Crest Energy Limited has applied for RMA consent to construct a marine turbine power generation project in the Kaipara Harbour in Northland, northern New Zealand, for a period of 35 years. The Project comprises up to 200 completely submerged marine tidal turbines with a maximum generating capacity of around 200MW, located near the entrance of the Harbour.
Crest Energy estimate its plans when fully implemented, will generate power for up to 250,000 NZ homes by harnessing the power of the tidal flows in to and out of the Kaipara Harbour. The Project may contribute 3% of New Zealand’s supply.
The harbour is one of the largest harbours in the world covering 900 square kilometres with 3,000 kilometres of shoreline. The Kaipara extends for 60 kilometres north to south.
Tidal turbines follow similar principles to wind turbines, except that it is possible to forecast the tides and therefore both the level of generation and the time of day for production of power. There are about ten companies constructing tidal turbines and others joining the industry, mainly from northern Europe and North America.
Tidal and wind power generation have many similarities and some differences. Since sea water is 830 times denser than air the same flow generates several hundred times more power in water than in air. In addition tidal turbines are totally submerged and therefore invisible, and silent.
The Kaipara Harbour has a number of factors making it suited to marine turbines. Up to 8,000 million cubic metres of water pass in and out of the harbour each day, which is equivalent to flooding the island of Manhattan to half the height of the Empire State Building (185 metres / 600 feet). The harbour is rarely used for shipping due to the treacherous tides and sand bars at its mouth.
The project maintains New Zealand’s tradition of harnessing renewable energy. About 60% of New Zealand’s electricity is produced from hydroelectric, geothermal, wind and other sustainable sources.
Crest Energy hopes its application to use the resources of Kaipara Harbour for 35 years will be approved by late 2008, but the consenting process has dragged on following an appeal against recommendations in favour of the project. If Crest Energy proceeds to the construction phase the initial capital requirement is estimated to be approximately NZ$40 million. Estimated total costs over ten years are about NZ$600 million, offset by modest but growing revenues from year three. Annual revenue from 200 turbines is theoretically up to NZ$100 million at current wholesale electricity prices.
Crest Energy also notes the following:
The development of the consent applications is the culmination of about eight man years of effort to date and has been funded privately within NZ Northpower and Crest Energy have signed a Memorandum of Understanding, the principles of which include “to establish and agree commercial terms between the parties that will provide for the formalisation of an effective and equitable working relationship” and “to support each other in finding efficient ways to deliver the Project requirements” Crest Energy has a Certificate of Compliance dated 19th July 2007 issued by Kaipara District Council pursuant to Section 139 of the RMA certifying that the overland reticulation of power generated by the project is a permitted activity as defined in the District Plan Crest Energy is conducting a carbon footprint analysis of the Project in comparison with local geothermal, hydroelectric and wind energy sources in anticipation of negotiations concerning the carbon value of the Project Investigations of opportunities for tidal power in the South Pacific islands region, initially in Samoa and Tonga, are in progress A financial audit of Crest Energy’s financial statements for the year ended March 2007 was completed in August 2007 by Hayes Knight Audit. The same auditors are currently reviewing the year ended March 2009. Crest Energy commissioned a Cultural Impact Assessment which forms a part of the applications of July 2007. The assessment raised a number of issues which were reviwed at the Hearings ending 30th May 2008. Compared to OECD averages NZ has relatively low labour costs, and the NZ legal system is based upon English law The government announced the Emissions Trading Scheme which is good news for the Project (20Sep07) NZ government announced the New Zealand Marine Energy Deployment Fund in 2007 and Crest was awarded the maxumum available in the first year, NZ$1.85 million, by the Energy Minister in May 2008. The award is subject to the granting of consents for the project. An opportunity to buy shares in Crest Energy in September 2007 was oversubscribed. It was not open to the general public. Interested potential investors should visit our Investors page. Ex-Prime Minister Helen Clark launched the New Zealand Energy Strategy (NZES) which includes a target to generate 90% of electricity from renewable resources by 2025. This implies a doubling of renewable energy generation of about 60%. NZES is also concerned with energy efficiency. (12Oct07) NZES limits the construction of new fossil fuel generation plants for a decade making the implementation of large renewable energy projects much more likely, particularly when combined with the Emissions Trading announcements.
Kaipara tides average 2.10 metres (nearly seven feet). The Kaipara Harbour has a temperate climate with an average annual air temperature of 16ºC (61ºF). It is close to New Zealand’s most populated city, Auckland, an area with 1.5 million residents, and another large centre, Whangarei. There are readily available routes to sell electricity using existing transmission lines.
Many bodies are actively involved in the management of Kaipara Harbour including Government departments and local community groups, Northland Regional Council, Auckland Regional Council, Kaipara District Council and Rodney District Council .