origin geothermal

Extract from todays 22-Feb-2011 ORG announcement


http://www.hotcopper.com.au/post_threadview.asp?fid=1&tid=1388033&msgno=6356591#6356591

Origin Energy holds 51.92% of quoted ordinary shares in Contact Energy Limited.

Origin also has investments in Australias developing geothermal power industry.




Comment:

NZ cousins well ahead of us in geothermal energy !

AusGOV needs get to work and catch up !




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Te Mihi geothermal project

Contact also announced today that it had committed to the construction of the 166 megawatt Te Mihi geothermal project. An engineering procurement and construction contract was signed this morning with a consortium of McConnell Dowell Constructors Limited, SNC-Lavalin Constructors Inc, and PB New Zealand. The turbines will be supplied to the consortium by Toshiba International Corporation.

Two units of 83 MW each (with expected net output of 159 MW) will be constructed near the 52 year-old Wairakei geothermal power station, northwest of Taupo.

Once completed in mid 2013, approximately 45 megawatts of the existing Wairakei geothermal station will be decommissioned, resulting in a net increase in output from the combined Te Mihi and Wairakei stations of about 114 megawatts.

The total cost of the project is approximately $623 million which will be funded through a combination of debt and equity. A pro-rata renounceable rights issue will be launched in the near term. Contact's majority shareholder, Origin Energy has advised that it will subscribe for
its share of the rights issue.

Mr Baldwin, says the commitment to Te Mihi reflects the company's view that geothermal is currently New Zealand's most cost effective new base load generation.

"The additional 114 megawatts is expected to be required by the market by 2013 as economic growth resumes, and will also contribute to lowering Contact's average cost of generation," he said.


A period of achievement

Commencing construction on Te Mihi was one of a suite of
achievements the company outlined for the six month reporting period to December 31, and the 2011 year to date.

In addition to Te Mihi, Contact consented two important new generation projects - the 250 megawatt Tauhara 2 geothermal project and the 156 megawatt Waitahora wind project.

"Over the period in review, Contact had three major resource consent processes running contemporaneously. Our focus has been on ensuring that new generation options are developed, consented and ready to execute when conditions are appropriate to do so, and we have achieved that," he said.

Geothermal remains Contact's priority investment Contact expects the 250 megawatt Tauhara 2 plant, to be the next
significant generation market investment following Te Mihi.

"The country needs new electricity generation and, with concern growing about the effects of climate change, and limitations on the availability of natural gas, that electricity increasingly needs to come from renewable sources.

"Geothermal energy is New Zealand's most strategically important energy source. It has a major advantage over other renewable energy sources because it doesn't depend on the weather and as such, is always available to provide baseload electricity," said Mr Baldwin.

The exploration of the Taheke geothermal field near Rotorua, a geothermal project that Contact is developing in partnership with the Taheke 8C and Adjoining Block Incorporation has also made good progress.

In addition to geothermal and wind, Contact is also developing and consenting hydro and new gas-fired project opportunities.


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