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Pioneer Generation wants the door left open for hydro development, even though it has "no present plans" to establish a power station on the Nevis River, a hearing in Cromwell was told yesterday.
If such a scheme proceeded, most of the power generated would go to the Central Otago and Southern Lakes area, Pioneer chief executive Peter Dowling said.
Queenstown had a growing demand for electricity and a hydro scheme on the Nevis would help secure the supply into that area.
Giving evidence before the special tribunal deciding the fate of the Nevis River, Mr Dowling said the Nevis was an attractive option for electricity generation, but Pioneer was "not yet in a position" to make a resource consent application.
The tribunal, appointed by the Ministry for the Environment, will decide whether an amendment should be made to the existing water conservation order on the river.
The New Zealand and Otago Fish and Game councils have applied to change the order so damming the river is banned.
Pioneer owns the leases of two farm properties on the banks of the Nevis, Ben Nevis and Craig Roy, and both leases are subject to the tenure review process.
The company may freehold the land it needs for any hydro development in exchange for handing over some of the property to become conservation land.
Under the existing water conservation order, Pioneer would be able to apply for resource consents for a dam.
However, if the order is amended, the company will not be able to proceed with its plans for the river.
Mr Dowling said Pioneer owned 12 small power stations in Otago and Southland.
When the new Kowhai scheme on the Teviot River was operational, the generation capacity would be about 36MW.
A scheme on the Nevis would generate between 35MW-45MW, which meant the company's energy output would double.
"Pioneer Generation is interested in pursuing options for potential development on the Nevis River but it has not chosen one option over any other option; nor has it made a commercial decision to attempt to proceed with a hydro scheme," Mr Dowling said.
Two broad options for schemes were available.
One was a small intake dam and reservoir flooding back into the Nevisburn Creek, transporting water via a tunnel and penstock to a powerhouse on the bank of the Nevis, upstream of the confluence with the Kawarau River.
The second option was similar but included a storage reservoir above Nevis Crossing, which created a storage lake up to the area of the confluence with Schoolhouse Creek.
The existing water conservation order on the river was appropriate and Pioneer believed it would take a substantial effort to obtain the appropriate resource consents for a hydro scheme, he said.
Asked by tribunal chairman Richard Fowler if the company had "other sites in its larder" for hydro development, Mr Dowling said there were some others.
However, there was no other piece of land the company was considering for such a development that it already owned, or leased.
Pioneer's asset manager, Peter Mulvihill, said preliminary investigations showed a small hydro-electric scheme on the river was viable but that was subject to the final conditions of consent.
It was also dependent on the outcome of tenure review.
More than engineering matters would govern the final form of any scheme, he said.
Environmental, recreational and social aspects would also play a part.