Energy SOEs vie for support

By Chris Hutching

Friday 5th March 2004

The propaganda campaigns of the state's two energy companies, Meridian Energy and Solid Energy, have moved into top gear as parliamentarians hear the merits and drawbacks of the Resource Management (Waitaki Catchment) Amendment Bill special legislation being introduced by the government that it says will provide a way to consider all competing claims for the river.

Meridian has raised the spectre of power blackouts if more power generation does not come on stream and it has refined its message to talk about the need for windpower, solar- power and coal-powered energy. The company's spin doctors are pumping out good news stories almost daily about how the proposed $1 billion Project Aqua, diverting two thirds of the country's second largest river into canals, will also enhance the environment, agricultural production, recreation and the local and national economies. The messages appear lost on most South Canterbury locals, including farmers who want some of the water for irrigation, and of course environmentalists distressed at the proposed massive alteration of the landscape.

Against this background, Solid Energy has also been making traction minus the spin doctors. Its senior executives have spoken to parliamentarians, and opinion makers and at public meetings about coal energy as an alternative or complement to hydro-electric generation.

Solid Energy chief executive Don Elder said his speeches were not "anti-Aqua" but rather about the opportunities for other generators in the energy sector, and the company has plans to build them.

He stressed electricity generation provided only 30% of the country's energy requirements and that future hydro generation capacity was constrained, which meant coal generation was a viable and attractive option. The cost of electricity (in Christchurch) rose 29% between February 1999 and September 2003 with consumers in other cities experiencing similar hikes.

"There's not enough attention being given to the coal option for electricity generation so we've decided to go ahead with a couple ourselves."

Mr Elder confirmed Solid Energy had been carrying out feasibility studies into developing four coal-powered generators. Two, in Southland and at Buller on the West Coast, are likely prospects. At least two other power companies are expected to unveil similar plans in coming months.

Solid Energy has faced opposition from conservation groups close to the government but some of those opponents may modify their views given the environmental implications of Project Aqua. Energy Minister Pete Hodgson is understood to be at odds with some officials and other ministers in his personal opposition to coal power.

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