Didymo is spreading in the upper Waitaki canals, used by Meridian Energy to feed water to its power stations.
However, the infestation is not bad enough to pose a risk to Meridian's electricity generation from the four power stations fed by the canals - Tekapo B, Ohau A, B and C.
The growing area of land being farmed intensively in the Upper Waitaki is being advanced as a reason for the spread of didymo.
The National Institute of Water and Atmospheric Research (Niwa) has regularly sampled didymo in the canals for Meridian since the invasive algae was discovered in 2007.
The latest results, from sampling in November and December, have been made available in evidence to an Environment Canterbury (ECan) panel considering 110 resource consent applications to take, use and discharge water west of the Waitaki dam.
The hearing is due to end at the end of next month.
Those applications include water for 16 new dairy farms carrying up to 17,850 cows in the Omarama and Ohau areas proposed by three companies.
Meridian's legal counsel, Jo Appleyard, told the panel the most recent results covered the Tekapo, Pukaki and Ohau canals and the Wairepo Arm of Lake Ruataniwha.
Didymo continued to proliferate in areas more likely to be subjected to increased nutrients from land intensification arising from irrigation.
The Niwa report said didymo was first found in the Ohau C canal in April 2007.
Recent sampling confirmed it was now in all upper Waitaki canals.
"At present, didymo biomass has not reached a level that would be considered a risk to Meridian's operations in any of the upper Waitaki canals," the report said.
Didymo continued to proliferate in areas where there was a nutrient input, such as downstream from salmon farms.
Growth in the Ohau C canal - the last section of canal and power station before water went into Lake Benmore - was initially slow, with localised hot spots.
However, in the past year, the algae had started to flourish.
"Given that all other factors influencing growth have remained consistent, it is plausible to suggest recent land-use intensification has resulted in increased nutrient inputs via groundwater," the report said.
In the Pukaki and Ohau (from Lake Ohau) canals, which had no additional localised nutrient input sources, didymo biomass was low to almost non-existent, with no "hot spots".
However, didymo proliferated around the shoreline of Lake Ohau, indicating potential for growth in the Ohau canals.
In the Tekapo canal, didymo growths continued to expand, the report said.
