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Scholfield, Simon --- "Geothermal and wind energy in New Zealand" [2013] NZJlEnvLaw 6; (2013) 17 NZJEL 155

Last Updated: 21 January 2023

Geothermal and wind energy in New Zealand [2013] NZJlEnvLaw 6155

Geothermal and Wind Energy in New Zealand

Simon Schofield*

New Zealand’s development of renewable energy for electricity gen- eration is at the forefront of national reductions in greenhouse gas emissions. This article considers the legal impediments facing two forms of renewable energy for electricity generation, geothermal and wind energy, which have been developing exponentially over the last decade. Following the introduction, the article starts with a short foreword describing the benefits of renewable energy before breaking into two respective parts. Each part follows a general pattern of exploring historical legal developments, ownership disputes, and then the adverse environmental effects of geothermal and wind development respectively. The final section of each part is devoted to Maori cultural concerns. Ultimately, this article concludes that ownership of renewable resources is such that no one owns these resources but that entitlement is only granted for the sustainable use of that resource. While the Resource Management Act 1991 has been interpreted to create a “first-in first- served” principle of resource allocation, this seems inconsistent with the sustainable management of resources. As will be seen, there are many challenges to the development of geothermal and wind energy in New Zealand.

*LLB (Hons)/BA (Hons) LLM University of Canterbury. This article is adapted from chapter 6 of the author’s thesis: Simon Schofield “The Law of Climate Change Mitigation in New Zealand” (LLM thesis, University of Canterbury, 2012) which is freely available from the author’s website: www.climatechangelaw.co.nz. The author gratefully acknowledges the expert supervision of Professor Elizabeth Toomey, University of Canterbury, and lucid guidance of Associate Professor Ken Palmer, University of Auckland.

New Zealand’s energy demand has been growing steadily and is forecast to continue to grow. New Zealand must confront two major energy challenges as it meets growing energy demand. The first is to respond to the risks of climate change by reducing greenhouse gas emissions caused by the production and use of energy. The second is to deliver clean, secure, affordable energy while treating the environment responsibly.

National Policy Statement for Renewable Electricity Generation1

1. INTRODUCTION

Electricity as a source of energy derived from renewable resources seeks to displace greenhouse gases emitted from fossil fuels. To this end, the New Zealand Government has stated that it will adhere to a target of 90 per cent of electricity generation to be from renewable resources (which currently sits at around 74 per cent)2 by 2025 (in an average hydrological year) providing this does not affect security of supply. Historically, New Zealand has benefited from the use of renewable resources. Today, renewable resources are being encouraged because they will reduce greenhouse gas emissions, allow diversification, enable security of supply, and reduce transmission losses. Nonetheless, legal impediments exist to the development of such resources. The most important is the “first-in first-served” system of resource allocation which traverses ownership and usufruct rights (the right to use). Of course although there is a “demonstrable public need for power”, “not all development of such renewable energy is appropriate”.3 It is conceded that the development of renewable resources for electricity all have adverse environmental effects of some kind.4 The legal analysis that follows shows that the competition over the use of resources in New Zealand has to negotiate sustainability over the appearance of an untapped resource with its limits.

  1. New Zealand Government “National Policy Statement for Renewable Electricity Generation 2011” (14 April 2011) Ministry for the Environment <http://www.mfe.govt.nz> [NPSREG 2011], preamble.
  2. Energy Efficiency and Conservation Authority “Developing Our Energy Potential: The New Zealand Energy Strategy 2011–2021 and the New Zealand Energy Efficiency and Conservation Strategy 2011–2016” (August 2011) Ministry of Economic Development

<www.med.govt.nz> at 6.

  1. Upland Landscape Protection Society Inc v Clutha District Council EnvC Christchurch C85/2008, 25 July 2008 at [239]–[240].
  2. Deborah Lynne Johnson “Electricity and the Environment — Current Trends and Future Directions” (2008) 12 NZJEL 195 at 213–214.

This article only evaluates the legal impediments to New Zealand’s devel­ opment of geothermal and wind energy for electricity generation. Over the last decade, the use of geothermal and wind energy for electricity generation has increased exponentially and these sources are expected to dominate new electricity generation capacity. This article therefore is divided into two principal parts. Each part follows a general pattern of exploring historical legal developments, ownership disputes, and then the adverse environmental effects of geothermal and wind development respectively. The final section in each part is devoted to Maori cultural concerns. This article has been confined entirely to New Zealand law owing to the already voluminous judgments and commentary. Before examining the legal impediments to geothermal and wind energy, a short foreword describes the benefits of renewable energy. Unfortunately, due to space constraints, other forms of renewable energy were unable to be included in this article and the reader is referred to the existing literature on hydro,5 solar,6 biomass (wood7 and landfill gas8) as well as marine9 sources of energy.

  1. Simon Schofield “The Law of Climate Change Mitigation in New Zealand” (LLM thesis, University of Canterbury, 2012) at 92–107. See also John Martin People, Politics and Power Stations: Electric Power Generation in New Zealand 1880–1998 (2nd ed, Bridget Williams Books, Wellington, 1998); Parliamentary Commissioner for the Environment Hydroelectricity or Wild River? Climate Change versus Natural Heritage (Wellington, 2012). Key cases are Alexandra District Flood Action Society Inc v Otago Regional Council EnvC Christchurch C102/2005, 20 July 2005; Director-General of Conservation (Nelson- Marlborough Conservancy) v Marlborough District Council [2010] NZEnvC 403; Lower Waitaki River Management Society Inc v Canterbury Regional Council EnvC Christchurch C80/2009, 21 September 2009; Ngati Rangi Trust v Genesis Power Ltd [2009] NZCA 222; Re Talley EnvC Christchurch C102/07, 3 August 2007.
  2. Parliamentary Commissioner for the Environment Evaluating Solar Water Heating: Sun, Renewable Energy and Climate Change (Wellington, 2012) at 19 and 64–66. See generally Energy Efficiency and Conservation Authority “Solar Energy” (2012) <www.eeca.govt. nz>; David Grinlinton “Achieving Emissions Reduction and Renewable Energy Targets: The Case for ‘Feed­In­Tariffs’ ” (2009) 8 BRMB 68; Alon Tal “Tried and True: Reducing Greenhouse Gas Emissions in New Zealand through Conventional Environmental Legislative Modalities” [2009] OtaLawRw 8; (2009) 12(1) Otago L Rev 149.
  3. Wood’s predominant use with respect to energy is burning for residential heating. Wood is also burnt for heat required during wood processing in New Zealand: Bioenergy Association of New Zealand “Heat Plant in New Zealand: Heat Plant Sized Greater Than One Hundred Kilowatts Thermal Segmented by Industry Sector” (2011) <www.bioenergy.org.nz>. See also EECA Business “Wood Energy Knowledge Centre” (2013) EECA EnergyWise <www. energywise.govt.nz>.
  4. Landfill gas is captured and combusted for electricity at Greenmount, Hampton Downs, Horotiu, Redvale, Rosedale, Silverstream, Southern, Tirohia and Whitford Landfills: Electricity Authority “List of Generation Projects: Generating Stations List as at April 2013” (2013) <www.ea.govt.nz>. See also Resource Management (National Environmental Standards for Air Quality) Regulations 2004, reg 26(1).
  5. Crest Energy Kaipara Ltd v Northland Regional Council EnvC Auckland A132/2009, 22 December 2009; Crest Energy Kaipara Ltd v Northland Regional Council [2011] NZEnvC

2. THE BENEFITS OF RENEWABLE ENERGY

The bundle of resource consents necessary for almost all renewable energy projects requires an assessment of environmental effects.10 Not all environ­ mental effects are adverse. Benefits are summarised in the National Policy Statement for Renewable Electricity Generation 2011 (NPSREG 2011), which aims to promote the efficient use of renewable energy in New Zealand. This recognises as a matter of national significance “the need to develop, operate, maintain and upgrade renewable electricity generation activities” and “the benefits of renewable electricity generation”.11 This includes avoiding, reducing or displacing greenhouse gas emissions. In addition, maintaining or increasing electricity generation capacity as well as security of supply through diversification is advantageous. It emphasises the benefits of using renewable national resources rather than finite resources; the reversibility of some renewable electricity generation technologies; and avoiding reliance on imported fuels. Decision­makers are required to consider the maintenance of existing renewable electricity generation output; minor reductions in existing renewable electricity generation can have cumulative effects; and meeting the New Zealand Government’s national target for renewable electricity. The NPSREG 2011 elucidates that renewable electricity generation needs to be sited where the renewable resources are available; technical difficulties may arise; and associated infrastructure will usually be required. Decision­makers should also design measures to allow for environmental mitigation (including offsetting measures or compensation) and encourage adaptive management. Regional and district plans are required to identify and accommodate potential sites.

Section 7( j) of the Resource Management Act 1991 (RMA) explicitly requires decision­makers to have particular regard to “the benefits to be derived from the use and development of renewable energy”.12 This is

26; Environs Holdings Ltd v Northland Regional Council EnvC Auckland A34/2009, 23 April 2009; Environs Holdings Ltd v The Environment Court at Auckland [2009] NZHC 669; [2009] NZRMA 340; Local Government Act 1974; Marine and Coastal (Takutai Moana) Act 2011; Submarine Cables and Pipelines Protection Act 1996; Ian Boisvert “Lifting the Looking Glass: Tradable Occupation Could Facilitate Ocean Renewable Energy” (2011) 15 NZJEL 1; Aotearoa Wave and Tidal Energy Association “Environmental Impacts of Marine Energy Converters” (7 November 2008) <www.awatea.org.nz>; Power Projects Ltd “Development of Marine Energy in New Zealand” (30 June 2008) <www.eeca.govt.nz>; Glen Wright and David Leary “Marine Energy” [2011] NZLJ 227.

  1. Resource Management Act 1991 [RMA], ss 88(2)(b), 104(1)(a) and sch 4. 11 NPSREG 2011, above n 1, at 4.

12 RMA, s 7( j). See generally Barry Barton “Renewable Energy in New Zealand” (2005) 23 J Energy and Nat Res L 141; Richard Hawke “Support for Renewable Energy: The Government’s Response” (2008) 7 BRMB 159; Johnson, above n 4; Jagdeep Singh­Ladhar

complemented with s 104E.13 In this way, greenhouse gas “emissions targets and renewable energy uptake are closely interlinked”.14 Clearly, s 7( j) prefers renewable energy. However, New Zealand has not chosen to achieve such a goal with renewable portfolio standards, tax incentives, or feed­in tariffs.15 Rather New Zealand has focused on energy strategies, resource management planning, building codes, government procurement, various grants and the New Zealand Emissions Trading Scheme.16 The New Zealand Energy Strategy 2011 provides the supporting framework through which such objectives are to be achieved. This states “developers of these resources face challenges from immature markets, low consumer awareness, emergent technologies, uncertain environmental effects or lack of supporting infrastructure”.17 These initiatives have been supplemented with other National Policy Statements.18 This national guidance forms the backbone to the development of geothermal and wind energy in New Zealand.

3. GEOTHERMAL ENERGY

3.1 Introduction

The use of geothermal energy for electricity generation has recently been revitalised. From Wairakei, the world’s first wet steam geothermal power station, to the development of New Zealand’s other active geothermal fields, the future looks promising. However, while geothermal power plants are increasing, Maori dispute ownership of the geothermal resource. Further barriers are exemplified through the two-decade-long litigation between Alistair McLachlan and state­owned enterprises over the control of geothermal resources. These conflicts have arguably inhibited sustainable use of geothermal resources. As an assessment of environmental effects is analysed, interference with the geothermal resource can result in subsidence, hydrothermal eruptions, problems with reinjection and contaminants. It alters tourism potential, creates odour

“Support for Renewable Energy: Analysing Legal Issues for Wind Power Generators in New Zealand Law” (2008) 7 BRMB 142.

  1. RMA, s 104E.
  2. Grinlinton, above n 6, at 72.

15 At 72.

16 At 72.

  1. NPSREG 2011, above n 1, at 6.
  2. Department of Conservation “New Zealand Coastal Policy Statement 2010” (3 December 2010) <www.doc.org.nz>; New Zealand Government “National Policy Statement on Electricity Transmission 2008” (13 April 2008) Ministry for the Environment <http:// www.mfe.govt.nz> New Zealand Government “National Policy Statement for Freshwater Management 2011” (1 July 2011) Ministry for the Environment <http://www.mfe.govt.nz> .

discharges, fills the landscape with pipes and intrudes on Maori metaphysical forces. Although progress is being made to resolve the ongoing disputes and to overcome adverse environmental effects, these constraints delay the development of geothermal resources for electricity generation in New Zealand.

3.2 History of Geothermal Resource Development in New Zealand

It is well known that New Zealand’s active geothermal fields are caused by the collision of two tectonic plates. Maori were first to utilise this geothermal resource for cooking, food preservation, washing, bathing, heating, healing, mining, and for medicinal purposes.19 Maori also used the pools for birthing, preparation for burial, burial and ritual killings.20 Maori would “name every hot pool, mud pool, geyser, fissure, and stream” with each assigned a different purpose.21 Hence, some people but not others would have certain rights over certain pools in a complex tapestry of Maori custom.22 The Maori words waiariki (chiefly waters or warm water pools), ngawha (boiling water pools), and puia (a geyser or cone­shaped feature) are but an indication of the greater genealogical ancestry that Maori associate with geothermal resources. As such, despite the Crown’s alienation of geothermal resources for tourism, Maori have vigorously sought to retain geothermal resources through Maori customary ownership as a “source of spiritual, physical, and emotional sustenance”.23

By 1951 well development was under way at the geothermal field of Wairakei near Taupo to turn geothermal energy into electricity.24 Unlike other geothermal systems, Wairakei is a wet steam system being water dominated so engineers had to devise a system to separate the steam from the geothermal water. The Wairakei station was also sited on the banks of the Waikato River to take advantage of cooling water as well as to enable the discharge of waste water. Notably, several blowouts occurred during construction. On 4 January 1960, a hydrothermal eruption occurred when the casing of a bore broke which caused a crater half an acre in area.25 On 29 February 1960, a hydrothermal eruption occurred at a different bore when its poorly cemented casing gave

  1. Waitangi Tribunal He Maunga Rongo: The Report on Central North Island Claims Stage 1 Volume 4 (2nd ed, Wai 1200, 2008) at 1478. See also Evelyn Stokes The Legacy of Ngatoroirangi: Maori Customary Use of Geothermal Resources (University of Waikato, Hamilton, 2000).
  2. Waitangi Tribunal Central North Island, above n 19, at 1478. 21 At 1476.

22 At 1478.

23 At 1542.

  1. Martin, above n 5, at 259.
  2. Richard Bolton and others “Dramatic Incidents during Drilling at Wairakei Geothermal Field” (2009) 38 Geothermics 40 at 41.

way.26 The hydrothermal eruption and significant seismic activity that followed created a crater about 20 metres deep and about 70 metres across which has been inactive since 1973.27

Direct use of geothermal energy for heating, by contrast, had established itself from colonisation. In Rotorua, shallow bores to obtain hot water were used for heating homes, tourist accommodation, and hospitals. In nearby Kawerau a mill was built in the 1950s to mill the Kaingaroa forest on land acquired from Maori.28 Geothermal energy was to operate the mill, dry the products produced and perhaps generate electricity for the new town.29 Without effective legal controls, unsustainable use of geothermal energy became inevitable. In Rotorua the Crown delegated control over geothermal bores in the Rotorua City Geothermal Empowering Act 1967 but by 1987 “geothermal activity at Whakarewarewa and Ohinemutu­Tarewa [were] in decline” as a number of geysers had failed and hot springs ceased to flow.30 A prohibition on the use of bores within a 1.5­kilometre radius around the Pohutu geyser was imposed with all bores to be licensed.31

There has been accelerated growth of geothermal power plants in the last two decades. New Zealand’s second geothermal electric power plant, Ohaaki, was also built on land leased from Maori.32 Modern geothermal plants such as the 1989 Ohaaki power plant are significantly different from Wairakei due to a cooling tower and with greater requirements for full reinjection of all geothermal liquids. Further developments occurred in 1996 with the building of the Poihipi power station by Alistair McLachlan and Mercury Energy Ltd.33 Rotokawa was developed in 1997, Ngawha in 1998, and in 1999 the first Mokai station was built in conjunction with the Tuaropaki Power Company.34 Kawerau has been gradually developed and its largest development occurred in 2008 following extensive negotiations.35 In 2010 Mighty River Power developed Nga

26 At 43–44.

27 At 46.

  1. Waitangi Tribunal Central North Island, above n 19, at 1619–1620; Geothermal Energy Act 1953; Tasman Pulp and Paper Company Enabling Act 1954.
  2. Waitangi Tribunal Central North Island, above n 19, at 1619. 30 At 1622.
  3. At 1622; Rotorua Geothermal Users Association v Minister of Energy HC Wellington CP543/86, 13 May 1987; Wharepaina Thermal Club Inc v Minister of Energy & Attorney- General HC Hamilton M181/87, 5 November 1987.
  4. Martin, above n 5, at 265; Evelyn Stokes Ohaaki: A Power Station on Maori Land

(University of Waikato, Hamilton, 2004).

  1. Colin Harvey and Brian White “A Country Update of New Zealand Geothermal: Leading the World in Generation Growth since 2005” (July 2012) New Zealand Geothermal Association <www.nzgeothermal.org.nz> at 3.
  2. At 4.
  3. At 4.

Awa Purua in association with Tauhara North No 2 Trust.36 Te Mihi will replace the aging Wairakei plant with efficient technology;37 and in the nearby Tauhara field, Te Huka has been commissioned with an adjoining power plant Tauhara II consented.38 In addition, Ngatamariki commenced operation in 2013.39

3.3 Ownership of Geothermal Resources

At common law geothermal resources are incapable of ownership until capture and the rights to geothermal resources run with land ownership.40 This legal position is amended by s 3 of the Geothermal Energy Act 1953 as carried over in s 354 of the RMA which states that the sole right to tap and use geothermal energy, falling short of explicitly conferring ownership, is vested in the Crown.41 Under the RMA, geothermal energy is defined as “energy derived or derivable from and produced within the earth by natural heat phenomena; and includes all geothermal water”.42 Geothermal water is defined in that Act as “water heated within the earth by natural phenomena to a temperature of 30 degrees Celsius or more”.43 Where an activity relating to geothermal energy or water is allowed by a regional plan, a proposed regional plan or a resource consent, such will be sufficient authorisation.44 An exception applies where geothermal energy or water is “used in accordance with tikanga Maori for the communal benefit of the tangata whenua of the area and does not have an adverse effect on the environment”.45 It has been held, nonetheless, that when considering a resource consent application, the exception is inapplicable because if the resource consent is granted such an activity is allowed.46 Such reasoning ignores the existing environment in determining whether any resource consent should be granted at all.

The fact is that geothermal resources are invariably located on, or near, Maori sites of significance.47 In four principal reports on the geothermal

  1. At 4.
  2. At 3.
  3. Final Report and Decision of the Board of Inquiry into the Tauhara II Geothermal Development Project (10 December 2010) at [35].
  4. New Zealand Geothermal Association “Geothermal Energy and Electricity Generation” (September 2013) <www.nzgeothermal.org.nz>.
  5. Wayne Morrison (ed) Blackstone’s Commentaries on the Laws of England: Book II

(Cavendish, Oxford, 2001) at 11.

  1. RMA, s 354; Geothermal Energy Act 1953, s 3. 42 RMA, s 2, definition of “geothermal energy”. 43 Section 2, definition of “geothermal water”.
  2. Section 14(3)(a).
  3. Section 14(3)(c).
  4. Contact Energy v Waikato Regional Council EnvC Auckland A4/2000, 24 January 2000 at [107]–[108].
  5. See generally Richard Boast “Geothermal Resources in New Zealand: A Legal History”

resources,48 the Waitangi Tribunal has described such resources as a taonga (treasure) over which Maori exercise rangatiratanga (chieftainship). Claimants, consequently, have submitted that the purchase of “all significant geothermal features is suspect”.49 The Crown, according to the Waitangi Tribunal, actively targeted Maori land for geothermal resources for tourism and excluded Maori from rent and royalty payments for the use of the geothermal resource.50 The Waitangi Tribunal explains that the RMA “continues to fail to accord Maori sufficient priority” for resource consents to develop geothermal resources because “local and regional authorities are not required to act in a manner consistent with the principles of the Treaty”.51 This appropriation debars Maori from acting in accordance with their customary rights.52 In order to protect the geothermal resource, Maori have sought declarations that geothermal bores and well­head structures on Maori land under the Te Ture Whenua Maori Act 1993 are fixtures attached to the land.53 The dispute seems never to have been formally resolved.54 Under the Te Ture Whenua Maori Act 1993, it is important to record that the complex web of Maori interests has given rise to extensive litigation over the potential development of geothermal resources.

As part of settlement for Treaty of Waitangi breaches, lands with geothermal resources have been recommended to be returned to Maori.55 Like water, settlement has also involved geothermal statutory acknowledgements which recognise the “particular cultural, spiritual, historical, and traditional association with, and use of, the geothermal energy and geothermal water” as specified.56 In some circumstances, consent authorities must forward a summary of resource

(1995) 6 Canterbury LR 1; Shane Heremaia “Maori Ownership of Geothermal Resources and the Resource Management Act 1991: The Rotoma Geothermal Field” (1995) 1(5) NZELR 109; Andrea Tunks “Kaitiakitanga — The Ngawha Geothermal Resource” (1994) 1(4) NZELR 84; Katherine Luketina “The Waikato Regional Geothermal Resource” Waikato Regional Council (21 March 2012) <www.waikatoregion.govt.nz>.

  1. Waitangi Tribunal Ngawha Geothermal Resource Report (Wai 304, 1993); Waitangi Tribunal Preliminary Report on the Te Arawa Representative Geothermal Claims (Wai 153, 1993); Waitangi Tribunal Central North Island, above n 19; Waitangi Tribunal The Stage 1 Report on the National Freshwater and Geothermal Resources Claim (Wai 2358, 2012).
  2. Waitangi Tribunal Central North Island, above n 19, at 1594.
  3. At 1636; Martin de Jong “A Heated Affair: Ownership and Exploitation of New Zealand’s Geothermal Resources” (July 1991) 7 Terra Nova 44 at 45.
  4. Waitangi Tribunal Central North Island, above n 19, at 1591. 52 At 1634.
  5. Re Tuaropaki E Block (1994) 66 Taupo MB 156, 13 July 1994; “Tuaropaki E Block” (Aug

1994) Maori LR 3; See also RMA, s 354; Geothermal Energy Regulations 1961, reg 34.

  1. In Re Tuaropaki E Geothermal Test Wells and the Attorney-General (1994) 1 Waiariki Appeal MB 24 (1 AP 24).
  2. Waitangi Tribunal Ngawha, above n 48, at 151.
  3. Ngati Tuwharetoa (Bay of Plenty) Claims Settlement Act 2005, s 46; Affiliate Te Arawa Iwi and Hapu Claims Settlement Act 2008, s 36.

consent applications to the relevant Maori entity which concerns geothermal energy or geothermal water in that entity’s region.57 It is noteworthy, therefore, that Maori names given to power plants is consistent with Maori cooperation with, and interest in, the development of New Zealand’s geothermal resources.

Where land has been alienated, the subsequent ownership of that land and priority to the underlying geothermal resource has led to “complex and hard­ fought litigation”.58 Case law on geothermal resources is dominated with the two­decade­long “litigation saga” between Contact Energy Ltd (Contact) formerly Electricity Corporation of New Zealand (ECNZ) and the McLachlans in various guises.59 From 1965, Alistair and his wife Ava McLachlan owned a sheep and beef farm near Taupo with a secondary business in growing roses60 along with orchids by making use of the underlying geothermal resources. This farm could be divided into Land A, Land B and Land C. Land C incorporated what became known as Lots 1 and 2. In the late 1980s the McLachlans decided to build a geothermal power station. The farm was owned by the Waituruturu Trust of which the McLachlans were trustees. The McLachlans needed finance to complete the project so contacted Mercury Network Ltd (Network) which was a wholly­owned subsidiary of Mercury Energy Ltd (Vector). Two new companies were formed for the joint venture: Mercury Geotherm Ltd (MGL) (which was owned 67 per cent by Network and 33 per cent by the McLachlans as trustees or beneficially) and Poihipi Land Ltd (PLL) (which is a wholly- owned subsidiary of MGL). In essence, the McLachlans transferred all the land to the joint venture (or to the financiers) with Land A being used as the power station site and Land B and Land C leased back to the McLachlans for farming purposes. The lease contained a right of first refusal to buy back the land if it was ever sold.

Litigation between Electricity Corporation of New Zealand (Electricorp or ECNZ) and the McLachlans started in 1989 when Geotherm Energy Ltd (GEL), a company owned by Waituruturu Trust, unsuccessfully challenged ECNZ’s entitlement to draw geothermal water for the Wairakei power station.61 In 1990

  1. Ngati Tuwharetoa (Bay of Plenty) Claims Settlement Act 2005, s 51; Affiliate Te Arawa Iwi and Hapu Claims Settlement Act 2008, s 41.
  2. McLachlan v Mercury Geotherm Ltd (in receivership) [2006] UKPC 27; (2006) 7 NZCPR 135 (PC) at [3]. 59 McLachlan v Mercury Geotherm Ltd (in receivership) CA117/05, 4 December 2006 at [1]. 60 Geothermal Produce New Zealand Ltd v Goldie Applicators Ltd HC Rotorua A26/81, 17

February 1983; Attorney-General v Geothermal Produce New Zealand Ltd [1987] 2 NZLR 348 (CA).

61 Special Tribunal of the Waikato Catchment Board v Electricity Corporation of New Zealand Ltd HC Hamilton M7/89, 9 March 1989; Waikato Catchment Board (Special Tribunal) v Electricity Corporation of New Zealand [1989] NZCA 61; [1989] 2 NZLR 22 (CA).

GEL applied for taking 44,000 tonnes of geothermal fluid per day for a new power station named Poihipi but was granted only 10,000.62 ECNZ challenged the application because of its interest in the Wairakei field. GEL unsuccessfully applied for disclosure of a ECNZ report.63 Later, GEL’s application for increased take by an interim decision was denied.64 Frustrated, GEL applied to declare the conduct of ECNZ as anti­competitive as a dominant use of a market position.65 GEL claimed ECNZ deterred potential specialist advisors, specialist service providers, customers, financiers and investors from dealing with GEL. They alleged that ECNZ made baseless statutory applications to hinder GEL’s planning applications and that ECNZ aimed to prevent GEL from using electrical supply authorities. The High Court and the Court of Appeal refused to strike out all of the statement of claim.66 ECNZ responded with applications for security of costs67 and costs68 in relation to GEL’s failure to increase the geothermal take.

By 1996 the proposed Poihipi power station had been built.69 When Mercury Geotherm Ltd (MGL), a related company, applied for additional resource consents relating to the discharge into the air of contaminants, the Ngati Rauhoto hapu appealed based on inadequate consultation and cultural wellbeing.70 An application to commence the resource consents was denied because MGL “took a commercial risk in deciding to complete the power station before it had secured all the consents necessary for operating it”.71 MGL was successful in obtaining a priority fixture for an appeal hearing.72 Ngati Rauhoto sought to relitigate the granting of the Poihipi power station consent but were estopped from averring that the taking of geothermal fluid had not

62 Geotherm Energy Ltd v Waikato Regional Council PT Auckland A22/90, 9 May 1990 at 2. 63 At 14.

  1. Geotherm Energy Ltd v Waikato Regional Council PT Hamilton A58/91, 16 July 1991.
  2. Geotherm Energy Ltd v Electricity Corporation of New Zealand Ltd HC Auckland CL101/90, 5 June 1991; Geotherm Energy Ltd v Electricity Corporation of New Zealand Ltd [1992] 2 NZLR 641 (CA).
  3. Geotherm Energy Ltd v Electricity Corporation of New Zealand Ltd HC Auckland CL101/90, 5 June 1991; Geotherm Energy Ltd v Electricity Corporation of New Zealand Ltd [1992] 2 NZLR 641 (CA).
  4. Geotherm Energy Ltd v Waikato Regional Council [1993] NZPT 343; [1994] NZRMA 139 (PT); Geotherm Exports NZ Ltd v Waikato Regional Council PT Hamilton A50/94, 23 June 1994.
  5. Geotherm Energy Ltd v Waikato Regional Council PT Auckland A34/94, 10 May 1994. 69 McLachlan v Mercury Geotherm Ltd (in receivership) [2006] UKPC 27; (2006) 7 NZCPR 135 (PC) at [10].
  6. Ngati Rauhoto Land Rights Committee v Waikato Regional Council EnvC Auckland A7/97, 28 January 1997 at 4.
  7. At 6.
  8. Ngati Rauhoto Land Rights Committee v Waikato Regional Council EnvC Auckland A33/97, 6 March 1997.

already been decided.73 Immediately after gaining consents the Poihipi power plant ran into difficulties as the “deep liquid steam wells did not ... provide sufficient steam for the power station”.74

With these problems, Network attempted to appoint receivers in respect of MGL and PLL. The McLachlans successfully applied for an interim injunction to prevent the appointment of receivers75 but an extension was not granted.76 Meanwhile the Wairakei power plant had since changed hands from ECNZ to Contact Energy Ltd (Contact). Contact had applied for the establishment of a binary plant at Wairakei to allow for reinjection. MGL objected because reinjection was to be at a temperature half of that currently being reinjected which was detrimental to the operation of the Poihipi power plant. On 10 December 1998, Judge Whiting held that Contact’s existing consents allowed for reinjection at any temperature and MGL’s appeal was struck out.77 Consequently, on 11 December 1998, Lawrence Chilcott and Peter Chatfield were appointed as receivers in respect of MGL and PLL.78 The receivers decided to sell Poihipi power plant as well as the leased land to Contact.

The McLachlans retaliated with two simultaneous fronts of litigation. The first set of proceedings involved suing the financiers for contractual, tortious, statutory79 and equitable causes of action relating to the failure of the joint venture.80 Applications for security for costs,81 discovery82 and joinder83 followed with an attempt to argue limitation as well as delay as an abuse of process on behalf of the financiers which on appeal was rejected in favour of consolidation.84 The second set of proceedings involved caveats that the Mclachlans had lodged which alleged that the right of first refusal in the lease

  1. Ngati Rauhoto Land Rights Committee v Waikato Regional Council EnvC Auckland A065/97, 19 May 1997 at 9.
  2. McLachlan v MEL Network Ltd HC Auckland CIV­1998­404­510, 9 December 2004 at [11].
  3. McLachlan v Mercury Network Ltd HC Auckland CP476/98, 16 November 1998. 76 McLachlan v Mercury Network Ltd HC Auckland CP476/98, 9 December 1998.
  4. Mercury Geotherm Ltd v Waikato Regional Council EnvC Auckland A144/98, 10 December 1998.
  5. McLachlan v Mercury Geotherm Ltd (in receivership) [2006] UKPC 27; (2006) 7 NZCPR 135 (PC) at [10].
  6. Companies Act 1993, s 174.
  7. McLachlan v MEL Network Ltd HC Auckland CIV­1998­404­510, 9 December 2004 at [44].
  8. McLachlan v MEL Network Ltd HC Auckland CP476/98, 1 February 2002; McLachlan v MEL Network Ltd [2002] NZCA 215; (2002) 16 PRNZ 747; McLachlan v MEL Network Ltd CA158/05, 28 February 2006.
  9. McLachlan v MEL Network Ltd HC Auckland CIV­1998­404­253, 22 September 2006. 83 McLachlan v MEL Network Ltd HC Auckland CIV­1998­404­510, 9 December 2004.

84 McLachlan v Vector Ltd HC Auckland 2004­404­7053, 7 July 2005; McLachlan v Vector Ltd CA157/05, 28 February 2006.

had been triggered. In the High Court the right of refusal was held not to have been triggered as there was merely an invitation of offers85 and what had been “sold” to Contact was an option to purchase when the lease was terminated.86 After determining the areas of the power plant sale and the leased land, Potter J held that accompanying encumbrances over the leased land breached “the lessees’ right of quiet enjoyment”.87 Lots 1 and 2 that had not been transferred from Network to MGL in an administrative slip were corrected with a constructive trust in favour of MGL with an equitable lease in favour of the McLachlans.88 The Court of Appeal redefined the areas subject to the agreements while referring back to the High Court for further consideration the question of whether the right of first refusal had been triggered in relation to Lots 1 and 2.89 The Privy Council dismissed the appeal.90 In terms of Lots 1 and 2, Potter J in the High Court held that there was no triggering of the right of first refusal.91 Contact was held not to be a bona fide purchaser for value.92 Hence in terms of equitable priorities as the conduct of the McLachlans was not disentitling, Contact acquired Lots 1 and 2 subject to the McLachlans’ equitable lease.93 The Court of Appeal rejected the appeal.94

In a deed of settlement signed in 2006 the McLachlans abandoned the damages proceedings against the financiers for appointing receivers and abandoned any further appeal rights in relation to the lease.95 In signing the deed of settlement, the McLachlans transferred all their shares in MGL to Network which under the lease amounted to termination of the lease. In the event of termination, Contact’s option to purchase was activated. Nonetheless, clause 5 of the deed provided that “the rights and obligations under the Lease shall continue unaffected”.96 In the High Court, Allan J reasoned that when the transfer of shares took place, the lease was terminated and clause 5 of the deed of settlement could not save the lease. Arguments based on an implied term, rectification, mistake, estoppel and relief against forfeiture were all

85 Mercury Geotherm Ltd (in receivership) v McLachlan HC Auckland M129­IM00, 14 June 2002 at [61].

86 At [63].

87 At [157].

88 At [152].

89 McLachlan v Mercury Geotherm Ltd (in receivership) CA142/02, 28 August 2003 at [92]. 90 McLachlan v Mercury Geotherm Ltd (in receivership) [2006] UKPC 27; (2006) 7 NZCPR 135 (PC).

91 Mercury Geotherm Ltd (in receivership) v McLachlan [2005] NZHC 1207; [2006] 1 NZLR 258 (HC) at [109].

92 At [408].

93 At [400]–[401].

  1. McLachlan v Mercury Geotherm Ltd (in receivership) CA117/05, 4 December 2006 at [43] and [67].
  2. Chilcott v McLachlan HC Auckland CIV­2007­404­2796, 22 December 2009 at [30].

96 At [30].

rejected. The lease was also held to be void for having an uncertain term.97 The conclusion to this litigation where the right of first refusal did not protect the interests of the McLachlans and the lease of the McLachlans was terminated, serves to demonstrate, more than anything else, that Contact retained an illustrious “competitive advantage over the McLachlans”.98

This dispute entrenches the “first-in first-served” basis for resource allocation in New Zealand rather than a sustainable allocation. A related case, Geotherm Group Ltd v Waikato Regional Council, provides a potent example.99 After the receivers sold the Poihipi power plant to Contact, the McLachlans decided to use a related company Geotherm Group Ltd (GGL) to apply for another geothermal power station on Tukairangi Road on 29 March 2001. On 30 March 2001, Contact submitted a comprehensive suite of resource consents for renewal. Subsequently, Contact’s resource consents became notifiable prior to GGL’s. GGL’s application then became ready for a hearing prior to Contact’s. Despite the contention that in order to be “served” a hearing date was necessary, Judge Whiting held that for priority “notifiability is the critical step” as hearing dates could oscillate.100 Judge Whiting’s comments are worth repeating:101

In my view, notifiability should be the starting point, but not necessarily always the determining factor. [T]he question of priority [should be] underlain by fairness. Having achieved priority, by driving the application [to notification], an applicant cannot then rest on its laurels. If there is an unreasonable delay

... [a]nother applicant second in time [may] be able to rely on [s] 21 [of the RMA] and thus jump the queue.

In these observations, the analogy of competing equitable priorities displaced by disentitling conduct such as delay discussed in Mercury Geotherm Ltd (in receivership) v McLachlan is representative of a property rights approach to resource allocation.102 Indeed, there is irony that the courts have since replaced priority accorded to notification with the need to be the first to file.103 Technically, GGL was first to file. Drawing upon the McLachlan experience, a

  1. At [108]–[112]. Compare Property Law Act 2007, s 212.
  2. Mercury Geotherm Ltd (in receivership) v McLachlan [2005] NZHC 1207; [2006] 1 NZLR 258 (HC) at [317]. 99 Geotherm Group Ltd v Waikato Regional Council [2002] NZEnvC 425; (2003) 9 ELRNZ 75 (EnvC); Geotherm

Group Ltd v Waikato Regional Council [2004] NZRMA 1 (HC).

100 Geotherm Group Ltd v Waikato Regional Council [2002] NZEnvC 425; (2003) 9 ELRNZ 75 (EnvC) at [40].

101 At [47].

102 Mercury Geotherm Ltd (in receivership) v McLachlan [2005] NZHC 1207; [2006] 1 NZLR 258 (HC). 103 Central Plains Water Trust v Ngai Tahu Properties Ltd [2008] NZCA 71; [2008] NZRMA 200 (CA).

strong argument can be put that the “first-in first served” principle of resource allocation under the RMA is not only environmentally unsustainable104 but is capable of being anti­competitive in breach of the Commerce Act 1986 if wielded unreservedly. The fear of gazumping large projects may in fact lead to large projects abusing the market as the McLachlan litigation demonstrates.105 In order to avoid abusing a market position, the RMA seeks to coextensively discourage the use of trade competition in appeals.106 Nonetheless, how well the RMA prevents its use for anti­competitive purposes is debatable even in light of 2009 amendments.107 In the context of geothermal resources, an appeal was sought to be struck out on this ground in Fletcher Challenge Energy Power Generation Ltd v Waikato Regional Council.108 This recognised that an “ulterior motive motivated by trade competition” will often be present due to the value of geothermal resources especially for electricity generation.109 There will always be a “trade advantage” in the activities of competitors.110 Provided any objector confines itself to genuine resource management concerns and avoids acting “merely [in] a guise for opposing [due to] trade competit[ion]”, such concerns are doubtful to an abuse of the courts process if they seem “serious

and sensible”.111

3.4 Assessment of Environmental Effects of Geothermal Development

A primary adverse environmental effect when geothermal water is extracted from a geothermal field but not reinjected is the “compaction of the [overlying] porous rock in response to a decline of fluid pressure” which results in subsidence.112 In the Wairakei­Tauhara geothermal system, total subsidence due to the geothermal extraction has exceeded 15 metres at the centre of the

  1. Barry Brunette “Freshwater Management and Allocation under the Resource Management Act 1991: Does First­In First­Served Achieve Sustainable Management Principles?” (2006) 10 NZJEL 169 at 213.
  2. Central Plains Water Trust v Ngai Tahu Properties Ltd [2008] NZCA 71; [2008] NZRMA 200 (CA) at [95]. 106 RMA, ss 308A–308I.
    1. RMA, ss 308A–308I; Jonathan Cutler “The Use of the Resource Management Act 1991 for Trade Competition Purposes” (1999) 3 NZJEL 67.
    2. Fletcher Challenge Energy Power Generation Ltd v Waikato Regional Council EnvC Auckland A109/98, 2 September 1998.

109 At [38].

110 At [38].

111 At [32].

112 Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [140].

Wairakei subsidence bowl.113 This subsidence has been described as “by far the largest in the world caused by geothermal extraction” due to a peak of 25 bars of pressure loss over a total geographical area of approximately 84 square kilometres.114 This geothermal system partly lies under the Taupo township.115 Differential subsidence is truly problematic by effectively warping structures. Buildings, poles, fences, water pipes, drains, manholes, curbs, cables, wells, roads and footpaths are, thus, prone to growing deterioration.116 About 48 buildings are currently being affected by subsidence.117 In this way, Contact is burdened with a requirement to remediate more than minor damage caused by the Wairakei­Tauhara system.118

Extraction of geothermal water without reinjection causes a drawdown in geothermal reservoir pressure, inflating the temperature of the remaining geothermal resource, increasing steam activity and thereby fostering a more productive field for electricity generation. In the Tauhara field the heat rise meant domestic bores increased by up to 60°C during the 1980s although the temperature has since stabilised or declined.119 Steaming ground will increase which when combined with low atmospheric pressure, blockage of a vent, or heavy rainfall after a prolonged dry period may lead to hydrothermal eruptions.120 Such hydrothermal eruptions occurred in the Broadlands Road Thermal Reserve in 1974 and 1981 (the Pony Club eruptions) with a smaller eruption at Spa Park in 1974 and a fairly violent eruption at Alum Lakes in 2001.121 Evidence has also been led of scalding water from cold taps, steaming toilet bowls, hot lawns, and animals falling into fumeroles as a result of

113 At [152].

114 At [145]–[151].

  1. Rotokawa Joint Venture Ltd v Waikato Regional Council EnvC Auckland A41/2007, 18 May 2007 at [41].
  2. Contact Energy Ltd v Waikato Regional Council EnvC Auckland A4/2000, 24 January 2000 at [171]–[172].
  3. Rotokawa Joint Venture Ltd v Waikato Regional Council EnvC Auckland A41/2007, 18 May 2007 at [254].

118 At [424].

119 Contact Energy Ltd v Waikato Regional Council EnvC Auckland A4/2000, 24 January 2000 at [155].

120 At [157].

121 Final Report and Decision of the Board of Inquiry into the Tauhara II Geothermal Development Project (10 December 2010) at [249]; Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [209].

Wairakei­Tauhara activities.122 In the event of hydrothermal eruptions, however, such eruptions are expected to be “insignificant and temporary”.123

If reinjection is chosen as preferable to subsidence, a myriad of alternative problems arise. Reinjection will lead to a cooling of the geothermal field lowering production and thereby any electricity generated. If reinjection is targeted in a particular area, quenching can occur where there is a wholesale cooling by saturation leading to a collapse in production from that particular area.124 Reinjection also logically increases reservoir pressure. If high­ temperature water is returned to the geothermal reservoir, the pressure rise can lead to the boiling liquid entering groundwater giving rise for the potential for hydrothermal eruptions to be triggered.125 Reinjection also involves “a small risk of causing induced seismicity especially around reinjection wells”.126 For the Wairakei power plant, geothermal water was traditionally discharged into the Waikato River.127 As a result cascade users who use the geothermal water from the power plant include a prawn park and tourist infrastructure.128 Thus, the costs of reinjection are uneconomic.129 Appeals in 2006 relating to the geothermal energy sections of a Waikato Regional Council Policy Statement and Proposed Regional Plan requiring full reinjection were dismissed in favour of “integrated and adaptive management” of the geothermal resource.130

Interference with geothermal water through extraction and reinjection may change the concentrations of various contaminants in the geothermal

  1. Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [174].
  2. Contact Energy Ltd v Waikato Regional Council EnvC Auckland A4/2000, 24 January 2000 at [247].
  3. Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [138].

125 At [218].

  1. Contact Energy Ltd v Waikato Regional Council EnvC Auckland A4/2000, 24 January 2000 at [241].
  2. Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [244].
  3. Rotokawa Joint Venture Ltd v Waikato Regional Council EnvC Auckland A41/2007, 18 May 2007 at [421].
  4. Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [249].

130 At [337].

reservoir.131 Geothermal water contains mineral salts, “silica, arsenic, boron, mercury, and hydrogen sulphide”.132 Concentrations vary according to source, and when steam is condensed following use in a geothermal power station, there are traditionally high rates of mercury and hydrogen sulphide.133 In Ngawha Geothermal Resource Company Ltd v Northland Regional Council (Ngawha) evidence suggested that before the operation of the geothermal power station, nearby geothermal pools were said to have a healing effect and afterward children were suffering from skin ailments from bathing.134 Interestingly, an application for adjournment to call medical evidence about the effects of toxic mercury poisoning was declined.135 The Waitangi Tribunal records that “concentrations of chemicals designed to keep the injection pipes clean make [geothermal pools] impossible to utilise”.136

If geothermal water is irrigated onto land, increased contaminants in plants and animals will directly affect humans.137 If geothermal water is reinjected into deep aquifers where such geothermal water has the potential to rise and infiltrate shallower freshwater aquifers, the same affliction will occur. If geothermal water is discharged into waterways such as rivers, a broader range of adverse environmental effects will be noticed. As the Wairakei power plant discharges into the Waikato River, the concentrations of mercury, hydrogen sulphide and arsenic as well as temperature exceed natural levels.138 Therefore, “the current discharge has adversely affected fish populations downstream of the discharge”.139 Hamilton and Auckland use the Waikato River as a water supply but such geothermal discharges are remedied by the treatment systems.140 Hence, disposal of the geothermal wastewater through reinjection to avoid contamination is typically an environmental necessity.141 In addition,

  1. Contact Energy Ltd v Waikato Regional Council EnvC Auckland A4/2000, 24 January 2000 at [158]–[159].
  2. Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [223].

133 At [223].

  1. Ngawha Geothermal Resource Company Ltd v Northland Regional Council EnvC Auckland A117/2006, 30 August 2006 at [67].
  2. Ngawha Geothermal Resource Company Ltd v Northland Regional Council EnvC Auckland A92/2006, 7 July 2006 at [3]; Ngawha Geothermal Resource Company Ltd v Northland Regional Council EnvC Auckland A117/2006, 30 August 2006 at [65].
  3. Waitangi Tribunal Central North Island, above n 19, at 1616.
  4. Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [237].
  5. Rotokawa Joint Venture Ltd v Waikato Regional Council EnvC Auckland A41/2007, 18 May 2007 at [52].
  6. Geotherm Group Ltd v Waikato Regional Council EnvC Auckland A47/2006, 13 April 2006 at [231].

140 At [226].

141 At [238]–[239].

there are progressively tighter environmental controls through resource consent conditions to avoid contamination of the Waikato River.142

Regardless of reinjection, extracting energy from geothermal water will have an adverse effect on the temperature of geothermal features and tourism. The Waitangi Tribunal reports that many taonga geothermal features “have been irreparably destroyed or degraded” with a loss of cultural and spiritual association.143 Many geothermal features have dried up or are no longer active.144 In Wairakei, “the geothermal field is now a geothermal field without geysers”.145 Modern geothermal power plants such as the Ngawha power plant in Northland are, however, designed to ensure that there are not “any measurable effects on” and “no significant changes” to geothermal features.146 This can be achieved by setback zones and maintenance of geothermal reservoir pressure.147 In this context, Judge Sheppard in Contact Energy Ltd v Waikato Regional Council describes the flow-on effects to tourism appeal as a derivative adverse environmental effect and not as an adverse environmental effect in itself.148 With respect, the meaning of “effect” and “environment” are not so confined. The word “environment” includes the need to look to the economic environment and “effect” includes effects of low probability but high potential impact.149 Such a construction fits with the requirement to consider sustainable management of economic wellbeing.150

Two related adverse environmental effects include air discharges and landscape effects. In relation to the landscape, geothermal power plants inevitably involve a physical power station, well pads, switchyard, cooling towers, separator

  1. Rotokawa Joint Venture Ltd v Waikato Regional Council EnvC Auckland A41/2007, 18 May 2007 at [52]; Waikato­Tainui Raupatu Claims (Waikato River) Settlement Act 2010.
  2. Waitangi Tribunal Central North Island, above n 19, at 1601. 144 At 1617.

145 At 1614.

146 Ngawha Geothermal Resource Company Ltd v Northland Regional Council EnvC Auckland A117/2006, 30 August 2006 at [27].

147 At [27].

  1. Contact Energy Ltd v Waikato Regional Council EnvC Auckland A4/2000, 24 January 2000 at [263].
  2. RMA, ss 2–3.
  3. Section 5.

stations and extensive pipelines which provide an industrial visual effect.151 Such intrusions can be mitigated with earth bunds, extensive group plantings, locating the site of the power station away from populated areas, and adopting regressive colours matched to the surroundings.152 Plumes from the cooling towers can, of course, have a visual intrusion on outstanding natural features such as hills and mountains of significance which may need mitigation.153 Those plumes or air discharges involve three main gases of concern: carbon dioxide, mercury and hydrogen sulphide. Discharges of carbon dioxide are generally insignificant.154 Mercury discharges are consistent with local background concentrations.155 Hydrogen sulphide, by contrast, has a “rotten egg” odour.156 Although unlikely to cause health effects,157 odour will be noticeable in the immediate vicinity.158 Ongoing ambient air monitoring is typically necessary.159

Remedying metaphysical environmental effects presents perhaps the greatest challenge. With extensive mythology and legends as to the geothermal resource with taniwha (spirits) detailed in Waitangi Tribunal reports, Maori association with geothermal resources is ubiquitous, and if excluded from consultation, Maori will systematically object. One legend sees geothermal waters as the womb of Mother Earth as the source of human life itself.160 In Ngawha, cultural evidence recorded that the relevant taniwha (Takauere) lives in an underground lake but scientific evidence could not reveal its presence.161 Therefore, the Environment Court found that it did not have jurisdiction to rule on such matters as the RMA governed proceedings.162 While Round agrees,163 the RMA would seem to require accommodation of beliefs in sustainable management. It is arguable that the question is of balancing beliefs with development rather

  1. Final Report and Decision of the Board of Inquiry into the Tauhara II Geothermal Development Project (10 December 2010) at [264].

152 At [267].

153 At [265].

154 Final Report and Decision of the Board of Inquiry Te Mihi Geothermal Power Station Proposal (3 September 2008) at [175].

155 At [175].

156 At [171].

157 Final Report and Decision of the Board of Inquiry into the Tauhara II Geothermal Development Project (10 December 2010) at [296].

158 At [294]–[295].

159 At [301].

  1. Waitangi Tribunal Ngawha, above n 48, at 16.
  2. Ngawha Geothermal Resource Company Ltd v Northland Regional Council EnvC Auckland A117/2006, 30 August 2006 at [60]–[62].

162 At [68].

163 David Round “Here be Dragons” [2005] OtaLawRw 3; (2005) 11 Otago L Rev 31 at 51.

than declaring such beliefs as being non­justiciable. Development itself is incorporated into Maori customary practices due to the need to regulate the temperature of geothermal resources for different purposes.164

3.5 Conclusion

New Zealand’s active geothermal fields enable renewable electricity generation and reduce greenhouse gas emissions. The development of such resources like the Wairakei geothermal power station has been met with calls that there is Maori customary ownership over geothermal resources. These rights over ownership merge into disputes over land ownership which is revealed in the Alistair McLachlan litigation. This can result in the unsustainable exclusion of others from the use of geothermal resources. Assessments of environmental effects expose that use of geothermal resources can cause subsidence and hydrothermal eruptions where there is a lack of or increase in reinjection, create contaminants including odour, crisscross the landscape with pipes, harm tourism and interfere with Maori metaphysical wellbeing. The development of geothermal resources is continuing despite restrictions which appear to burden development with delay due to continuing conflicts.

4. WIND ENERGY

4.1 Introduction

Harnessing energy from the wind has grown exponentially in recent decades in an effort to curb greenhouse gas emissions. New Zealand’s winds are amongst the world’s best. Although wind is intermittent and unpredictable, it is now commercially viable. Adverse environmental effects, however, lie with landscape, visual effects, cumulative impacts and noise. Linked are adverse environmental effects on avifauna, ecology, traffic, fire risk, rural activities, recreation, tourism and Maori values. Such concerns, as will be seen, are not completely without substance. The Environment Court and Boards of Inquiry have, nonetheless, reasoned that given wind energy’s environmentally benign nature, wind energy will often but not always meet the RMA’s purpose of sustainable management. Where wind energy does not, redesign or truncation may be available. With such support, New Zealand has over 600 MW of commercial large­scale wind energy operating or under construction and nearly 3,000 MW consented or proposed but not yet constructed.165

  1. Waitangi Tribunal Central North Island, above n 19, at 1528.
  2. New Zealand Wind Energy Association “Wind Farms Operating and Under Construction”

4.2 History of Wind Farms in New Zealand

New Zealand sits in a major atmospheric circulatory zone which results in prevailing westerlies known colloquially as the Roaring Forties which is a reference to New Zealand’s latitude.166 New Zealand, therefore, has an “excellent”167 and “high quality wind”168 resource which compares favourably internationally.169 Utilisation of the wind resource has traditionally proved financially prohibitive, but with an increasing price of electricity and the cost of wind turbines declining, wind farms have proliferated in New Zealand.

New Zealand’s first modern wind turbine was established at Brooklyn in Wellington in 1993.170 In 1995 a plan for 47 turbines on Baring Head near Wellington was declined.171 New Zealand’s first wind farm called Hau Nui172 was opened in 1996 with seven turbines to be followed by a further eight turbines in 2004.173 Larger wind farms have been established in the Manawatu near Palmerston North due to the wind­funnelling effect of the Tararua and Ruahine ranges.174 The Tararua wind farm development was completed in three stages in 1999, 2004 and 2007 with 48, 55 and 31 turbines respectively.175 This is joined by Te Apiti with 55 turbines built in 2004.176 Nearby Te Rere Hau, also built in stages, now has 97 turbines.177 Many smaller turbines have also been constructed around New Zealand consistent with the Parliamentary Commissioner for the Environment’s preference for community­based energy.178 Nevertheless, several large commercial wind farms have been built.

and “Proposed Wind Farms” (2013) <www.windenergy.org.nz> [NZWEA “Wind Farms Operating” and “Proposed Wind Farms”].

  1. Parliamentary Commissioner for the Environment Wind Power, People, and Place

(Wellington, 2006) at 16 [PCE Wind].

167 At 16.

  1. Helle Tegner Anker, Birgitte Egelund Olsen and Anita Ronne (eds) Legal Systems and Wind Energy: A Comparative Perspective (DJØF, Copenhagen, 2008) at 284.
  2. PCE Wind, above n 166, at 21.

170 At 22.

171 At 96–97.

  1. For convenience and due to space constraints all wind farms herein described are given names which either refer to the location or the commonly cited name for the project. For instance, Meridian Energy Ltd v Wellington City Council EnvC Wellington W31/2007, 14 May 2007 is described as Project West Wind whereas Meridian Energy Ltd v Wellington City Council [2011] NZEnvC 232 is labelled Project Mill Creek.
  2. PCE Wind, above n 166, at 97.

174 At 16.

175 NZWEA “Wind Farms Operating”, above n 165. 176 NZWEA “Wind Farms Operating”, above n 165. 177 NZWEA “Wind Farms Operating”, above n 165. 178 PCE Wind, above n 166, at 113.

These include Meridian’s White Hill (Southland), West Wind (Wellington), Te Uku (Waikato) and TrustPower’s Mahinerangi (Clutha).179

4.3 Ownership of Wind

At common law, air like water is incapable of ownership and subject to res communes. What is left is land ownership over which the air flows. It is strange therefore that resource consents for the water180 for hydro or geothermal power stations, coastal permits181 for marine energy activities, and discharges of greenhouse gases182 from fossil fuel-fired power plants all have maximum resource consent terms of 35 years. Despite this, wind­generated electricity falls to be considered as a land­use activity of unlimited duration.183 While almost all consented wind farms have perpetuated this anomaly, the Board of Inquiry into Hauauru ma Raki (168 turbines, 150 metres in total height)184 granted 50­year resource consents. It found 50 years was “the maximum period that the turbines might be in service” because after that turbines would require replacement. When reliance is placed on the reversible effects of wind turbines,185 decommissioning requirements become essential so the Board held there should be removal of a turbine if the turbine ceases to operate for two years.186 This consent term argument has the potential to constructively bring wind rights in line with other forms of electricity generation.

Although wind is renewable, logistical limits to wind turbine development are being encountered. In Unison Networks Ltd v Hawkes Bay Wind Farm Ltd, Unison and Hawkes Bay Wind Farm (HBWF) both appealed to the High Court against the decision of the Environment Court confirming grants of resource consents to both parties. Unison (15 turbines, 90 metres total height)187 and

179 NZWEA “Wind Farms Operating”, above n 165. 180 RMA, s 123(d).

  1. Section 123(c).
  2. Section 123(d).
  3. Section 123(b).
  4. Final Report and Decision of the Board of Inquiry into the Hauauru ma Raki Wind Farm and Infrastructure Connection to Grid (13 May 2011) at [132]–[136].

185 At [1143].

186 At [1169].

187 Unison Networks Ltd v Hawke’s Bay Wind Farm Ltd HC Wellington CIV­2006­441­0810, 15 May 2007 at [6]–[7].

HBWF (75 turbines, 125 metres total height)188 are competitors and the two applications could not co­exist as “the wind produces a wake of disturbed air downwind of it sufficiently turbulent not just to impair efficiency but to damage another turbine attempting to operate within that disturbed airflow”.189 The Unison proposal was the first stage of a two-stage project which given its small size meant the inference was irresistible that the application “was made to secure priority”.190 Unison’s resource consents were lodged and notified days before HBWF’s more complex application was lodged and notified.191 HBWF was successful in consolidating the proceedings into one hearing because it “would be a waste of resources ... to have to deal with ... common issues twice”.192 At the subsequent hearing both resource consents were confirmed with the HBWF turbines to “avoid wake turbulence effects on the Unison turbines” because Unison had priority.193 The High Court refused to alter priority and also refused to rephrase separation conditions which constrained HBWF’s turbines but rather referred to specific turbines.194

4.4 Assessment of Environmental Effects of Wind Energy

Wind energy is expensive because of its intermittent and unpredictable nature. Wind speed and direction can vary within minutes. These fluctuations need to be accommodated. In these circumstances, hydroelectric generation can be utilised concurrently with its storage capacity to provide electricity when the wind is in a lull. Alternatively, wind is usually available when the hydroelectric lakes are low due to rainfall. In Project Hayes Judge Jackson in the Environment Court rejected such an argument along with the proposal for 176 turbines at 160 metres in total height on the Lammermoor Range in Central

  1. Unison Networks Ltd v Hastings District Council [2010] NZEnvC 376 at 3.
  2. Unison Networks Ltd v Hastings District Council EnvC Wellington W58/2006, 17 July 2006 at [12].
  3. Unison Networks Ltd v Hawke’s Bay Wind Farm Ltd HC Wellington CIV­2006­441­0810, 15 May 2007 at [9].

191 At [13].

  1. Hawkes Bay Wind Farm Ltd v Hastings District Council EnvC Wellington W05/2006, 19 January 2006 at [8].
  2. Unison Networks Ltd v Hastings District Council EnvC Wellington W58/2006, 17 July 2006 at [84].
  3. Unison Networks Ltd v Hawke’s Bay Wind Farm Ltd HC Wellington CIV­2006­441­0810, 15 May 2007 at [86]; Unison Networks Ltd v Hastings District Council EnvC Wellington W81/2006, 22 September 2006 at [6]–[7] and Unison Networks Ltd v Hastings District Council [2010] NZEnvC 376 at 3.

Otago.195 His Honour stated that such complementarity was one­sided with only “hydro generation assisting wind generation”.196 It was held “windpower does not solve the problems posed by a [dry year] shortage of energy at peak times”.197 Storage capacity was true of any generation as “thermal fuel [can be] stored”.198 Wind energy, therefore, needed “back­up generation” which meant that a “thermal plant would be required”.199 Although Judge Jackson noted that the Court should not be “concerned for the financial wellbeing of corporate entities”,200 the costs of additional capacity brought about by wind generation was a cost which required consideration as it will be paid by consumers.201

On appeal the High Court returned the decision to the Environment Court for reconsideration. Meridian has since withdrawn its applications altogether.202 However, the High Court did not discuss this lack of complementarity and the problems raised by these comments await answer. The first point that can be made is that the cost of electricity is protected through electricity pricing to find the lowest overall cost.203 It follows that the electricity generator will bear the capital and operational costs of the wind farm.204 Problematically, Judge Jackson’s encouragement of fossil fuels for electricity is inconsistent with legislative encouragement of renewable energy.205 The Environment Court has previously recognised the “strong synergy between wind generation and hydro”206 as it had “no doubt that the production of electricity from [a] wind farm has the potential ... to result in hydroelectric storage to be utilised”.207 Another point is that assumptions are made of New Zealand generating up to 20 per cent of its electricity from wind which ignores the current levels of wind­generated electricity.208 Also at a purely evidential level the New Zealand Institute of Economics has stated that in the Manawatu wind speeds are

  1. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009.

196 At [557].

197 At [343].

198 At [557].

199 At [593].

200 At [587].

201 At [604].

  1. NZWEA “Proposed Wind Farms”, above n 165.
  2. Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 4 [88].
  3. At ch 4 [90]; Meridian Energy Ltd v Wellington City Council [2011] NZEnvC 232 at [39].
  4. RMA, s 7( j); Energy Efficiency and Conservation Act 2000 [EECA 2000], s 5.
  5. Meridian Energy Ltd v Wellington City Council EnvC Wellington W31/2007, 14 May 2007 at [399].
  6. Upland Landscape Protection Society Inc v Clutha District Council EnvC Christchurch C85/2008, 25 July 2008 at [220].
  7. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [604].

negatively correlated with electricity prices but are positively correlated with lake levels in the North Island.209

The High Court, on appeal from the Environment Court decision in Project Hayes, focused on two principal interrelated errors of law. The Environment Court had engaged with the argument that an assessment of environmental effects should include “a description of any possible alternative locations or methods for undertaking the activity”.210 Meridian was asked for further information relating to alternative locations for wind farms “elsewhere in New Zealand”.211 Even so, Judge Jackson found that alternative locations should have been further critiqued.212 The High Court emphasised that what was merely required was a description of alternative locations and that applicants were not required to “describe alternative sites beyond the relevant district”.213 The second error of law related to s 7(b) of the RMA which calls for consideration of the efficient use and development of natural and physical resources. Judge Jackson put a judicial gloss on the word efficient to require economic efficiency as a cost-benefit analysis to quantify “the value of the landscape”.214 The High Court found that the approach aimed at increasing objectivity was legally erroneous because an ecosystem simply “may not be capable to expression in dollar terms”.215 It held “[a] degree, even a relatively high degree, of subjectivity is virtually inevitable”.216

The reason that the Environment Court overemphasised objectivity is because crucial to wind farm decisions is landscape. In Project Hayes Judge Jackson defined the landscape as “four-dimensioned in space and time within the given environment” including memorability, perceptions, values, experiences, time,

  1. Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 4 [58]; Johannah Branson Exploring Wind-Hydro Correlation (New Zealand Institute of Economics, Wellington, 2008).
  2. RMA, sch 4, cl 1(b).
  3. Meridian Energy Ltd v Central Otago District Council HC Dunedin CIV­2009­412­000980, 16 August 2010 at [58].
  4. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [702]–[705].
  5. Meridian Energy Ltd v Central Otago District Council HC Dunedin CIV­2009­412­000980, 16 August 2010 at [68] and [93].
  6. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [697].
  7. Meridian Energy Ltd v Central Otago District Council HC Dunedin CIV­2009­412­000980, 16 August 2010 at [107].

216 At [110].

association and views.217 It is unsurprising that later attempts to quantify the landscape value in monetary terms proved insurmountable given the earlier ethereal definition of landscape. This broader definition can be rationalised to be the “natural and physical attributes of land together with air and water which change over time and which is made known by people’s evolving perceptions and associations”.218 This definition brings together the amended Pigeon Bay factors.219 It represents “our sense of, or attachment to, place”.220 In Project Hayes the Environment Court described the Lammermoor Range as “moorland”221 with a “vast ... treeless plateau covered in either soft­textured golden­brown tussock or snow”222 among a soft and undulating landform.223 Evidence of artists and writers who had been enchanted by the Lammermoor Range was led.224 Tall vertical structures were found to visually compromise, and were unable to be absorbed into, the open horizontal landscape.225 The wind farm would create its own.226

Assessments of landscape have proven controversial with wind farm proposals.227 Wind is found in open, elevated and coastal environments. On

  1. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [202].
  2. MainPower NZ Ltd v Hurunui District Council [2011] NZEnvC 384 at [300].
  3. Wakatipu Environmental Society Inc v Queenstown Lakes District Council [2000] NZRMA 59 (EnvC). See also Pigeon Bay Aquaculture Ltd v Canterbury Regional Council [1999] NZEnvC 105; [1999] NZRMA 209 (EnvC).
  4. MainPower NZ Ltd v Hurunui District Council [2011] NZEnvC 384 at [302].
  5. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [283].

222 At [288].

223 At [305].

224 At [308].

225 At [472].

226 At [757].

227 Fraser Clark “Comments in Response to Property Rights, the Public Interest and Global Considerations: The Case of Wind Energy Development” (2007) 7 BRMB 91; Richard Fisher “Wind Energy in New Zealand: Regulatory and Policy Lessons to Date” (2005) 9 NZJEL 307; David Grinlinton “David Grinlinton Replies” (2007) 7 BRMB 80; David Grinlinton “David Grinlinton Replies” (2007) 7 BRMB 92; David Grinlinton “Is Wind Power the Answer to New Zealand’s Energy Needs” (2005) 6 BRMB 71; David Grinlinton “Property Rights, the ‘Public Interest’ and Global Considerations: The Case of Wind Energy Development” (2007) 7 BRMB 62; David Grinlinton “Tilting at Windmills?” (2007) 7 BRMB 75; Nicky McIndoe “Wind Energy Development and Landscape Considerations

— A Response” (2007) 7 BRMB 76; Imke Sagemuller “Legislative and Policy Regime Governing the Generation of Wind Energy in New Zealand” (2006) 24 JERL 165; Janet Stephenson and Seth Gorrie “‘Just Part of Who You Are’: The Hidden Significance of Landscape in the Wind Farm Debate” in Jacinta Ruru, Janet Stephenson, and Mick Abbott (eds) Making Our Place: Exploring Land-use Tensions in Aotearoa New Zealand (Otago University Press, Dunedin, 2011) 185.

the one hand, turbines in such environments can be “majestic and graceful”228 whilst having “elegant, kinetic qualities [that together] are often both spectacular and dynamic”.229 On the other, wind farms exceed the human scale, creating a “disturbed”230 panorama and can inflict “an overpowering, intrusive, and unacceptable presence”.231 This industrialisation of the rural landscape can create a “thicket”232 as a white “picket fence”233 with “serried ranks of tiered rows”.234 Visual incoherence can reign with the “massing or congestion of turbines”235 in a “complex mass of structures ... overlapping ... moving at different speeds”.236 Where turbines are overwhelmingly dominant and have a bearing­down effect on the observer, visual amenity is imperilled.237 In Hauauru ma Raki the potential effect of turbines on the Waikato rural landscape and coastline was described by witnesses as “ugly”,238 “visually offensive”,239 “abhorrent”240 and “unattractive”.241 Ultimately, however, the Board of Inquiry found that there were significant benefits to the project including its supply of renewable energy to Auckland.242 In Project Central Wind (52 turbines, 135 metres total height)243 the Tongariro National Park was of concern because of its status as a UNESCO World Heritage Site with Mts Ruapehu, Tongariro and Ngauruhoe protected.244 The Environment Court found that the accompanying wind farm would not “diminish the outstanding natural characteristics of the Volcanic Plateau in any way”.245 In terms of Mt Ruapehu, its “sheer scale” guarantees that it is “the dominating feature in the landscape”.246

  1. PCE Wind, above n 166, at 55.
  2. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [471].
  3. Day v Manawatu-Wanganui Regional Council [2012] NZEnvC 182 at [2­59].
  4. PCE Wind, above n 166, at 55.
  5. Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 13 [125].

233 At ch 13 [73].

234 At ch 13 [124].

235 At ch 13 [157].

236 At ch 13 [137].

237 At ch 13 [345].

238 Final Report and Decision of the Board of Inquiry into the Hauauru ma Raki Wind Farm and Infrastructure Connection to Grid (13 May 2011) at [700].

239 At [700].

240 At [703].

241 At [703].

242 At [1202].

243 Rangitikei Guardians Society Inc v Manawatu-Wanganui Regional Council [2010] NZEnvC 14 at [13].

244 At [38] and [240].

245 At [243].

246 At [201].

Related to landscape and visual amenity are the cumulative effects of wind turbines. In the Manawatu cumulative effects of the “conglomeration of disparate”247 wind farms “are becoming a concern”.248 With saturation,249 “enough is enough [and] the balance of public opinion is clearly at a tipping point”.250 Turitea (60 turbines, 125 metres total height)251 had a total of 702 submissions before the Board of Inquiry due to filling the only remaining gap on the ranges.252 The problem arises from the spread of the wind farms along the horizon and density but also relates to the differences in design of wind farms.253 For instance, in the Manawatu there are different turbine heights, different tower design (lattice and tubular), different colours as well as different blades (two or three).254 The larger turbines are spaced at greater distances turning more slowly, with the smaller turbines having frenetic activity.255 If built the consented Turitea wind farm will boost turbines in the Manawatu to 346 over about 28 kilometres.256 The ability of landscape views to digest turbines simultaneously (at the same time) or sequentially (one after another) was described by the Board as adverse.257 Nevertheless, in some circumstances accumulation was addressed by the different quadrants that the wind farms occupy as well as views being for a brief period when travelling.258 It should be noted that in 2009259 resource consents were surrendered for Motorimu (80 turbines, 81 metres total height) which proved economically unviable after the Environment Court truncated the broader proposal along the foothills of the Tararua Range in the Manawatu.260

  1. Day v Manawatu-Wanganui Regional Council [2012] NZEnvC 182 at [2­17].
  2. PCE Wind, above n 166, at 105.
  3. Motorimu Wind Farm Ltd v Palmerston North City Council EnvC Wellington W67/2008, 26 September 2008 at [182].
  4. Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 11 [12].

251 At ch 13 [78] and ch 19 [44].

252 At ch 13 [7].

  1. PCE Wind, above n 166, at 89.
  2. Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 12 [5].

255 At ch 13 [73].

256 At ch 12 [5] and ch 19 [44].

257 At ch 13 [257].

258 At ch 13 [254]–[256].

  1. NZWEA “Wind Farms Operating”, above n 165.
  2. Motorimu Wind Farm Ltd v Palmerston North City Council EnvC Wellington W67/2008, 26 September 2008 at [5] and [363]–[367].

The Minister for the Environment called in Turitea not least because the wind farm will be sited on the Turitea Reserve owned by the Palmerston North City Council which is classified as a “local purpose reserve” under the Reserves Act 1977 in order to protect the city’s water supply along with indigenous flora and fauna.261 In 2006 the Council changed the purpose of the reserve to renewable electricity generation. Friends of the Turitea Reserve Society alleged that the decision was ultra vires, made with an improper purpose and in breach of natural justice.262 Baragwanath J discussed the electricity system with the analogy of a swimming pool. Hoses would pour water into the swimming pool while holes would drain the swimming pool. The closer the hose is to a hole, the greater the share of the outflow although it was never certain “how much ... water from a particular hose flows out of a particular hole”.263 This could be thought of in the same way as national (the swimming pool), local (one particular hose) and the consumer (one particular hole) in terms of the electricity system. The argument was that the Council was pursuing a national (rather than local) and private (rather than public) purpose. Baragwanath J found that electricity could be a legitimate community purpose264 and that the revenue generated would be returned to improving the reserves under the control of the Council.265 The Council had also satisfied the requirements of natural justice including objectivity, transparency and consultation.266

Noise from wind turbines is an adverse environmental effect. Some have described the noise as a jet plane that never takes off or a train that never leaves its station.267 Others refer to the noise as innocuous, similar to the hum of a refrigerator. In environmental planning, specified setback distances from wind farms have been implemented to address noise.268 Importantly, “there is no legal right for an existing quiet and tranquil environment to remain so”.269 Noise was

  1. Friends of Turitea Reserve Society Inc v Palmerston North City Council [2007] NZHC 705; [2008] 2 NZLR 661 (HC) at [3].

262 At [7].

263 At [45].

264 At [23].

265 At [20].

266 At [103]–[104] and [155].

  1. Genesis Power Ltd v Franklin District Council [2005] NZEnvC 341; [2005] NZRMA 541 (EnvC) at [116].
  2. Mighty River Power Ltd v Porirua City Council [2012] NZEnvC 213 at [32]. See also

Meridian Energy Ltd v Wellington Regional Council [2012] NZEnvC 148 at [11]–[12].

  1. Re Meridian Energy Ltd [2013] NZEnvC 59 at [190].

a critical issue in Project West Wind (62 turbines, 111 metres total height)270 on the south­west coast of Wellington.271 Noise was also at issue in the adjacent Project Mill Creek (26 turbines, 111 metres in total height).272 Noise from wind turbines is both mechanical and aerodynamic. Mechanical noise is no longer considered a problem.273 Aerodynamic noise will arise from the design of the tower and blades as well as the speed of the blades. Environmental factors will also affect the noise level.274 In relation to noise, special audible characteristics (SACs) which include tonality, impulsiveness and amplitude modulation may, in addition, be a problem.275 SACs refer to the character rather than level of noise.276 At a general level, New Zealand Standard 6808: 2010 “Assessment and Measurement of Sound from Wind Turbine Generators” applies to noise from wind farms. This stipulates that the recommended noise limit is the background sound level (LA90 (10 min)) plus 5 dB (decibels) or 40 dB LA90 (10 min) whichever is greater.277 Where special audible characteristics are present, a 6 dB upper limit penalty is imposed.278 There is, furthermore, provision for high­amenity areas.279 Conditions of resource consents for wind farms usually require a Noise Management Plan. Conditions for Project West Wind went further than the applicable New Zealand Standard by requiring that when background noise is less than 25 dB LA95 (10 min) then the wind farm is limited to 35 dB LA95 (10 min).280 This means that while “strong guidance” is taken from the applicable standard, it is possible “to apply more stringent noise conditions”.281 Detailed provisions also related to SACs.282 The Environment Court found that “[t]he monitoring, measurement and reporting of the sound conditions

... is a demanding and technical undertaking. It behoves Meridian and the

  1. Meridian Energy Ltd v Wellington City Council EnvC Wellington W31/2007, 14 May 2007 at [524], [535] and [584].

271 At [1].

  1. Meridian Energy Ltd v Wellington City Council [2011] NZEnvC 232 at [3] and [395].
  2. Anker and others, above n 168, at 207.

274 At 207.

  1. Standards New Zealand NZS 6808: 2010 Acoustics — Wind Farm Noise (Wellington, 2010) at cl 5.4.2.
  2. MainPower NZ Ltd v Hurunui District Council [2011] NZEnvC 384 at [436].
  3. Standards New Zealand NZS 6808: 2010 Acoustics — Wind Farm Noise (Wellington, 2010) at cl 5.2.

278 At cl 5.4.2.

279 At cl 5.3.3.

  1. Meridian Energy Ltd v Wellington City Council EnvC Wellington W31/2007, 14 May 2007 at [60].
  2. Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 15 [122].
  3. Meridian Energy Ltd v Wellington City Council EnvC Wellington W31/2007, 14 May 2007 at [53].

Council to be diligent[,] open, transparent and helpful.”283 It may well be that turbines neighbouring dwellings might be temporarily stopped if there is non­ compliance.284 When installed, the Project West Wind turbines had SACs which took time for remediation through software changes and the installation of dynamic dampers.285 In Project Mill Creek although the Environment Court took account of these concerns, it found in favour of a consistent wind speed threshold for noise across the whole wind farm of 6 m/s to attenuate noise levels.286 Where the noise conditions are being breached, it is the resource consent conditions which are binding rather than any predictions in adverse environmental effect reports.287 Related to noise is health effects such as sleep deprivation, migraines, epilepsy, anxiety and psychiatric phobias.288 It includes such medical conditions as tinnitus and vibro­acoustic disease.289 However, even in the situation of pre­existing autism, the Environment Court has found that it is not required to protect hyperacusis (sensitive hearing) and individual management is required.290

An adverse environmental effect is on fauna and habitat from wind turbine activity. Collision strike to birds and bats arose in Hauauru ma Raki because of migratory pathways. This required analysis of the effects on migratory shore birds, resident shore birds, international migratory birds, resident bush birds, farm birds, wetland birds and bats. Migratory shore birds travel from the South Island nests to North Island feeding grounds.291 International migratory birds are governed by the Bonn292 and Ramsar293 Conventions which protect avian

283 At [66].

284 At [66].

  1. Meridian Energy Ltd v Wellington City Council [2011] NZEnvC 232 at [110]; Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 15 [56]–[57].
  2. Meridian Energy Ltd v Wellington City Council [2011] NZEnvC 232 at [102].
  3. New Zealand Wind Farms Ltd v Palmerston North City Council [2013] NZHC 1504 at [62]; RMA, s 128; Compare Palmerston North City Council v New Zealand Wind Farms Ltd [2012] NZEnvC 133 at [115].
  4. At [124] and [130]–[133]; Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 15 [13].
  5. Meridian Energy Ltd v Wellington City Council [2011] NZEnvC 232 at [133].
  6. MainPower NZ Ltd v Hurunui District Council [2011] NZEnvC 384 at [442].
  7. Final Report and Decision of the Board of Inquiry into the Hauauru ma Raki Wind Farm and Infrastructure Connection to Grid (13 May 2011) at [501].
  8. Convention on the Conservation of Migratory Species of Wild Animals 1651 UNTS 356 (opened for signature 23 June 1979, entered into force 1 November 1983).
  9. Convention on Wetlands of International Importance 996 UNTS 245 (opened for signature 22 February 1971, entered into force 21 December 1975).

migratory species.294 The bar­tailed godwit (from Alaska) and the red knot (from South Korea) were of particular concern.295 The Board concluded the resource consent conditions seek to achieve no­net­loss through a Biodiversity Remediation and Enhancement Scheme.296 The scheme is designed to protect breeding habitat as well as increase predator control as an environmental offset.297 For international migratory species, an annual sum of $10,000 is proffered.298 Bush birds are of less concern because they do not commonly fly at rotor height.299 In any event, an Ecology Peer Review Panel is to oversee carcass and other monitoring.300 This review includes the power “to require individual turbines or groups of turbines to cease operation if necessary”.301 For bats, the long­tailed and short­tailed bats are nationally endangered. It is thought that moths are attracted to aviation lights and heat of the turbines during night which in turn attracts bats.302 There is also the risk of barotrauma caused by the air pressure effect of blade movement.303 Thus, a bat mitigation programme is usual with translocation of roosts if necessary.304

Broader ecological matters will be affected by construction. Wind farms require significant quantities of concrete which in turn requires water abstraction from rivers or aquifers.305 Sedimentation and siltation of waterways due to construction of roading required for turbine access will also have a negative impact on aquatic life. Tight conditions relating to water abstraction will often be present. For instance, Palmerston North’s water supply is found in Turitea Reserve which had been closed to preserve water quality of the catchment.306 Given that turbine roading requires cut-and-fill areas and that water catchments generally have higher regional rainfall, the potential for landslide was acute.307 The Turitea Board referred to water quality as “a major issue” and Mighty

  1. Anker and others, above n 168, at 173–177.
  2. Final Report and Decision of the Board of Inquiry into the Hauauru ma Raki Wind Farm and Infrastructure Connection to Grid (13 May 2011) at [540]–[543].

296 At [490] and [563].

297 At [520].

298 At [545].

299 At [553].

300 At [563].

301 At [564].

302 At [569].

303 At [569].

304 At [571]–[574].

305 At [590]–[591].

306 Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 7 [1].

307 At ch 7 [35].

River Power was made to indemnify Palmerston North City Council for any changes in water quality.308 The Board was satisfied anyhow that contingency measures and water monitoring would provide “adequate safeguards” to protect water quality.309 Vegetation that would be destroyed during construction would be mitigated by revegetation offsets, weed control, predator control and direct transfer of flora if feasible.310 Biodiversity offsets are typical to ensure no­net­ loss to ecological integrity but the Turitea Board declined several turbines because high ecological values needed protection.311 Aligned with such concerns are effects on further fauna, and their habitat, such as on invertebrates (insects) and herpetofauna (lizards and frogs) in any wind farm envelope.312 In Waitahora (52 turbines, 150 metres in total height),313 east of the Manawatu, the limestone karst formations that the wind farm was to be built on gave rise to underground caves, tunnels and holes due to extensive underground water.314 It was noted that stalagmites, stalactites, flow stones and associated subterranean fauna are intolerant of change but that there was a low risk of disturbance.315

Wind farms are predominantly located on rural land with associated rural activities. In Awhitu (18 turbines, 90 metres in total height),316 Isola Stables had about 30 racehorses on the property at once and the Isola Equestrian Facility is purpose­built for horse­riding events.317 Horses are flighty and could potentially be affected by the visual and noise stimuli. The Court found that there had been an overstating of the risks,318 that horses needed to be introduced, habituated and acclimatised to the wind turbines,319 and that refinements in design had “all but eliminate[d] the potential” risks of the wind farm on horses.320 In Waitahora, Kia Ora Stud runs a thoroughbred horse stud as well as an agistment service.321 Similar evidence was led as to the real and serious risk to the safety of horses

  1. At ch 7 [49]. See also Health (Drinking Water) Amendment Act 2007, s 69U.
  2. Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 7 [71].

310 At ch 8 [36].

311 At ch 8 [79].

  1. Final Report and Decision of the Board of Inquiry into the Hauauru ma Raki Wind Farm and Infrastructure Connection to Grid (13 May 2011) at [575]–[583].
  2. Contact Energy Ltd v Manawatu-Wanganui Regional Council [2010] NZEnvC 406 at [2].

314 At [78].

315 At [103].

316 Genesis Power Ltd v Franklin District Council [2005] NZEnvC 341; [2005] NZRMA 541 (EnvC) at [9]–[11]. 317 At [132].

318 At [164].

319 At [152].

320 At [165].

321 Contact Energy Ltd v Manawatu-Wanganui Regional Council [2010] NZEnvC 406 at [59].

at the property. The Court found that “[l]ife is not risk­free, and the Act does not require the elimination of all risk”.322 Risk to horses “is not substantiated by experience in comparable situations”.323 In Mt Cass, where three alternative proposals as to wind turbine design were consented,324 the potential loss of agricultural production was cited.325 This is because “[t]he ability to undertake aerial top­dressing” is often raised as a constraint.326 Of course, any aviation including fixed-wing aircraft and helicopters need to “keep clear of [power] lines” and turbines.327 Additionally, farmers often emphasise the “working landscape”328 and that views (and noise) for dwellings is just as important as the “amenity presently enjoyed [in] their workplace” outside.329 In this context, high levels of construction traffic pose a menace (even if temporary) to rural ways of life.

Wind turbines have the potential to catch fire for a multitude of reasons including transformers, wiring and lightning. Evidence of structural failure is provided by a prototype wind turbine in Canterbury which had its rotor ripped out and its blades severed in 2005 when “the wind suddenly reversed direction and strengthened, from north­westerly to south­westerly, in about 90 seconds”.330 Consistent with the Forest and Rural Fires Act 1977, a Fire Management Plan is usually desirable.331 Mt Cass held that the “incremental risk of a fire from a wind turbine ... should be minimal”.332 Yet such a plan “will provide acceptable procedures for the management of the risk of fire and suppression if a fire should occur”.333 In Turitea, Palmerston North City Council is required to have a Fire Management Plan as the rural fire authority.334

322 At [71].

323 At [73].

324 MainPower NZ Ltd v Hurunui District Council [2011] NZEnvC 384 at [485].

325 At [73].

  1. Final Report and Decision of the Board of Inquiry into the Hauauru ma Raki Wind Farm and Infrastructure Connection to Grid (13 May 2011) at [974].
  2. At [978]. See also Hart v Civil Aviation Authority HC Timaru AP9/99, 6 October 1999; Civil Aviation Authority of New Zealand “Civil Aviation Rules” (1 March 2007) <www. caa.govt.nz>, pts 91 and 137.
  3. MainPower NZ Ltd v Hurunui District Council [2011] NZEnvC 384 at [307].

329 At [362].

  1. Veronika Meduna “Wind Energy in New Zealand” (2009) Te Ara: The Encyclopedia of New Zealand <www.TeAra.govt.nz>.
  2. MainPower NZ Ltd v Hurunui District Council [2011] NZEnvC 384 at [108].

332 At [115].

333 At [122].

334 Final Report and Decision of the Board of Inquiry into the Turitea Wind Farm Proposal (6 September 2011) at ch 7 [23].

This is complemented with Mighty River Power’s Emergency Response Plan incorporating fires.335 In terms of the Building Code, the structure of a building is to have fire resistance proportionate to any fire hazard and the height of such a building.336 Consideration is also to be given to the physical conditions likely to affect building stability such as earthquakes.337

Recreation, tourism and heritage protection were key components to the Environment Court’s declining of resource consents in Project Hayes and arguably Meridian’s withdrawal of the project altogether. The Environment Court referenced walkers, hunters, trampers, cross­country skiers, angling, boating, four­wheel driving, mountain biking and horse riding.338 In combination with tourism related to the Central Otago Rail Trail,339 activities included photography, botanising, art and filming.340 The assumption that outdoor recreation could be divorced from its surroundings was explicitly rejected as “people go to an area for the quality of the experience”.341 The gold­mining history of the site was examined with the Old Dunstan Road,342 Styx Jail and Hotel being held to be “a heritage landscape of interest”.343 By contrast, tourism relating to Waipara wineries in Mt Cass was found to be “a destination choice in their own right” and that a correlation did not exist between “uncluttered landscape and fine wines”.344 Rather “a wind farm may increase tourism”.345 However, with the saturation of landscapes with turbines, such a conclusion is obviously questionable. In the proposed Project Hurunui (31 turbines, 131 metres total height)346 nearby the Court rejected the submission that the wind farm would have a disastrous effect on tourism and stated that all business owners need to be responsive to change.347 When considering the effect on property values, the Court went on to hold that there would be no loss of value

335 At ch 7 [24].

  1. Building Regulations 1992, sch 1, C.3.3.
  2. Schedule 1, B1.3.3.
  3. Maniototo Environmental Society Inc v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [69].

339 At [70].

340 At [81].

341 At [83].

342 At [207].

343 At [69].

344 At [372]–[373].

345 At [374].

346 Re Meridian Energy Ltd [2013] NZEnvC 59 at [10] and [245].

347 At [478].

because not all prospective purchasers would regard wind turbines negatively.348 As a side note, wind turbines have the potential to affect radio and television reception. Cases have consistently held that any interference “must be rectified at full cost” to the wind farm operator.349

A consistent challenge to wind energy is Maori association with the landscape. This led to the rejection of 37350 and a reapplication for 34 turbines351 at 130 to 135 metres in total height352 in Te Waka which was the second stage to Unison Networks Ltd’s enterprise described above. The turbines were to be to the south and west of a distinctive feature known as Te Waka with the nearest turbine 400 metres from the feature.353 Te Waka is a distinctive landform which represents a waka with a hull, sternpost and wake. The feature is rich in lore, history and spiritual significance.354 It includes a rock shelter and moa­hunting site of archaeological significance.355 The Court considered ss 6(e), 7(a) and 8 of the RMA which relate to Maori concerns. The Court noted the “depth of emotion” and “attachment of the people to this area”.356 The feature was not an outstanding landscape feature in the district plan but was seen as a key landmark in myth, legend and reality.357 The Court concluded that this was an outstanding landscape and that “it is not open to us to embark on a major redesign of the project”.358 On appeal to the High Court, Potter J upheld the Environment Court’s decision that the district plan was not determinative of outstanding natural landscapes and that the Environment Court was entitled to make its own judgment on the evidence.359 In the reapplication for 34 turbines,

348 At [495].

  1. Final Report and Decision of the Board of Inquiry into the Hauauru ma Raki Wind Farm and Infrastructure Connection to Grid (13 May 2011) at [755].
  2. The Outstanding Landscape Protection Society Inc v Hastings District Council EnvC Wellington W24/2007, 13 April 2007.
  3. Unison Networks Ltd v Hastings District Council EnvC Auckland W11/2009, 23 February 2009.
  4. The Outstanding Landscape Protection Society Inc v Hastings District Council EnvC Wellington W24/2007, 13 April 2007 at [2]; Unison Networks Ltd v Hastings District Council EnvC Auckland W11/2009, 23 February 2009 at [145].
  5. The Outstanding Landscape Protection Society Inc v Hastings District Council EnvC Wellington W24/2007, 13 April 2007 at [5].

354 At [8].

355 At [37].

356 At [81].

357 At [23].

358 At [108] and [117].

359 Unison Networks Ltd v Hastings District Council HC Wellington CIV­2007­485­896, 11 December 2007 at [81].

while the Court recognised that an outstanding natural feature does not preclude development,360 the proposal would “visually intrude quite markedly” on views and “would not serve to meet the needs” of protecting Maori values under the RMA.361 The Maori and landscape alliance proved a persuasive basis for declining the application.

4.5 Conclusion

Wind energy is often seen as the poster boy of mitigating greenhouse gas emissions. As New Zealand’s winds are world renowned, New Zealand has begun extensive commercial exploitation of its wind resource even though wind can be at times intermittent and unpredictable. Criticisms of wind farms relate to landscape, visual, cumulative and noise effects. Other adverse environmental effects include avifauna, ecology, traffic, fire, rural activities, recreation, tourism and Maori values. Wind energy is being developed because due to its environmentally benign nature it usually (but not always) meets the purpose of sustainable management under the RMA. Where the purpose of sustainable management has not been satisfied, wind farm proposals have been truncated and redesigned but rarely declined. This bodes well for New Zealand’s greenhouse gas emissions targets, but as New Zealand has followed the commercial rather than community model of wind farms, New Zealand would do well to avoid resistance.362

5. CONCLUSION

Drawing the threads of this article on geothermal and wind energy together, it is seen that renewable energy is at the forefront of New Zealand’s attempts to reduce greenhouse gas emissions. The New Zealand Government’s target for renewable electricity generation is being faithfully upheld. In addition to greenhouse gas reductions from the utilisation of renewable resources, renewable energy allows diversification, security of supply and reductions in transmission losses. New Zealand has adopted a no­ownership, res communes model to the ownership of resources integrated with usufruct rights which can create tensions associated with land ownership. The application of this principle in the context of the RMA means that there is friction between the Act’s purpose

360 Unison Networks Ltd v Hastings District Council EnvC Auckland W11/2009, 23 February 2009 at [142].

361 At [144] and [159].

362 PCE Wind, above n 166, at 112–113; Maniototo Environmental Society Incorporated v Central Otago District Council EnvC Christchurch C103/2009, 6 November 2009 at [684]– [687]; Re Meridian Energy Ltd [2013] NZEnvC 59 at [35]–[36].

of sustainable management and adherence to the “first-in first-served” principle of resource allocation. Resource conflicts further highlight that limits to renewable resources are being found. The adverse environmental effects of the use of renewable resources such as geothermal and wind energy for electricity generation are numerous but are not insurmountable. Maori cultural concerns form an integrated perspective to these environmental effects. The heart of such concerns over the development of geothermal and wind energy for electricity generation is sustainability.

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