Eastland Group chief executive Matt Todd says the timing is right for development of its Te Ahi O Maui geothermal generation project near Kawerau.
Yesterday’s formal approval of the project by Eastland Group’s sole shareholder, the Eastland Community Trust, gives the company the green light for the next step of the project.
The project is a partnership with the Kawerau A8D Whenua Trust, owners of the land where the geothermal power plant will be built 2.3 kilometres north-east of the Kawerau township. It will be designed to generate approximately 20MW net of electricity. The plant has the potential to generate enough power to supply 20,000 homes with their annual electricity needs.
“We’ve now got all the necessary approvals to proceed and while we believe we have a viable project there are still many complex economic decisions ahead,” says Mr Todd. “Market conditions remain tight but they continue to support the development of the plant on the basis that all the suppliers we’re talking to are able to deliver to our business case numbers. We are currently looking for favourable conditions from enthusiastic suppliers.”
Mr Todd says resource consents have been awarded to allow for the construction and operation of the project, and the taking and discharge of 15,000 tonnes of geothermal fluid daily from the Kawerau geothermal reservoir for a period of 35 years.
He says the company has spent $9 million to date on assets for the Te Ahi O Maui project including development rights, rights to KA22 well, land lease, access, resource consent and various other permits.
“The plant will operate within the conditions of its resource consent which require some level of fluid to be reinjected back into the reservoir to ensure that the field is adequately replenished. The exact amount of reinjection will depend on the final design of the plant.”
Mr Todd said April 2016 was the earliest drilling would begin, with the plant likely to be operational around two and a half years after that.
“This project makes excellent economic sense to us, it has a strong positive cashflow which will enhance profitability for the company and add value for our shareholder and its beneficiaries within Tairawhiti. Te Ahi O Maui creates diversification for Eastland Group and, once completed, means approximately 20 percent of its investments sit outside of the region.
“The project is consistent with Eastland Group’s strategy of developing a portfolio of renewable electricity generation. Geothermal will provide complementary base load generation to support an emerging market where solar photovoltaic (PV) plays a greater part in meeting the country’s energy needs.
Mr Todd says Eastland Group is also focused on minimising the environmental impact of its projects. “The Te Ahi O Maui project team led by Ben Gibson has worked in conjunction with the A8D Trust to understand and accommodate their needs as tangata whenua.”
That sentiment was echoed by Tomai Fox, trustee of the Kawerau A8D Ahu Whenua Trust, who says ECT approval is a huge milestone for the A8D Trust.
“This project is the realization of a long held dream of the Trust. We look forward to completing the geothermal plant because it will provide long term benefits to the trust. Our project team has worked really hard to make sure the project is managed in a culturally and environmentally acceptable way too.”
Picture caption: Eastland Group’s existing 8.4 megawatt geothermal plant near Kawerau is running at 97 percent capacity.
Kathy McVey, Marketing & Communications Manager
021 862-177 or 06 986-4812