Instead of building wind farms, Contact Energy has put a lot of effort into natural gas power alternatives. The main benefit of natural gas power stations is that you can build them close to where the power is going to be used, and build them at modest capital cost (at least in power station terms). The big negative is that you have to pay for the fuel to keep them running.
Contact has chosen to develop natural gas, principally the Otahuhu B station just south of Auckland. Contact has even drawn up plans for bringing in tanker loads of gas from overseas should local gas supplies dry up. All this at the expense of other energy generation projects (excepting the very recent Te Mihi geothermal project) tells a story in itself.
Contact is majority owned by Australian company Origin Energy. And Origin has extensive natural gas interests off the coast of Australia. It is interesting to speculate whether Contact Energy would have put so much effort into natural gas energy production if Origin were not there on the share register.
I haven't really followed exactly what the tipping point was that saw Contact develop Te Mihi as a geothermal replacement for their natural gas plans. Perhaps if an Origin shareholder is lurking out there they would like to comment?
I guess one advantage of Te Mihi is that although it is not on the doorstep of Auckland, it is at least in the right island. Could it be that Transpower putting a bit more money into the national distribution grid has been a factor?
SNOOPY