Bridges' future unaffected
By Helena de Reus, on Friday 4 May 2012
Otago Daily Times
Contact Energy's recent announcement it is shelving plans for further development on the Clutha River will not affect the future of two Clutha bridges.
The 124-year-old bridge at Beaumont and the Clydevale Bridge, both one-lane bridges which span the Clutha River, are scheduled for replacement or upgrading.
Earlier this week, Contact Energy announced it had withdrawn plans for further hydro development on the Clutha River and it would review management and ownership of its land holdings near the river.
A search of property records by Clutha District Council staff showed Contact Energy held 37 properties in the Clutha district totalling 2989ha and with a capital value of $26.3 million (figures from 2008). It is unclear how much of this property was earmarked for use in potential dam projects at Beaumont and Tuapeka Mouth.
New Zealand Transport Agency acting Otago-Southland state highways manager Ian Duncan said Contact Energy's recent announcement it was shelving plans for the Clutha River would not make the replacement bridge at Beaumont a higher priority.
Mr Duncan said the agency was still looking at building a new bridge at Beaumont in the 2017-18 financial year. Investigation work was scheduled to begin by 2014.
The Beaumont Bridge is funded solely by the NZTA.
Clutha District Council district assets manager Jules Witt said the Clydevale Bridge already had "reasonably high priority" with the Otago Regional Transport Committee and he did not believe the bridge would have been affected even if Contact Energy's developments had gone ahead.
Last year the Clutha District Council decided to upgrade the Clydevale Bridge to class 1 load capacity. Strengthening the bridge to class 1 would cost about $974,000. The council's share was estimated to be $390,000. NZTA would foot the remainder of the bill. The decision whether to build a new bridge would be reconsidered in 20 years.
Mr Witt said the council had budgeted for the strengthening and repairs in the 2012-13 financial year.
Saturday, May 5, 2012
Bridges' Future Unaffected
Thursday, May 3, 2012
Call For Ethical Repatriation Of Land
Call for ethical repatriation of land
By Marjorie Cook, on Thursday 3 May 2012
Otago Daily Times
Contact Energy's review of its Clutha River land bank has sparked calls for the electricity generator to be a "responsible corporate citizen" and repatriate land ethically, while securing critical public access easements.
Contact Energy confirmed this week it had withdrawn plans for further dams on the river and would include its land holdings in a review of its $100 million national property portfolio.
Contact group communications manager Janet Carson yesterday declined to comment on the value and size of the Clutha portfolio, but confirmed "all the land was inherited" from Electricity Corporation of New Zealand and "includes parcels in the Clutha, Central Otago and Queenstown Lakes regions".
The holdings would be "sold as appropriate over time" and there was no end date for concluding the process, Ms Carson said.
The Otago Daily Times understands Contact Energy owns 95 properties in the Central Otago and Queenstown Lakes districts and another 40 in the Clutha district.
They include everything from farms to town sections.
It is also understood some of Contact Energy's larger properties around Beaumont are in discussion and valuation for sale back to farmers, while smaller properties nearer the waterline are believed not to be on the market.
Clutha River Forum co-ordinator Lewis Verduyn, of Wanaka, said yesterday the land bank review "has the potential to become a highly contentious issue" and warned how Contact proceeded could "stir up further resistance, or calm the waters".
"Much of the approximately 4400ha of land held by Contact along the Clutha was seized in the 1980s and some has subsequently been leased or rented back to the original owners, who have been subjected to a considerable cost.
"These people were literally made tenants on their own land, and they could now be shafted again if Contact opts for a quick capital sell-off.
"Long-term tenants are in a similar situation, having invested in their leased properties, while for many years their corporate landlord ignored them.
"But Contact could also act as a responsible corporate citizen by building community relations through the ethical repatriation of land.
"The occupants of this land, including farmers, should be able to purchase it on fair terms that acknowledge their investment in it.
"Such terms should include the option to purchase on a lease-to-own basis, with consideration given to the significant moneys already paid.
"Much of the Contact land within the river corridor is also critical to public access and should be vested in the conservation estate to be managed by Doc, along with adjoining public conservation lands.
"This would add considerable surety to the viability and success of river trails presently being constructed by community groups.
"All this could be done while retaining rights for future hydro development, though I can't envisage that happening," Mr Verduyn said.
Upper Clutha Tracks Trust chairman Tim Dennis, of Wanaka, said yesterday Contact Energy had supported the trust's projects and provided access easements.
It was now time for anyone with informal public access across Contact Energy's land to "shore up" those easements, he said.
"But I can't imagine they will get rid of their land any time soon.
"They might decide they want to hold on to it for another 10 to 20 years.
"The consenting environment might change, the energy demand might change.
Once it is sold, it will be hard to get it back," Mr Dennis said.
Otago Federated Farmers president Mike Lord, of Outram, said farmers would be "waiting with interest" to see what Contact would do.
"These things can take quite a bit of time and it is not going to be a quick process.
"A lot of that land is leased out and not all the leases will expire tomorrow.
"It is an opportunity for those lessees to be able to buy in, too," Mr Lord said.
Former landowners who felt squeezed off the land might now feel some bitterness and it might well be that land could be offered back to those people, he said.
Other options might include selling the entire Clutha portfolio at once to another power generator, such as Meridian, entering into sale agreements with lessees, putting the land on the open market or offering it in a ballot, he said.
"If I was Contact, I would be looking for the best value that I could. I would be looking at all the different options," Mr Lord said.
Mr Lord said it would be prudent for Contact Energy to finalise access easements before selling the land, to avoid problems down the track.
Wednesday, May 2, 2012
Windfall For Contact Shareholders
Windfall for Contact shareholders expected
Tuesday 1 May 2012
TVNZ ONE News
Contact Energy shareholders can expect a substantial boost to cash flow from 2014 onwards as the company completes geothermal projects, winds back major capital spending and seeks to sell some of its $100 million of development land holdings.
The company's decision to all but abandon long-held hydro-electricity developments on the Clutha River was part of a wider drive to strip capital project costs out of the business for the time being, said chief executive Dennis Barnes.
Contact cited weak national electricity demand, the challenge of gaining resource consents and better options elsewhere for putting on ice hydro-electricity projects that could potentially double its output from the Clutha River, and beginning a process of selling land holdings in the area.
The Clutha options were not commercially viable "in the foreseeable future".
Contact already has 752 MW of installed capacity at the Clyde and Roxburgh hydro stations on the Clutha, and inherited options for developments at Tuapeka Mouth, Beaumont, Queensberry, and Luggate totalling 763MW when it was corporatised in the mid-1990's.
Since then, the company has periodically examined its Clutha options, while fending off criticism from local communities that a lack of clarity about its plans was impeding economic development.
A review of calculations last made in 2008 had shown roading infrastructure costs would be far higher than originally estimated, while the size of each project was too large to consider building for the foreseeable future.
Asked whether the decision signalled the end of "big hydro" in New Zealand, Barnes said: "I don't believe so, but I can't answer the question for 15 to 20 years."
It would be 2025 "at the earliest" before any of the Clutha options made sense to re-examine.
"We will stop spending money on it," he said. "Project development pipelines need to show a return and we needed to take the community to an honest point.
We decided we wouldn't do any work for seven, eight or 10 years, and it was fair to tell them that."
Contact also had more attractive geothermal and wind development options than any of its large hydro prospects, although it has extended for one year its resource consents on a small hydro scheme attached to the control gates on Lake Hawea, the only controlled storage lake on the Clutha system.
Barnes said one of his chief tasks in the last year had been to strip out capital development costs from the business, and to start implementing a more active land management policy to rationalise the company's approximately $100 million portfolio of development and other land holdings around the country.
The Clutha decision is still a step away from complete abandonment, with Contact proposing in some cases to sell land with encumbrances either to allow a future hydro development or preventing sale to a competing hydro developer.
"A dammed river is a very significant energy resource and will have a value over a timeframe," he said.
The company is taking a similar approach to land purchased for its mega-wind farm development in the North Island, on the coast north of Raglan, selling property with a future development right attached.
Contact owned only about 20% of the land it required to build any of the proposed Clutha dams.
No decision had yet been made on exactly how much of its land holdings would be marked for disposal, Barnes said.
He conceded also that resource consents in the lower South Island were likely to take longer and be more costly to obtain than in some other parts of the country.
"Our view is that if you take your time and are transparent, they are consent-able," he said. "But in that part of the country, the community conversations take longer and cost more. It's different from Wairakei, where the community embraces geothermal development."
Barnes said that once the 166MW Te Mihi geothermal plant was completed in 2013 that would bring to an end four years in which Contact had committed an average of $500 million of capital annually.
"It will drop to $100 million or less. The balance goes to cash flow. You will see that very strongly in 2014."
Contact shares traded unchanged at $4.85 on the NZX and have declined about 8% this year.
Contact Should Atone: Resident
Contact should atone: resident
By Lynda van Kempen, on Wednesday 2 May 2012
Otago Daily Times
Beaumont resident Margaret Healy says she can finally "chuck away the snorkel" after living for years with the threat of the area being flooded if a hydro dam was built on the Clutha River nearby.
Contact Energy announced on Monday it was dropping its plans for further hydro development on the river, saying none of the options for dams at Beaumont, Tuapeka, Luggate and Queensberry were viable "in the foreseeable future".
Beaumont residents and former residents who opposed further hydro development on the Clutha welcomed the decision as "long-awaited and absolutely marvellous", said Mrs Healy, who is the secretary-treasurer of the Beaumont Residents Group.
It had been daunting to live for the past 20 years with the prospect of a dam that might flood the area "hanging over" them.
Contact owed Beaumont some compensation for the impact that uncertainty had had on the community, she said.
"The threat of the dam has changed the whole area and influenced a lot of things over the years, including the population in the area. The local shop closed as well as the school, and people stopped buying land here and took out orchards. We feel Contact owes us some compensation to make up for all that."
Compensation could take the form of the community being "gifted" the former shop building, which was owned by Contact, or the company could contribute to a new roof for the Beaumont Hall, Mrs Healy said.
Asked whether Contact would offer any "compensation" to Beaumont, Contact group communications manager Janet Carson said: "We're part of this community and contribute where we can.
"We have been working with locals about the shop for some time and will continue to see what's possible.
"We have also, just today, received a request for assistance with other [Beaumont] community-related matters, which we are also considering," she said.
Contact was involved in community projects throughout the region but the contributions it made should not be viewed as "compensation", she said.
Mrs Healy said Beaumont was a special place and she had received a steady stream of emails and phone calls yesterday from people saying they were "delighted" at the cancellation of the dam plans.
"Lots of them were people who used to live here.
"One even said, 'Hooray, I can still be buried in the Beaumont cemetery when I die'."
Under the proposal for a dam at Tuapeka Mouth, the cemetery would have been flooded, along with the Beaumont township.
Mrs Healy and her husband have lived on a 0.4ha block of land near the Beaumont bridge for the past 35 years.
Plans for a Tuapeka dam were first mooted in 1965 by Contact's predecessor, the Electricity Corporation of New Zealand, and the project has been reconsidered several times since then.
"It appears that threat of a dam has been virtually removed now that Contact is concentrating on other energy projects like geothermal projects," Mrs Healy said.
"We used to joke we'd be well under the water here and we'd need a 30m snorkel ... well, now I can chuck away the snorkel."
There would be nothing holding back progress in the area now that uncertainty was gone, she said.
People would be able to plan for the future and buy and sell land freely.
Decision On Dams No Surprise
Decision on dams no surprise
By Lucy Ibbotson, on Wednesday 2 May 2012
Otago Daily Times
Contact Energy's decision to drop its hydro development plans for the Clutha River has come as no surprise to local government leaders in the district.
Clutha Mayor Bryan Cadogan had been "semi-aware" of Contact's intentions for some time.
He said the prospect of dams on the Clutha River had "polarised the community", and it was good to have some closure on a long period of uncertainty.
"I suppose if nothing else it gives certainty now for the future because for so long we've been saying 'Imagine if the dam happened' ... It's better to be dealing with the facts and move on with reality ... so onwards and upwards."
Mr Cadogan said there would never have been a "ready acceptance" of hydro development from the community if the project had proceeded.
"To have development in the district is something that we're always looking for, but it's got to be the right development and it's got to have community support."
The news Contact had cancelled its dam plans was not unexpected for Central Otago Mayor Tony Lepper, either.
"Only because I thought they were expensive power projects to go through with and obviously they've come to the same conclusion," he said.
"It's probably disappointing to miss out on the economic benefits, but I'm sure there's other economic benefits to come out of that river and we'll just have to make the most of those."
Mr Lepper said on a personal level, he was "rapt" there would be no dam proceeding at Luggate, where he regularly kayaked.
"I think that's one of the nicest stretches of river in New Zealand and I play on it all the time.
"I'm very pleased that it's going to be around for a bit longer."
Queenstown Lakes deputy mayor Lyal Cocks said the decision was "appropriate", based on information Contact had provided throughout the process and the division the dam proposals had caused within the district's communities.
"It's been an issue that we've been on the edge of for a while watching the progress ... I think it's an appropriate decision looking at the way the numbers stack up as they've [Contact] indicated to us."
He said there were other options for power generation that were more feasible
Contact Ditches Clutha Hydro Plans
Contact ditches Clutha hydro plans
By Che Baker, Tuesday 1 May 2012
Southland Times
Contact Energy has announced it will no longer proceed with developing hydro generation on the Clutha River.
Contact chief executive officer Dennis Barnes said investigations during the past three years at four different sites along the river, at Queensberry, Luggate, Tuapeka Mouth and Beaumont, have shown none of the options was viable.
"It has become clear that all future Clutha hydro options came in at a much higher cost per megawatt to build than the next available new geothermal and wind generation options,'' Mr Barnes said.
The decision to stop development of the hydro options was based on an assessment of the economics of each option and took into account a range of technical, environmental, social and cultural factors, he said.
As part of Contact's land management strategy, it will be reviewing its land holdings near the Clutha River.
Tuesday, May 1, 2012
Contact Pulls Plug On Dams
Contact pulls plug on dams
By Lucy Ibbotson, on Tuesday 1 May 2012
Otago Daily Times
Contact Energy has withdrawn plans for further hydro development on the Clutha River and will review management and ownership of its land holdings near the river.
The decision, announced yesterday, comes after Contact signalled in February delays in its plans to develop a new hydro-generation facility on the Clutha River, saying the project was on the "back burner" and geothermal energy remained a priority.
Contact spokeswoman Janet Carson said at the time the four Clutha hydro-development options, at Tuapeka Mouth, Beaumont, Queensberry and Luggate, "remained open", but were "more likely to be further down the track, probably into the next decade".
Contact announced in 2008 it was revisiting plans for dams on the upper and lower Clutha, costing between $300 million and $1.5 billion, which were originally proposed more than 20 years ago by its predecessor, the Electricity Corporation of New Zealand.
Contact hydro projects manager Neil Gillespie confirmed last night he had notified "as many of the stakeholders and people that we've talked to over the last three years" of the formal decision to end the Clutha hydro-development project.
"Contact has decided not to proceed with any of the options being investigated for hydro-generation development on the Clutha at this time and has ceased all work pertaining to it," Mr Gillespie's email yesterday to affected parties said.
However, he told the Otago Daily Times last night he could not permanently rule out hydro development on the river, as "who knows what the future holds".
Contact will now review future management and ownership of all its land holdings near the Clutha River as part of its ongoing land management strategy.
Mr Gillespie was unable to provide details on the extent of that land, but confirmed selling it was "one of the options that could come out of [the review]".
In a media statement, Contact chief executive Dennis Barnes said the company's investigations during the past three years had shown none of the options considered were viable for development.
"It has become clear that all future Clutha hydro options came in at a much higher cost per megawatt to build than the next available new geothermal and wind-generation options. On current demand forecasts, the Clutha options are not economic in the foreseeable future," Mr Barnes said.
"Contact has a range of new generation in the pipeline, either confirmed, consented or under construction, to meet foreseeable electricity demand for our customers."
Clutha River Forum, an alliance of river and conservation groups opposed to "think-big" hydro development on the Clutha, was set up in 2009. Forum co-ordinator Lewis Verduyn, of Wanaka, said yesterday's announcement was not a surprise.
"For some time now, we have known that New Zealand energy companies have been experiencing a low-growth environment in the wake of the global financial crisis," Mr Verduyn said.
"Consumers are cutting back, capital costs remain high, lake storage levels remain erratic, and there is now sufficient new generation either coming online or consented for some years ahead.
This decision, then, must be welcomed as a sensible one for Contact shareholders and river communities alike.
"What we need most now are energy-smart technologies, since efficiency is less than half the cost of new generation. It would be reasonable to say that unless we return to pre-2008 economic growth, which isn't going to happen, that the era of large dams is over."
Mr Gillespie declined to comment about how much Contact had spent developing the Clutha project, as it was "commercially sensitive".
