Several large-scale hydro development schemes in the top of the South Island have been put on hold, with a drop in demand for energy pegged to the global financial crisis making the schemes uneconomic.
Environmentalists are celebrating Meridian's "courageous decision" to walk away from its proposal to dam the West Coast's wild Mokihinui River.
The announcement yesterday comes on the heels of TrustPower shelving its plans to build a hydro-electric power stations on Marlborough's Wairau River and the Arnold River near Greymouth.
Nelson's Network Tasman said its plans to investigate building a scheme on Murchison's Matakitaki River was also on hold because of economic and environmental hurdles.
In the south, Contact Energy has also shelved its plans for schemes on the Clutha.
Forest and Bird top of the south field officer Debs Martin said Meridian's decision to walk away from the Mokihinui was "fantastic" and an important win for the environmental lobby group.
"This is one of New Zealand's largest and most pristine wild rivers, and it was critical for Forest and Bird that we save this from being dammed," she said.
"This dam would have flooded the greatest area of conservation land in New Zealand."
She believed it was now time to properly protect the river by adding it to the nearby Kahurangi National Park.
The Department of Conservation and other groups had appealed against the decision granting resource consent for the Mokihinui project, which would have resulted in an 85-metre-high dam being built and a 14-kilometre-long lake created.
Ms Martin believed the long and costly process that Meridian faced in the Environment Court had contributed to its rethink of the project.
A lot of the southern hydro-electric projects put on hold were announced when the economy was booming and they were no longer economic, she said.
They had also been more than what was needed, since there were enough generation projects in the pipeline.
She believed it was time to look at different ways of generating power.
Network Tasman's commercial manager, Colin Starnes, said it was also putting its plans to investigate building a hydro scheme on the Matakitaki on hold.
News that the projects would not proceed meant that the Nelson region was left in the same position it had been in for the past 10 years. Mr Starnes said since the global financial crisis, economic growth had dropped and demand for electricity had dropped.
The Christchurch earthquakes had also meant the demand for electricity had fallen in the South Island.
Transpower charged to import power to the North Island and this meant generating power in the South Island to sell north was less economic, he said.
Several geothermal stations had also been developed in the North Island, which were going well and proving reasonably economic, reducing the need for southern hydro stations.
West Coast-based Green Party list MP Kevin Hague said news the Mohikinui dam would not go ahead was an important victory.
A more strategic approach to the way power was developed and planned was needed, he said.
It made sense to look at how much power was needed in each region, what the alternatives were for developing power there, and then put only the best scheme into the resource consent process.
Meridian had spent $17 million on the Mohikinui and DOC had spent its entire advocacy budget for one year on the failed project.
He believed the Stockton Plateau hydro scheme could provide enough power for the West Coast and it would make sense to look at a large-scale solar scheme for Nelson.
TrustPower communications manager Graeme Purches said the Wairau and Arnold schemes were fully consented and were only on hold and would be resurrected in the next nine years if the costs stacked up.
He said the top of the south was still one of the key areas that needed more generation locally to improve the security of supply.
TOP OF THE SOUTH HYDRO SCHEMES
Mohikinui: Meridian – proposal dropped.
Matakitaki River, Murchison: Network Tasman – proposal on hold.
Wairau River: TrustPower – consents granted, but scheme on hold.
Arnold River: TrustPower – consents granted, scheme on hold.
Stockton Plateau Hydro Scheme: Hydro Developments Ltd – resource consents granted.
Matiri River, Murchison: New Zealand Energy Ltd – consents granted.
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