Contact Energy reevaluating plans for Wairakei geothermal development, New Zealand

Wairakei geothermal power plant, New Zealand (source: ThinkGeoEnergy, creative commons)

Carlo Cariaga 17 May 2024

New Zealand utility company Contact Energy is currently reevaluating its plans for a new geothermal power plant in the Wairakei field that sought to replace the aging Wairakei A and B geothermal power stations that had been operating since 1958. Inflation of construction costs and a weakening of the local currency has increased the costs of the project substantially, prompting a review of its economics.

First announced in 2022, the GeoFuture strategic initiative proposed the construction of a new geothermal power plant near the existing Te Mihi station. This will increase the power generation capacity for the whole Wairakei field while allowing for the retirement of the Wairakei A and B power stations by 2031.

With the numbers now being reevaluated, Contact Energy is considering several alternatives for the project to still proceed. One option is to extend the operations of the Wairakei A and B power plants while the project is developed with a phased approach. This will allow the project to still continue but with a reduced market and execution risk. There will, however, be some operational, regulatory, and capital requirements to extend the operations of the old power plants.

The Contact Energy board has already approved an additional $30 million in capital for the project, which brings the total development cost to $144 million. The company states that an update on the Wairakei development plan will be provided at the full year 2024 results, which is expected in August.

Contact Energy is also at the final stages of preparation for the commercial operations of the Tauhara geothermal power station. The commissioning process for this project has already started.

Source: New Zealand Herald