'Really good chance' of $5b offshore wind farm able to supply third of NZ homes

Tuesday, 29 March 2022

British prime minister Boris Johnson forecast in 2020 that offshore wind farms could generate enough electricity to power every home in the UK by 2030..

There is a “really good chance” that a massive $5 billion offshore wind farm capable of powering more than a third of New Zealand homes will be built off the west coast of the lower North Island, says the Danish investment fund that is behind the project.

Energy Minister Megan Woods said the Government had been developing regulations for offshore renewable energy schemes and it was “fantastic to see that gave the industry the assurance they were looking for to get projects underway”.

The NZ Super fund announced on Tuesday that it had established a joint venture with Danish infrastructure fund Copenhagen Infrastructure Partners (CIP) to investigate building a huge wind farm in the South Taranaki Bight.

Subject to a feasibility study, a wind farm could be built with a total capacity of 1 gigawatt, capable of supplying “over 11 per cent of New Zealand’s current electricity demand capacity”, the Super fund said in a statement.

At that size, the Super fund said the wind farm would be able to power more than 650,000 homes.

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But it said the Super fund and CIP believed the wind farm could later be doubled in size to generate 2GW.

Wind farm could eventually supply more than half of NZ homes, investors believe.

New Zealand had a total electricity generating capacity of just over 9.3GW in 2020, according to the Ministry of Business, Innovation and Employment.

CIP has invested €16b (NZ$25.5b) in renewable energy schemes worldwide and has been separately investigating building a 2.2GW wind farm off the south coast of Victoria capable of powering 1.3 million Australian homes, after receiving an exploration licence from the Australian government.

Business development manager Giacomo Caleffi said he believed there was a really good chance the New Zealand scheme would eventuate though he said he could not put a percentage figure on it.

The “fundamentals” of offshore wind generation in the South Taranaki Bight were “absolutely amazing” because of its high wind speeds and shallow seabed, and it was not seeking government subsidies, he said.

A 1GW wind farm there would be capable of generating 4.5 terawatt-hours of power a year, which was a conversion rate close to the best sites in Britain’s North Sea, he said.

NZ Super fund spokesman Conor Roberts said the fund expected it would take about 10 years to get the approvals for the wind farm and built it, and that it would cost about $5b.

Minister of Energy and Resources Dr Megan Woods says New Zealand has always relied on imports, and can now get refined fuel from multiple places. (File photo)

Assuming it was based on current technology, the wind farm would comprise 70 giant ‘15 megawatt’ turbines, each measuring 260 metres from sea level to the highest arc of its blades, he said.

The next steps would involve engaging with local businesses, iwi and councils, and gathering environmental data on tides and winds, he said.

Caleffi said CIP envisaged the wind farm would be located at least 23 kilometres out to sea, but would be faintly visible from the coast on a clear day.

“One thing we are keen to keep away from is the marine mammal sanctuary. Closer to shore there are some more protected areas.”

CIP expected to begin discussions with local communities in the next month or two, he said.

Woods said there was significant interest from overseas developers in offshore wind farms but the Government needed to get the regulatory settings right and provide prospective developers “the certainty they need to make the large-scale investments”.

“It’s exciting to see how this new frontier for renewable energy can help us reach our net-zero emissions goals, as we decarbonise our energy system,” she said.

NZ Super fund chief executive Matt Whineray said offshore wind energy had the potential to be “an attractive commercial opportunity” and aligned with the fund’s climate change investment strategy.

“We are in the unique position of being able to attract best-in-class global partners on infrastructure developments that create positive environmental and social outcomes while delivering financial returns,” he said.

“While this proposal is still at a very early, exploratory stage, we are confident it could help New Zealand’s transition away from fossil fuels and towards home-grown clean energy,” he said.

Sam Stubbs, chief executive of KiwiSaver fund Simplicity, said he hoped there would be an opportunity for KiwiSaver funds to invest in the project, either before or after its construction.

“It is an ideal investment for very long duration KiwiSaver-money. It is certainly the sort of thing we would like to look at,” he said.

“We have perilously little to invest in domestically in terms of new projects – particularly ones that have long-term investment horizons.”