Origin Energy’s (ORG) subsidiary, Contact Energy has agreed to purchase the 150 Megawatt, diesel fired Whirinaki peaker plant in Hawke’s Bay. The plant was offered for sale in a closed tender process run by the Ministry of Economic Development. Contact will acquire the plant for $33 million and also acquire around four million litres of diesel stored on site. Contact expects to take ownership of the plant and diesel around the end of 2011.
“The plant is a welcome addition to our portfolio, providing enhanced flexibility and fuel security to our existing generation capacity. The plant will also help Contact’s active development of an electricity hedge market in New Zealand and we have the option of moving the plant in the future and refuelling it on natural gas, if market conditions and gas prices make such a move desirable”, said Contact CEO Dennis Barnes. Contact Energy developed the Whirinaki plant and prior to agreeing to acquire the plant, operated it on behalf of the government.