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Contact And Meridian To Co-Operate On Transmission Investment

Contributor:
Fuseworks Media
Fuseworks Media

25 June 2008 - Contact Energy has withdrawn its Environment Court appeal of Meridian's Project Hayes wind farm.

Contact Energy had appealed Project Hayes because of its concerns that transmission constraints in the lower South Island would restrict the amount of energy that could be transmitted northwards, potentially resulting in the spilling of valuable water across the Clutha hydro stations.

"Contact's concerns relate to the impacts of building new generation behind transmission constraints and the potential for those constraints to 'crowd out' existing hydro generation from Contact's Clyde and Roxburgh dams resulting in water spillage," said Contact Energy Chief Executive, David Baldwin.

Meridian Chief Executive, Tim Lusk, welcomed Contact's decision.

Mr Lusk and Mr Baldwin both said "The real challenge here is to address the underlying need for the timely development of more transmission capacity. This is particularly the case in the lower South Island to enable renewable projects such as Hayes to be built without raising the risk of water being spilt.

"Building new power stations without the ability to get the power to customers isn't going to help either customers or our shareholders," said the two chief executives.

Contact and Meridian have agreed to jointly pursue with the Electricity Commission and Transpower the need to upgrade the transmission system in the lower South Island. The objective of both generators is to ensure that the national grid in the lower South Island has sufficient capacity to carry the power from existing and planned generating facilities to customers.

The electricity industry is very focussed on new investment in generation capacity with at least 1,300 megawatts of new generation due to come online in the next four years. Investment in transmission capacity throughout New Zealand is a necessary part of this investment.

"This agreement to cooperate on transmission investment is an excellent example of industry players working together on issues of national importance," said Mr Lusk and Mr Baldwin.

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