Nats win will see wind drop for gas plants

Contact Energy could potentially build a huge $600 million new gas-fired power station in Auckland if National gets into power, while wind farms would be uneconomic, an independent energy analyst says.

National confirmed yesterday that it would ditch Labour's plan to ban new base-load gas-fired power stations for 10 years, which National said put the security of supply at risk.

Analyst Bryan Leyland said New Zealand needed more power generation as "soon as possible" after drought caused this winter's hydro power shortage.

The place to build a plant quickest was at Contact's Otahuhu site in Auckland, which already had consent for its existing power station, Mr Leyland said. It could be built within two years.

If it chose that option, Contact could buy a 400-megawatt combined cycle power station for about $600 million - much cheaper than a wind farm.

Such gas-fired stations would cost about $1500 to $2000 a kilowatt of capacity to build and run all the time, while wind power would cost $3000 or more and run less than half of the time.

Geothermal or gas-fired power stations were more economic and planned wind farms would probably be shelved as a result, Mr Leyland said.

Building a new gas-fired station at Otahuhu meant household power prices would probably stabilise instead of continuing to rise rapidly.

Some critics have suggested that Labour's planned ban on thermal power stations would result in power prices rising as much as 50 per cent, after adjusting for inflation, as more costly wind farms were built instead of gas-fired stations.

High wholesale prices this winter because of the power shortage were likely to rise about 15 per cent more next year.

Contact Energy would not comment on National's energy policy yesterday.

John Pfahlert, New Zealand Petroleum Exploration and Production Association executive officer, said the policy would guarantee an affordable and secure supply of electricity. The association also welcomed National's plan to spend $25 million over three years on seismic surveys. "It is modest and sensible."