Mercury confirms $220m Nga Tamariki geothermal station expansion

Mercury says it will add a fifth generating unit at its Nga Tamariki geothermal station, boosting generation output by 46MW (390GWh annual

The expansion will cost $220 miillion (excluding capitalised interest, geothermal drilling of  about $35m and sunk costs of $3m), part of the signalled total commitment of up to $1 billion investment in generation expected in FY24 by Mercury.

The fifth unit’s net capacity is 50MW. After reconfiguring the site, the net output for the full station increases by 46MW, increasing generation by about 390GWh annually –  equivalent to an additional 55,000 households.

The project has been developed with support from Mercury’s commercial partner Tauhara North #2 Trust, while Mercury has executed contracts for engineering, procurement and construction with global geothermal manufacturer Ormat.

Construction will start early next year, with first generation expected in late 2025.

“This investment is the first wave of the $1 billion we expect to commit this financial year to generation development we will construct over the next three years,” says Mercury chief executive Vince Hawksworth.

Tauhara North No.2 Trust group chief executive Mana Newton says; “These improvements enable us to provide more benefits to our whanau and contributes to our 100 year plan of a more sustainable and efficient relationship with Papatuanuku.”

The expansion in renewable generation development projects is expected to go to final investment decision (FID) this financial year for Mercury.

 Kaiwaikawe wind farm and stage two of Kaiwera Downs wind farm are both nearing FID.

It also follows on from full operation of Turitea South wind farm which began in July, and stage one of Kaiwera Downs wind farm, expected to be fully operational next month.

“We’re in an exciting stage of growth at Mercury as we continue to deliver on our commitment to playing a leading role in New Zealand’s transition to a low-carbon economy,” says Hawksworth.

‘This project makes a significant contribution and supports the diversity of our premium pipeline of wind projects and prospects.”

As a baseload energy source, geothermal helps meet winter peaks and its reliability is an important complement to intermittent renewables like wind and solar, Mercury explains.

Hawksworth and Mercury chief financial officer William Meek will discuss the Nga Tamariki OEC5 expansion by teleconference on September 20, 2023, starting 8.30am.

 Participants can register for the conference here and will receive a dial-in number upon registration.

A transcript will be available following the briefing on Mercury’s website.