Fraser hydro plan on hold

An uncertain regulatory environment has contributed to a delay in making a decision on a $15 million to $20 million Central Otago hydro-electric scheme.

The proposed scheme on the upper Fraser River near Alexandra has gained the resource consents needed but no decision has been made yet on the future of the project.

Pioneer Generation, now renamed Pioneer Energy, sought resource consents from the Central Otago District Council and the Otago Regional Council for the hydro scheme last year and has gained the necessary consents, Pioneer chief executive Fraser Jonker said.

‘‘There's quite a few things to work through with a few of the stakeholders and it's also an uncertain regulatory environment at the moment so no decision has been made yet on if or when it will proceed,'' he said.

The run-of-the-river scheme planned included a low weir, up to 4m high, a power station and pipeline, and would generate enough electricity annually (30gigawatt hours) to power 3500 homes.

At a district council hearing in May, Pioneer civil engineer Tony Jack said the power generated at the upper Fraser would be about 12% of Pioneer's generation capacity at that time.

The site is about 13km west of Alexandra and the scheme would be located mostly on Earnscleugh Station Holdings Ltd land, with some components within the river bed and marginal strip of the Fraser River.

Pioneer already generates power from the river and planned to upgrade the existing scheme on the lower reaches of the river.

The two Fraser schemes would operate independently.

The Electricity Authority is reviewing some of its regulations which could affect power companies' distribution activities, Mr Jonker said.

‘‘Some of the proposals could have a very serious impact on our projects generally.

The impact will be huge on smaller players as well, but the review proposals have quite serious consequences for us and other larger companies too.

‘‘Until we get some decisions [from the authority], we will be treating investments a bit more cautiously. Any decisions from the authority could take effect immediately, with no phase-in period, so we need to take that into consideration too.

‘‘We need to see how it goes ... We'll have to ask: is the project on its own viable and can we afford to invest in it.''

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