Dam plan on hold
King Country Energy says it is putting on the back burner its plan for a bigger and better dam on the headwaters of Taranaki's Mokau River, even though it has already booked $2.5 million costs in gaining resource consents.
King Country said today it would shelve the resource consent it has already obtained for the proposed 9.6MW hydro-generation scheme along the Mokau River, 4.3km downstream from its existing Wairere Falls dam.
The private electricity company's project _ to dam and flood almost 5km of the Mokau River near Aria to build a power station _ attracted protests from environmental and recreational groups.
They said that King Country's existing old hydro station on the river had no large storage lake so had minimal effect on the river flow, but the new power station would wreck whitewater rapids on the river.
King Country had put seven years of work into gaining the resource consents but chairman Brian Gurney today cited consenting delays, mounting costs and significant increases in the expected capital cost as reasons for shelving the development.
When Waikato Regional Council granted supplementary consents in January for a concrete dam on the Mokau River, King Country Energy had spent $2.5 million on the consenting process.
''However, we have a long way to go until consents may be granted and estimate we would need to invest a further $500,000 to complete the process,'' said Mr Gurney.
''Economics of developing the Mokau hydro scheme are very challenging,'' he said. ''Even if we gained resource consent, we would be unable to justify building the plant for many years, unless there is a significant increase in the forecast wholesale electricity price path.
''At this point, the Mokau project is economically infeasible,'' Mr Gurney said.
The company is 35 percent owned by Todd Energy Ltd, with other major shareholders including King Country Electric Power Trust 10 percent and Waitomo Energy Services Trust, 8 percent.
King Country Energy posted an after-tax profit of $4.4 million in the year to March 31, up from $1.6 million last year on steady revenue of $33 million. Total electricity retail volume decreased by 4 percent to 229GWh and customer numbers were steady at 19,000.