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• 2. Short Term Options

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• 2.1 Use of Existing Gas and/or Diesel Emergency Generation
• 2.2 Geothermal
• 2.3 Industrial Generation
• 2.4 Gas Turbine Plant
• 2.5 Power Barges
• 2.6 New Gas or Diesel Standby Generation
• 2.7 Hydro Generation
• 2.8 Wind Generation

2.1 Use of Existing Gas and/or Diesel Emergency Generation

There is about 40MW of emergency diesel generator capacity in the Auckland region, approximately 16MW in the Wellington region and 20MW in the Christchurch area. Many of these units can operate in parallel with the grid, or can provide a substitute for grid power. Studies that have been done on running these plants need to be reviewed in light of the present circumstances including the need for units to run continuously for two or three months. Most have permits that allow them to run only for short periods in system emergencies. Operating costs for this generation is less than 15 c/kWh for diesel and 7c/kWh for gas, and capacity would be available almost immediately.

Other than permitting issues, the issues that need to be addressed are:

• No commercial incentive because of existing energy supply price arrangements Noise
• Emissions

Stand-alone emergency generation has not been considered in this study because it cannot operate in parallel with the system. Many of units are small and it may not be economic to convert them for operation connected to the system.

2.2 Geothermal

Details of all major geothermal opportunities in New Zealand are included in Section 3 and offer potential for new generation in New Zealand over the next few years. However the following opportunities exist for increased output from existing geothermal plant in the short term.

1. There is an opportunity to immediately increase the output of Contact's Poihipi plant by about 10MW. The existing plant has a 55MW capacity and is connected to wells that can provide sufficient steam for 33MW, but is consent limited due to a restriction on draw-off above a particular reservoir depth. The plant currently operates at maximum capacity approximately two-thirds of each day, then goes on standby. In the short term, it would be possible to run Poihipi at full load continuously. Two advantages of this option are that it could happen immediately and at zero cost if the consent restrictions could be temporarily put aside. In the short term at least, increasing Poihipi output would not be detrimental to the main Wairakei plant. This opportunity is analogous to the lowering of hydro lakes to emergency levels, but with significantly less environmental impact. Once the shortage has ended it could be shut down - or run at much lower outputs - to allow the reservoir to recover.
2. Consents are already in place for further deep drilling at Ohaaki. An accelerated drilling programme would bring some capacity on line within 3 months and up to 50MW capacity within 9 months. The use of multiple drilling rigs would be needed to achieve this time frame, based on experience with other geothermal fields internationally.

2.3 Industrial Generation

There is an old 3.5MW cogeneration plant at the Te Rapa Dairy site that could be re-commissioned within one to two months.

At the Degussa Morrinsville plant, there is an opportunity to install approximately 1.5MW of generation capacity using existing gas supply and electrical infrastructure. This could be implemented within 6 months or less.

Many dairy processing plants and other industrial sites have cogeneration plants. Owners could be encouraged to use whatever means they have to operate these plants and maximise generation.

Other longer term industrial cogeneration options are discussed in Section 3.

2.4 Gas Turbine Plant

For generating significant amounts of power in the short term, our investigations have shown that gas or liquid fuel gas turbine (GT) generation is the quickest option. There are several locations where GTs could be installed quite quickly.

We have identified plant available for rental or purchase. Compared to purchase, rental options are likely to be expensive in terms of $/MWh in the short term but the ability to return the plant once it has served its purpose may be useful.

Renting may also be a good idea for temporary installations as they may be less contentious from an environmental and consenting point of view. In any case, the environmental impact of the bulk of the gas turbine plant options identified would be low.

The following plant is available on the international market. Further details including capital and operating costs are included in Appendix A.

The estimated implementation times assume that the projects will be fast tracked and that plant will be transported by sea. Air transport, which would be very expensive, could be suitable for some of the plant and would shorten the estimated times. Siteworks and connection with the grid would need to progress rapidly to achieve these short installation times. To the best of our knowledge, no existing site has approval under the Resource Management Act to allow the increase in capacity envisaged above.

All the plant generates at 11kV. Transformation to higher voltage will be necessary at some sites.

Decisions will be needed on:

• Siting the units
• Ownership & Operation of the units
• Fuel supply
• Consents

Potential sites are listed below:

From the above, we conclude that plant is available to provide emergency capacity within 3 to 4 months.

The Otahuhu "A" station has two double ended 55MW gas turbine generators. (Two gas turbines and one generator.) Each of the generating units currently has only one gas turbine that is operational. It may be possible to add another gas turbine at the other end of each generator to replace the old units, which are believed to be beyond repair. This may be a quick and easy solution. It could give an additional output of 40-50MW. The units could run on gas or diesel oil. We understand two Olympus units are available from Texas Australia Power. See Appendix A for details.

The Otahuhu site is also suitable for installing 50-100MW of package diesel generators connected to the existing transformers and switchgear. (If this is contemplated, the Marsden A site is also an option and it has the advantage of being closer to the refinery.)

The Otahuhu site also has sheltered access from the Tamaki Estuary. It could be considered for location of a power barge - see section 2.5.

There are also options to increase the capacity of the Southdown Cogeneration Plant by 1 to 2MW per gas turbine. This would involve retrofitting fogging systems to the inlets and should be achievable within 3 months.

2.5 Power Barges

There are several coastal locations suitable for mooring a power barge where the necessary transmission connection and tanker unloading facilities are in place. Power barges are equipped with gas turbines or diesel engines operating on distillate (diesel), gas and in some cases heavy fuel oil (HFO).

A power barge could be generating within 4-6 months, assuming no delays in obtaining approvals.

The advantages of a power barge are:

• barge(s) already exist, ready to run - once positioned, time to connect and commission is short
• barge may be on-sold when it is no longer needed
• may be available for rent

This study investigated over twenty power barge listings on the Internet. Units vary from 30 to over 100MW. Prices vary between US$300 and US$420 per kW depending upon the state of the generation equipment. A number of suppliers are offering to construct power barges. Construction time typically adds 4 to 6 months to delivery, thus losing the advantage of bringing in a barge. These do not offer any significant advantage over use of land based plant at an existing site.

So far only two 96MW barges have been confirmed as suitable for urgent short-term use in New Zealand. These units would require 8-12 weeks for preparation for shipping, six weeks for delivery, and approximately four weeks to connect and commission. The other options require further investigation.

Locations suitable for power barges are summarised as follows:

Table 2-1: Possible Power Barge Site Ranking

Operating Costs: Based upon a price of NZ45c/l for diesel fuel and typical gas turbine plant O&M costs, the following cost to generate is derived:

The estimated capital cost of a 96MW power barge is US$40m. It may be possible to rent suitable plant.

Environmental Issues: Mainly exhaust emissions, noise and the potential for fuel spills.

2.6 New Gas or Diesel Standby Generation

Several suppliers are offering packaged new and refurbished gas and diesel engine generator sets that could be shipped immediately and installed quite quickly. Unit sizes range from a few hundred kilowatts to several megawatts. New units have an installed cost of $1000 to $1500/kW and typical operating costs of 15-20c/kWh for diesel and 5-10c/kWh for gas.

There are also several short-term options for power generation using stranded gas, coal seam methane, landfill gas, and sewage/biogas. Stranded gas is naturally occurring gas that is not readily connected to a pipeline system. The potential for using these resources with gas engines or gas turbines implemented within six months is as follows:

There are currently two joint ventures investigating Coal Seam Methane opportunities. A Solid Energy JV has identified sites at Kaitangata and Huntly, and drilling at Huntly. A Mighty River Power JV is looking at other sites in both North & South Islands. A pilot project would require approximately five wells to be drilled and could deliver approximately 10MW of generation using gas engines within six months, subject to regulatory constraints.

2.7 Hydro Generation

There are no opportunities for significant increases in hydro generation in 2003. Longer-term options exist for increasing hydro generation by allowing increased flow through certain stations. These are outlined in Section 3.

The Mangahao 4MW hydro unit is committed by Todd Energy and scheduled to be available for winter 2003.

2.8 Wind Generation

The only wind generation scheduled to be available for winter 2003 is the Windtorque 0.5MW unit near Christchurch.

⁵The gas engines and turbines may be suitable for installation in Contact's existing Olympus TwinPac units in Otahuhu A.