Strong power demand continues in the South Island

Media Release
For immediate distribution: Wednesday, February 11, 2004

Strong power demand continues in the South Island

Summer power demand growth in the South Island remains very strong with December year-on-year growth of around 6 percent, while January demand is up by more than 13% over the past two years, according to M-Co figures.

“Power demand growth in the South Island continues to trend well above the long-term national growth average of around 2 percent,” says Meridian Energy spokesman Alan Seay. “This growth demonstrates the urgent need for the new generation in the South Island that Project Aqua would provide.”

In January this year, total South Island demand was up 2.7% from the same period a year earlier (2003), and was up 13.6% compared with January 2002, according to figures supplied by M-Co.

December demand has increased around 6% year-on-year for the past two years (December 2003 was up 5.7% and December 2002 was up 6.1%, compared with the year-earlier period).

Project Aqua is a proposed canal-based hydro-electric scheme in the Waitaki Valley near Oamaru. It would generate enough renewable electricity to power the equivalent of about 375,000 households in an average rainfall year and 250,000 households in a very dry year such as occurred in 1992 (a 1 in 20 year event).

Security of supply in the South Island is forecast to fall below an acceptable level – of being able to cope with a 1-in-20 year low inflow event for the hydro lakes – by the end of the decade as a result of this continued demand growth.

“Project Aqua would effectively restore the South Island to the 1-in-20 year security level,” says . “It would do this by adding around 30 percent capacity to the existing Waitaki hydro scheme and making more efficient use of the water in the Waitaki River.”

Driving demand in the South Island is the increasing intensification of agriculture (including irrigation), agricultural and forestry processing, growth in manufacturing, as well as growth in the housing sector.

“There are no other publicised large-scale generation proposals for the South Island that would be able to deliver the necessary capacity by the end of the decade,” says Alan Seay.

Project Aqua, however, must be commercially viable and environmentally sustainable to proceed. It must cost less than other forms of generation (between 4.5c and 5c per kilowatt-hour). A major potential benefit of Project Aqua is that it could enable irrigation in the Waitaki district.

ENDS

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