” what’s left to market. Wind energy sells for the lowest price in NZ. Was told recently by an “insider” that they hate windpower because when the goldilocks conditions occur that wind actually produces (30 to 35 percent of the time which is high by world standards) it HAS to be sold so it sets the lowest price in the market. There is a report out from PWC that explains how wind subsidies work with ETS driven perks and accelerated tax breaks. Hayes (apart from being a blight on a magnificent landscape) is a step too far for subsidised bird shredders. Of course the potential for ETS to be scrapped in the financial crisis fallout must weigh on it as well.

  5. Bulaman says:

    My mistake study by Deloittes

  6. robertguyton says:

    Richard – McReas is a gold mine. Matuara will be lignite. They are two very different beasts, in terms of impact on the environment. Comparing one to the other is very misleading.

  7. mort says:

    Probably the most sensible idea that Meridian have had in a long time. Windmills make the Rena look like a conservation effort with regards to bird-life, and as for windmills ability to kill humans… Nuclear has a far lower death-toll, so could be argued to be safer.

    Windmills are a brain fart unworthy of their current status. They are expensive, noisy, ugly and uneconomic.

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