AN ENERGY farm harnessing the power of strong tidal currents at the entrance to the Kaipara Harbour in Northland looks likely to be the first new marine energy kid on the block by winning the government's initial funding package for a new field of renewables.

But the $1.85 million to help Crest Energy deploy three turbines in the main harbour channel immediately off the north head pales into insignificance against the $600m the company expects will be needed over the next decade.

Crest Energy director Anthony Hopkins said the grant from the Marine Energy Deployment Fund was a great fillip for the company, and would help kick-start the first phase.

"However, whether you're talking money, consents or technology, there is still a lot of work to be done," he said.

The significance of the grant to Crest lies in part on the condition that resource consents are secured and money put in place to complete the first stage.

Energy Minister David Parker said there was "a degree of confidence" that Crest would meet both conditions.

Coincidentally with the grant this week, Crest's application to the Northland Regional Council for resource consents was being heard before commissioners in Whangarei. The hearings wound up on Friday.

Ultimately, Crest wants to put in place 200 turbines on the harbour floor, where the tide flows at 9km/h at its peak, to generate 200MW of power.

The first turbines could be in place by 2010, providing power to the remote population on the Pouto peninsula.

But it could be another five years at least before the tidal energy project, which will have the capacity to supply all of Northland's power and more, is contributing significantly to the national grid.

However, even that prospect provides some small cheer for industrial and residential electricity consumers as they face the third winter this decade when the lakes are empty, the wind isn't blowing, and power shortages loom.

The commissioners have a month to send a recommendation to the conservation minister, who has six weeks to decide.

Then there is the prospect of objectors taking the matter to the Environment Court.

Hopkins said that although Crest could do nothing to speed the consent process, it was already active in targeting financial backers.

The company was talking with some very large European banks which had significant investments in renewable energy, as well as local electricity market participants.

Discussions are also being held with local infrastructure companies which could build the turbines, and who want to do more than just sub-contract, said Hopkins.

The company was also not ruling out the prospect of raising money through public listing, including in New Zealand.

"The issue here is the appetite of local investors for this type of project, but there are exchanges in the UK (Aim), Toronto and Europe we could target," he said.

Coincidentally for Crest, last week was the first hookup to the British national grid of a tidal turbine generator designed and manufactured by the company which is Crest's "most likely" supplier of technology.

After 18 months' testing, Ireland-based OpenHydro successfully generated tidal power to the electricity grid in Scotland on Wednesday. OpenHydro has also been picked by the government of Nova Scotia in Canada to get the first shot at testing their tidal generators in the Bay of Fundy, which has the highest tides in the world.

The mantra has been it will be 10-15 years before marine generation will contribute significantly to global electricity grids. But Hopkins said OpenHydro's success last week demonstrated things were speeding up.

"You don't hook up to national grids casually. The trials are over, this is real stuff," he said. Crest plans to use OpenHydro technology to build tide turbines in New Zealand under supervision.

While there are nearly 20 marine energy projects being worked on in some shape or form in New Zealand, only two others besides Crest are of significance so far.

And in some respects Christchurch company Neptune Power and Wellington-based Wave Energy Technology (WET) are even further down the track than Crest.

Neptune already has resource consent to install an experimental turbine in Cook Strait this summer. Director Chris Bathurst said his company applied for a grant, even though it has not yet got the $17m funding in place.

Bathurst was confident tests on the turbine in Scottish waters would be complete within weeks and prove the technology to allow the New Zealand trials to begin.

The WET project, a consortium of Industrial Research Ltd (a Crown Research Institute), Niwa and a private company, Power Projects, has already tested an experimental wave device in Lyttelton Harbour, and will demonstrate another in Evans Bay in Wellington on Thursday.

The device, which extracts energy as a buoy responds to surface wave motions and pivots against a submerged platform, was home-grown technology for which patents were being sought, said WET developer Alister Gardiner. 

A fourth prospect for New Zealand is a giant sea snake-like structure which floats semi-submerged and generates electricity as hinged joints rock against each other.

The huge Pelamis devices go into commercial operation in Portugal this summer, and Auckland-based Power Generation Projects has been talking with a British company about their use in New Zealand waters.

But John Huckerby, executive officer of Awatea Wave and Tidal Energy Association, said the Portuguese project was commercial only because of the feed-in tariffs provided by the Portuguese government.

Feed-in tariffs come in the form of a supplementary guaranteed price given to marine-generated power providers on top of the market price they receive.

Parker said feed-in tariffs would certainly mean an earlier introduction of marine energy for New Zealand. But it would be at the cost of much cheaper wind and geothermal renewables already in place.

Hopkins said work done by Crest placed the short-run cost of marine energy as dearer than hydro or wind, but cheaper than fossil fuels.

Source: stuff.co.nz 

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