NZ Windfarms Ltd wins Kyoto carbon credit contract

Media Release - 18 December 2003

FOR IMMEDIATE RELEASE

Another "1st XV" for Windflow:
New Zealand Windfarms Ltd wins Kyoto carbon credit contract

New Zealand Windfarms Ltd, a subsidiary of Windflow Technology Ltd, has 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 company proposes to construct a 50 megawatt wind farm over the next four years on the Manawatu saddle, about 10 km south-west of the Manawatu Gorge. The project is named Te Rere Hau, a Maori translation of "Windflow". It will produce 180 million kilowatt-hours (kWh) 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 wind farm 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.

The company therefore submitted the project in the first tender round of the Government's "Projects to Reduce Emissions" programme. The Government received a total of 46 bids for the four million emission units offered in the first round.

Te Rere Hau is one of 15 successful projects being awarded emission units this month. Recently Windflow Technology was one of a "1st XV" of companies to list its shares on the new NZAX market. Now its subsidiary New Zealand Windfarms Ltd has joined another "1st XV" of companies to be awarded a contract for emission units by tender.

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 issue the units annually as each company achieves the agreed reductions in greenhouse gas emissions.

Geoff Henderson, CEO of Windflow Technology Ltd and a director of New Zealand Windfarms, says the award of the emission units is a real boost to the proposed Te Rere Hau wind farm. "If by 2012 the units have a value in the range $10 to $20 each, the contract we are being awarded today will be worth $5-10 million to the project."

"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."

New Zealand Windfarms will be awarded up to 519,000 Kyoto Protocol emission units, provided Te Rere Hau generates its expected kWh of electricity and provided the Kyoto Protocol enters into force by 2008. The wind farm is subject to normal approval processes, such as those required by the Resource Management Act.

New Zealand Windfarms will sign its emission units agreement with the Government today at a function hosted by another successful tenderer, Esk Hydro Power Ltd, near Napier.

ENDS

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