Genesis enters coal exploration

State-owned electricity company Genesis Energy is making a foray into coal exploration though a carbon charge is on the cards and the Government has a green bent.

One of the five big electricity retailers and generators, Genesis has applied for a coal exploration permit for the Mokau coalfield in the King Country.

The permit is a first for the stateowned enterprise, which says its acquisition is part of its long-term fuel development plans. Genesis has the only operating big coal-fired power station in New Zealand, the 1000 megawatt station at Huntly, near Hamilton.

Communications manager Richard Gordon said the coal at Mokau was unlikely to be suitable for the Huntly station. But if the field turned out to be commercial, it could supply a new power plant in the King Country.

The field might take 10 to 20 years to develop. By that time carbon storage technology would be well established.

Genesis is not a coalminer but intended to bring in a partner if the permit area proved to be commercial, Mr Gordon said. The Mokau area had a history of coalmining dating back to early last century.

Genesis was the first of the big electricity companies to chance its arm in gas exploration. It first acquired a big stake in the offshore Kupe gasfield and later sank $15 million into drilling in the Cardiff gas prospect in Taranaki.

Another SOE, Meridian Energy, has been developing only renewable energy, with wind and hydro projects in its plans.

But Mr Gordon said: “We don’t think this is a renewables-only future. We think it’s all about a diverse future.

“It will be interesting to see what the National Energy Strategy says about it.”

The Government’s draft National Energy Strategy, outlining the way ahead for energy development, is expected to be made public next month.

Genesis also owns two hydro schemes in the central North Island and a small wind farm in the Wairarapa, and is close to completing a 385 megawatt gas-fired plant at Huntly.

Commenting on the Mokau gasfield, Mr Gordon said Genesis had followed the same strategy with the Kupe gasfield, buying into that and later bringing in Origin Energy of Australia as a partner to take charge of the development.

Genesis has put forward a work programme for the Mokau permit area which involves a review of all the literature and geotechnical reports on the coalfield ? “a desktop review”. It will also undertake a pre-feasibility study on whether new coal mining technologies would make the area commercial for development.

It is waiting now for Crown Minerals to approve the work programme.