Contact Energy began presenting its case yesterday in the Environment Court for the Mahinerangi wind farm. It seeks two conditions on the consents granted - upgrading the lines capacity at both the Roxburgh dam substation and the Roxburgh-Naseby line.
The conditions have been dismissed by TrustPower as an attempt to eliminate competition.
Contact Energy has said it has been forced to spill water at Roxburgh because of line constraints, and said this would only increase should the Mahinerangi wind farm and the Project Hayes wind farm come on line.
Contact Energy counsel Kerry Smith said, in his opening submission, the company's management of the constraint brought no financial windfall.
He said Contact was not asking to impose a condition requiring TrustPower to upgrade the electricity system.
The condition was to ensure upgrades were sufficient to accommodate the increased generation that would be provided, Mr Smith said.
TransPower had indicated an upgrade for the Roxburgh-Naseby line through to the Waitaki Valley was on the cards, but Mr Smith said such upgrades would be a slow process, taking many years.
The spill of water, because of line constraints, was an adverse affect.
An offer to fix the problem at the Roxburgh dam sub-station by buying a $4 million machine in 2004 never got past the discussion stage, he said.
Computer model analysis by Contact Energy witness Toby Stevenson showed the constraint on the Roxburgh-Naseby line would swell to 1061GWh hours in 2012, in a mean hydrological year.
That figure could be compared to the expected annual output of the Mahinerangi wind farm of between 630GWh and 788GWh hours.
The model included generation from both the Mahinerangi wind farm and Project Hayes.
The company was not concerned about competition, but having to spill water which would otherwise be used for generation.
Wind Developments (Australia) Ltd counsel Don Turley said Contact Energy's suggested condition would set a dangerous precedent for wind farm developments in New Zealand.
Clutha District Council counsel Phil Page said it was a matter of common sense TrustPower was not going to invest $400 million in a wind farm and not be able to send the power anywhere.
The case seemed to come down to who was going to pay for the upgrade.
Meridian Energy counsel Andrew Beatson said Contact Energy's condition sought to protect its current levels of access to the electricity market from being reduced by another competitor's entry into the market.
Constraints in the electricity transmission grid were a fact of life and a normal part of of the operation of the electricity market, he said. Constraints helped planning for transmission investment.
Such a condition would result in market interference and might prevent an upgrade occurring.
With a second series capacitor upgrade in place, with no new transmission line, the estimated combined output of Mahinerangi and Project Hayes, at 830MW could be accommodated with a minimal spill of water, Mr Beatson said.
