Hydro scheme and wind farm win Kyoto carbon credits

Proposals for a mini-hydro electricity scheme in Hawke's Bay and a large wind farm in Manawatu have won a share of "carbon credits" from the Government for cutting greenhouse gas emissions and helping to make New Zealand's electricity supply more secure.

The owners of the projects are Esk Hydro Power, set up by the founder and Managing Director of CJ Pask Winery, Chris Pask, with fellow director Hugh Lattey, and New Zealand Windfarms, a subsidiary of Windflow Technology. They will sign agreements with the Government today to reduce emissions of greenhouse gases in return for the credits, or Kyoto Protocol emission units.

The projects are two of 15 awarded emission units this month in the first tender round of the Projects to Reduce Emissions programme.

Pete Hodgson, Convenor of the Ministerial Group on Climate Change, says the two projects illustrate how climate change policy offers new business opportunities in pursuit of a more sustainable energy future. "These proposals are for a relatively small hydro project and a large, 50 megawatt wind farm. Together these projects will reduce emissions equal to 532,008 tonnes of carbon dioxide between 2008 and 2012, the first commitment period of the Kyoto Protocol."

Generating electricity from renewable sources of energy, such as wind and water, reduces emissions by removing the need to generate more electricity using fossil fuels such as coal or gas.

"These two companies are to be congratulated. Not only will their projects directly benefit the New Zealand environment by reducing emissions. They will also help to make New Zealand's electricity supply more secure and contribute to the Government's target for renewable energy. That's a win for these businesses, the energy sector and New Zealand as a whole."

Chris Pask says the proposed mini-hydro scheme, to be built on his family's Toronui Station in northern Hawke's Bay, could help Hawke's Bay industries that use large amounts of electricity.

"This scheme will produce up to 4.3 million kilowatt hours of electricity a year, enough to power one or two local industrial plants," Mr Pask said. "At the moment nearly all of Hawke's Bay's electricity comes from outside the region. This mini-hydro scheme would be able to produce local, clean electricity which could help the competitiveness of some of our local exporters." Geoff Henderson, a director of New Zealand Windfarms, says the award of the emission units makes the proposed Te Rere Hau Windfarm a viable proposition.

"The Government's award of the Kyoto units will help turn this project into something real and tangible that will not only make New Zealand's electricity supply more secure but will also feed into the New Zealand economy," he said.

"We intend using turbines that are designed and made in New Zealand for New Zealand conditions. All up they will have 95 per cent New Zealand content."

The wind farm, about 10kms south-west of the Manawatu Gorge, would produce enough electricity to power 15,000 households, or a city the size of Wanganui.

Mr Hodgson says both projects and the reduction in emissions they will achieve are over and above what would happen in the normal course of business.

"This demonstrates the value of the Projects to Reduce Emissions programme in stimulating projects that would not otherwise be carried out. The award of emission units enables these businesses to take their projects forward, subject to the usual processes such as those required by the Resource Management Act."

Emission units are expected to be internationally tradeable when the Kyoto Protocol comes into force. At that point, many countries covered by the Protocol will need to buy extra units to meet their agreed emission targets. Businesses will be able to sell their units as they wish. The Government will award the units annually as each company achieves the agreed reductions in greenhouse gas emissions.

The Government received a total of 46 bids for the four million emissions units offered in the Projects to Reduce Emissions tender. All 46 tenders were assessed by an independent panel, chaired by company director Rick Christie, while the final decisions were taken by the Chief Executive of the Ministry for the Environment, Barry Carbon.

Details of other projects awarded emission units will be announced as agreements are signed by the project owners and the Government.

For more information on climate change policy, visit climatechange.govt.nz

Supplementary information on the projects

Esk Hydro Power - Toronui Mini-Hydro Power Scheme

The proposed Toronui Mini-Hydro Power Scheme will be built on the Pask family's Toronui Station in northern Hawkes Bay. It will produce up to 4.3 million kilowatt hours of electricity a year which Esk Hydro Power plans to sell to local electricity users. The scheme is expected to start generating electricity in 2005.

By replacing electricity generated from fossil fuels, the Toronui scheme will reduce emissions of greenhouse gases equal to 13,008 tonnes of carbon dioxide between 2008 and 2012, the first commitment period of the Kyoto Protocol.

Esk Hydro Power will be awarded up to 12,000 Kyoto Protocol emission units as greenhouse gas emissions are reduced. The scheme is subject to normal approval processes, such as those required by the Resource Management Act.

New Zealand Windfarms - Te Rere Hau Windfarm

The proposed 50 megawatt Te Rere Hau Windfarm will be built near the Manawatu saddle, about 10km south-west of the Manawatu Gorge. It will produce 180 million kilowatt hours of electricity a year, enough to power 15,000 households, which will be fed into the national electricity grid.

The wind farm will be built in stages, with the first six turbines expected to be erected in the next 18 months. The wind farm is expected to start generating electricity in 2005.

By replacing electricity generated from fossil fuels, the Te Rere Hau Windfarm will reduce emissions of greenhouse gases equal to 519,000 tonnes of carbon dioxide between 2008 and 2012, the first commitment period of the Kyoto Protocol.

New Zealand Windfarms will be awarded up to 519,000 Kyoto Protocol emission units as these emissions are reduced. The wind farm is subject to normal approval processes, such as those required by the Resource Management Act.

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