11 September 2006

New Zealand’s energy sector is heating up with new developments in clean energy helping to spark overseas interest.

The need to increase energy sources through renewable supplies is driving new technologies in the area and, in turn, inquiries from potential overseas investors are increasing, says Investment New Zealand Investment Manager Koustubh Gadgil.

One example of a major regional initiative is the New Zealand Clean Energy Centre in Taupo, which recently received government funding. This national centre for clean energy research and technology aims to increase the direct use of clean geothermal and bio-energy resources in new and existing businesses.

The government funding of NZ$2 million, from New Zealand Trade and Enterprise's Regional Partnership Programme, will be provided in three stages over three years, on condition the centre secures another NZ$2 million in funding from the energy industry by the end of this year.

Such initiatives provide overseas investors with opportunities to investigate technologies being developed in New Zealand for the New Zealand market, that could potentially be offered in offshore markets as well, Mr Gadgil says.

“Investment and partnership opportunities presented by the New Zealand energy sector have attracted global interest. More specifically, there has been interest in New Zealand companies looking to harness renewable resources for energy generation for commercial and domestic use."

Popular areas of investment interest include the use of biofuels to reduce dependence on oil, and wind energy, which is steadily increasing in New Zealand.

The number of consents granted for wind farm developments is growing, as is the size of the wind farms themselves. And they are becoming a targeted energy source for New Zealand’s large generation companies such as Meridian, Genesis, Contact and Trustpower.

For example, the Environment Court recently confirmed resource consent to Unison Networks’ 15 turbine (stage 1) Wind Farm project. The second stage of this project involves a 37 turbine wind farm which has been granted resource consent.

Construction could begin next Spring, with the first turbine operating mid 2008 and all turbines fully operational by the end of that year. The Unison wind farms would generate enough electricity to power 56,000 homes every year.

New Zealand is relatively rich in energy and has until recently enjoyed cheap energy which has been attractive for primary industrial processing. The sources of energy in New Zealand are wide-ranging, including gas, oil, coal, hydro and wind.

In early 2005 the New Zealand Government announced the development of a new National Energy Strategy incorporating its commitment to a sustainable and efficient energy future.

The Energy Efficiency and Conservation Authority (EECA) is the Crown entity responsible for helping to deliver the Government’s energy efficiency policy. Its original National Energy Efficiency and Conservation Strategy laid the foundations and removed barriers to the uptake of renewable energy. New Zealand is building on these foundations as its energy situation changes within the global energy scene. EECA is now preparing a new strategy, pushing for more aggressive uptake of renewable energy.

Investment New Zealand recently produced an updated report on the energy sector which provides investors with an overview of the local industry. In a time of rapid change for the energy industry in New Zealand, the report attempts to capture the latest information. It is available from Investment New Zealand.

For more information, please contact:

koustubh.gadgil@investmentnz.govt.nz

+ 64 4 910 4385