Solid Energy has shelved its proposed $300 million-plus coal-fired power station in Buller.

Solid Energy has shelved its proposed $300 million-plus coal-fired power station in Buller.

The 350 megawatt station now looked ”marginally economic”, Solid Energy chief executive Don Elder said.

There was no prospect of a Buller plant being operational in 2008, as originally planned. Solid Energy had better prospects, with better returns and less uncertainty, Dr Elder said.

”It’s just not a priority for us. We’ll leave it on the shelf and keep revisiting it once a year or so. But if somebody else wants to take the lead on it, we’ll be delighted to support them.”

Dr Elder said the electricity industry was uncertain about transmission, benefits and costs to consumers, and the cost of carbon emissions.

Electricity retailers had shown limited interest in contracting power from the station proposed for Birchfield, 21 kilometres northeast of Westport.

”Some came back with offers, but they weren’t great offers. Others gave us mixed offers that weren’t very meaningful. In the end we said, there’s not enough certainty for us to go ahead.”

Solid Energy had also failed to find a partner to build the plant. One overseas company had been interested, but it too had decided to park the idea and follow other prospects.

He said even if the Buller plant were to go ahead, it would not be operational before 2010.

Dr Elder believed that the project would proceed ”at some point”, however. ”I think it’s the right project for the South Island and the right project for New Zealand, and most people in the electricity sector do as well.

”A lot of people are waiting to see where the energy strategy goes, where climate change policy goes . . . After all that’s shaken down everybody will look at their projects again.”

The Government is expected to announce plans to stop the building of new coal, gas or oil-fired power stations unless they are needed to prevent an energy crisis.

Ministers will present a farreaching draft strategy today for curbing greenhouse gas emissions.

But Dr Elder said he would be surprised if the strategy did propose a ban on coal-fired power stations.

He expected it would reflect interest in low-cost wind generation, and that eventually significant generation opportunities would be split between low-cost coal, gas and wind.

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