Todd to join race for tidal power

Wellington's Todd Energy is taking a 35 percent stake in tidal power company Crest Energy, which could lead to a $600 million power project at the mouth of the Kaipara Harbour.

The companies will develop a tidal electricity generation farm in the Kaipara Harbour with the potential to generate enough electricity to power 250,000 homes in Northland.

If the project goes ahead, a total of 200 turbines would be installed in four stages over 10 years with an estimated cost of about $600m. First power from an initial 20 turbines could be about five years away.

Todd owns and operates its own gas, oil, LPG, and electricity operations in New Zealand.

In October it announced plans to build a $65m liquid petroleum gas (LPG) plant in Taranaki. Todd is also involved in a $100m oil and gas drilling programme.

Cook Strait is another potential option in the future for tidal power, but Todd and Crest would focus on Kaipara first. Another company, Neptune Power, plans to test a one megawatt turbine in Cook Strait soon, using its own technology.

Todd Energy managing director Richard Tweedie said its decision to become a significant shareholder was a sign of confidence in both Crest Energy and its Northland tidal project. "We will also be at the forefront of developing a commercial tidal plant in a world-wide context."

The Kaipara tidal project would be the first of its kind in New Zealand.

Todd Energy generation development manager Tim Cosgrove said the unit cost and when the first turbines might start producing remained uncertain. "We need to let the turbine technology mature a bit. I think you are looking at about five years".

The aim is to pick the best suitable turbines internationally, not develop their own technology. "The longer we leave it, the less risk".

How the project might be paid for and whether they would seek other partners would be decided later.

"It would be fair to say the majority of the funding would come from Todd," Mr Cosgrove said.

Todd Energy would not say how much it had paid for its initial 35 per cent holding in Crest, but it has an option to increase that to 45 percent.

Crest has been granted resource consent by Northland Regional Council, but that has been appealed to the Environment Court.

Tidal power is in its infancy internationally, with a number of test projects, but only one tiny small commercial operation in the East River in New York supplying power to a supermarket from just six turbines.

"There are not many looking at large scale [projects[ like we are at the moment," Mr Cosgrove said.

But tidal power was a huge resource in New Zealand and globally, and the technology would improve as it had for wind turbines in the past decade, he said.

Tidal power was also more predictable than wind power, which may be in its favour in terms of the cost of production which remained unclear. An emissions trading scheme would also make tidal power more attractive.

Kaipara had the added advantage of being one of the largest harbours in the world, but was also quite sheltered. Because of a sand bar, large ships did not pass through the harbour mouth.

"It is also good for security of supply for the Northland region because there is not a lot of generation north of Auckland," he said.

State-owned Genesis Energy is planning a large scale gas-fired power station at Rodney, also north of Auckland. But the region was rapidly growing, so another big power station was not expected to be a big risk for the Kaipara tidal power project, Mr Cosgrove said.

- © Fairfax NZ News