Contact Energy is currently constructing a new $NZ250 million ($A198 million) gas-fired peaking power station in Stratford, to be located next to the company’s existing Taranaki combined-cycle power station.

The foundations for the large concrete slab that will support the proposed Stratford Power Station’s two new fast-start peaking generator units are ready to be poured, and the vast majority of the piles are now in place.

The gas-fired generator units, sourced from General Electric (GE), will be capable of producing 200 megawatts once complete and are set to provide high efficiency and flexibility.

The units will be capable of reaching full load capacity in less than 10 minutes from a cold start, compared to around 4–12 hours for a combined-cycle power station. This makes the units ideal for meeting peak demand periods either when demand is very high or when other sources of generation such as wind and hydro are not available.

To maximise the flexibility of these peaking units, a flexible supply of natural gas is needed. This supply will be provided by Contact’s underground Ahuroa Gas Storage Project.

Gas storage underground

Contact is currently in the process of pumping natural gas into the depleted Ahuroa Gas Field, which is situated onshore in the Taranaki Basin, and close to the site of the Stratford peaking project.

The gas injected into the depleted field will come from gas purchased by the energy retailer under ‘take or pay’ contracts. Contact said that previously this gas would have been used to generate electricity.

The company has said that the lack of flexibility in current gas supply contracts leads to gas being used to generate electricity regardless of whether market conditions support its use. In other words, gas is used in unfavourable conditions, such as when the wholesale electricity price is low or when there is plenty of wind and hydro electricity capacity.

Contact spokesperson Jonathan Hill said “The development of the gas storage facility will allow us to turn off our gas plants when they’re not needed and store the gas for use when market conditions support it without penalty. This ensures the most efficient use of the gas and provides a more environmentally friendly outcome.”

The gas storage project began construction in December 2008 and is set to be the first of its kind in New Zealand. The development and injection of gas is set to continue throughout 2009.

“Being able to store natural gas underground will allow Contact to accumulate gas during off-peak periods, such as the summer, and use it during times it is most needed, such as during winter,” said Mr Hill.

The storage project’s completion should coincide with the end of construction of the Stratford peaking project, which is scheduled for winter next year.

A flexible and efficient solution

“The peaking project, alongside the gas storage facility, will give Contact real flexibility in its electricity generation and allow the company to use the peaking units, and its natural gas resources, with maximum efficiency,” Mr Hill said.

Contact said that these projects will benefit New Zealand through increased security of energy supply, make best use of the country’s valuable natural gas resources and provide important investment and employment in the Taranaki region.