2 February 2010
Solid Energy seeking consents for a hydro scheme at Stockton

Solid Energy has applied for resource consents for a hydro-electricity generation scheme using water from its Stockton Mine in Buller. Capable of powering 22,000 homes, the scheme would enable the West Coast region to become self-sufficient in electricity.

Like others on the West Coast, Solid Energy believes the region can benefit in a range of ways from locally sourced electricity. The company says Stockton has the water resource to generate 176GWh of renewable electricity a year but any scheme has to be properly integrated into its main business of coal mining. Its anticipated benefits also include further improvement in the quality of water in the nearby Ngakawau River above the improvements already coming from Solid Energy’s extensive water quality programme at Stockton.

A Westport-based group, Hydro Developments Ltd (HDL), recently gained consents for a hydro proposal using the same water from Stockton. However, based on the information presented to date, Solid Energy has major concerns that the HDL scheme will be unable to meet some or all of Solid Energy’s expectations.

These include that any hydro scheme must not interfere with future Stockton operations, must guarantee the mine’s current ability to effectively manage the plateau’s water resource, must be technically and financially credible and assured of proceeding, and then should be the best hydro scheme for water from the plateau. Solid Energy says it is willing to talk with HDL about a land access agreement but any agreement will be subject to meeting all these expectations.

Solid Energy’s Chief Operating Officer, Barry Bragg, says, “We believe that our scheme is a better fit with our coal mining plans and environmental commitments at Stockton. At this stage we have no information that says HDL will be able to meet our expectations, or if they do, whether they have a viable project that is the best for the Stockton plateau. That’s why we believe it is important to progress our scheme to provide the maximum likelihood for the Buller community and for the New Zealand electricity system that a good hydro project at Stockton will proceed.

“Solid Energy’s core business and expertise at Stockton is coal mining and while we might retain an interest in progressing our hydro scheme, we don’t see ourselves as retaining a primary role in financing, building or operating it. We’d look to other parties who have more expertise than we do in this field.

“Because HDL has not to date been able to demonstrate to us that its project will meet our expectations, and may not be able to in the future, we will appeal their consents to the Environment Court to protect our position,” Mr Bragg says. “If, however, HDL can address our concerns, then I’d expect our appeal could be settled.”

Stockton Mine, operated by Stockton Alliance, is Solid Energy’s most valuable operational coal mining asset, delivering high-quality steel making coal for export. Stockton’s output underpins KiwiRail’s Midland Line and contributes to the business of Lyttelton Port of Christchurch. Directly employing approximately 600 people through the Stockton Alliance, Stockton has sufficient economically recoverable resources to continue producing for at least another 20 years.

Solid Energy has created a project website – www.stocktonhydro.co.nz – which has information about the scheme and the resource consent process.

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