HDL’s strategies for promoting the Stockton Plateau Hydro Scheme have focused on implementation of the Ngakawau Restoration Project in response to the investment objectives of prospective investors.
HDL’s latest development strategy proposes value engineering to optimise the hydro potential and minimise development risks. If the government’s investment objectives address the social and economic effects that will follow the exit of the miner, the government might be expected to encourage green hydro generation to attract investment to the West Coast region. This might also be expected from the government’s partner, manua whenua Nagti Waewae and Ngai Tahu, to ensure the kaitiakitanga (stewardship) of the Ngakawau River restores the mauri (life force) of the river.
The opportunity for dedicated green power supply to a high energy industrial user may be the highest value holistic implementation strategy for the government, iwi, environment and the West Coast community.
Larger reservoirs, up to the storage volumes consented for the Stockton Plateau Hydro Scheme, may become optimal as the value of renewable energy increases. The value of hydro storage is expected to increase to cover climatic periods when solar and wind generation is suppressed. The value of configuring the scheme to meet the requirements of a high energy user may also be significant.
HDL’s proposed implementation strategies for the Ngakawau Restoration Project, are outlined in the NRP Concept Design Report (pages 66-88), submissions to the Provincial Growth Fund (NRP Project Outline and NRP Development Plan and Funding Structure), the strategy prepared in consultation with BT Mining (NRP HDL-BT Development Strategy) and in a Westpower - HDL joint submission to the Treasury’s RFI.
In all the submissions HDL has proposed staged implementation through a Special Purpose Vehicle (SPV). HDL’s expectation is that a lead investor will establish the SPV and invite participation by other stakeholders with an interest in the long-term outcomes for Stockton Plateau and the Ngakawau River. The lead investor will need to enjoy the trust of government, mana whenua, the Department of Conservation, the electricity sector and the community gained through other projects designed to achieve environmental and commercial requirements.
Cash flow modelling of the NRP, assuming a generator as owner and operator, indicates strong financial viability under a range of scenarios (in the tables $(vert) and $ pa (horiz) are in NZ$1000, $/MWh is NZ$ per megawatt hour, Crown refers to the government).
For some time HDL has proposed that the SPV be formed well before the mining licences expire and the miner quits the site. This has been so that implementation could take place as ancillary work under the rights accorded through the mining licences, and with access to the miner’s resources.
Formation of the SPV prior to the exit of the miner still offers significant opportunities for the SPV, although it is now unlikely that a scheme’s commissioning could occur before the coal mining licences expire and BT Mining quits the site. Benefits of early activation of consents for the Stockton Plateau Hydro Scheme are multi-faceted: it would ensure the SPV played a central role in the transition from mining; relationships with the key stakeholders will ensure investment outcomes are optimised; and planning could commence on downstream industries to mitigate the socio-economic effects of mine closure on the West Coast.