Private Development of the Paul Wilson Hydro Station in New Zealand

Licensing and financing of large hydroelectric facilities in New Zealand is difficult because this is a mature market. On the other hand, small hydro (with a capacity of less than 10 MW) is an increasing part of the electricity equation for New Zealand because it is proving easier to acquire consenting and financing for these types of facilities.

The 2.3-MW Paul Wilson Station, which was commissioned in September 2010 and officially opened by Deputy Prime Minister, Bill English, in July 2011, is just one example of how small hydropower has recently been implemented in the country. What makes this hydro station particularly different is that it is the first such scheme to be privately financed, developed and operated for many years. English has even called small hydro developments "the face of the future" in the country's electricity market.

The run-of-river project, a partnership between the Wilson and Hore families, is located within Beaumont Station, a 70,000 acre (2835 ha) high-country farm owned by the Hore family on the South Island. The Wilson family developed 90% of the project, which draws water from the Tallaburn River, a tributary of the Clutha River.

The water intake follows a 19th century gold-mining cut through a sharply incised rock gully. The fact that miners had previously constructed a water conveyance was key to proving the location could be turned into a hydropower canal for 21st century use.

The plant is designed to generate a predicted annual average of 12 GWh, and it generated 14 GWh in its first year of operation.

Developing the Paul Wilson Station

Jeff Wilson provided the initial impetus for the scheme and overall management, based on his previous experience as an electrician and station operator of several hydroelectric schemes. His sons Paul, a civil engineer, and Jimmy led the project design and construction teams. Jeff's wife, Sue, managed all finances. Together, the Wilsons formed a company called Talla Burn Generation Ltd., which managed all primary contracting work for the station, including feasibility investigations and resource consent applications. They also completed all civil and hydraulic design and project management (including procurement) and now manage the hydro scheme's operation. Craig Scott with MWH Global, Ian Walsh with Opus Consultants and Santilal Parbhu of Scorpion Engineering provided design, review and guidance support throughout the project's development.

The Paul Wilson project took only one year to gain initial consenting (licensing), compared with the three to 10 years required for most large commercial projects in the range of 30 to 200 MW. The knowledge of the families involved was a factor in the speed of this consenting process.

The geology of the site was challenging, with much of the soil being unstable and prone to erosion. Therefore, extensive drainage and slope stability mitigation was incorporated during construction. The variability of the conditions forced the Wilson family to be very hands-on with its development, including amending the engineering design several times.

The hydro scheme operates with a 252 meter gross head and has a 1.1 m³/s flow. It involves a diversion weir that directs water to 4.6 km of canal that runs through rough terrain and a weathered schist with a dip foliation generally out of slope. The intake is through a 2 meter cut in a steep gorge, which was originally diverted by a mass of rock. It is now strengthened with a concrete weir using railway irons as a debris barrier, which is a robust design for a harsh alpine environment. A small headpond at the end of the canal allows silt to settle and helps stabilize flow fluctuations. The penstock slope is 30 degrees, providing a sharp fall over a short distance. The penstock is 700 lineal meters of epoxy-lined steel with diameters between 600 mm and 700 mm, imported from Thailand.

Improvised designs are also evident throughout the construction. Because of schist in the water race, major excavation and extensive compaction of backfill was required. The original 4 ton digger struck rock and proved inadequate, and a 20 ton digger was equally unsuitable for the job. A 70 ton digger was purchased from a local quarry, but the canal design had to be amended to take advantage of its 2 meter bucket. This ability to adapt and remain flexible throughout the project was key to its success.

Procurement and commissioning

Issues with procurement and commissioning also forced the Wilson family to be flexible and adaptive. The hydro scheme uses a twin-jet Pelton turbine with internal spear control, synchronous generator and 600 mm-diameter ball valve. Equipment was procured from Lisong of China, which Paul Wilson assessed by visiting several Chinese factories before purchasing. The quality was considered high and the cost was 40% lower than comparable equipment. However, issues occurred with the time frames, specifications and support during construction of this equipment, which resulted in a six-month delay in its completion.

Despite the shortfalls, the Wilson family was satisfied that they got a great deal on a good-quality product. The Paul Wilson project was commissioned in September 2010 at a completed cost of US$400,000 per GWh or US$2.3 million per megawatt installed.

Further complications arose from the post-commissioning use of the emergency penstock intake head pond. It started to create erosion, which breached consents, and remedial work was performed to reduce sedimentation and protect against further erosion. Tragically, during part of this work, Paul Wilson drowned while collecting water samples in a rising river. In his honor, the scheme carries his name.

Distributing electricity

Identifying a suitable alignment for distributing power to residents proved to be one of the most challenging aspects of the project. Because of local opposition, the originally planned route had to be entirely replanned. The new route includes 21 km of 33 kV transmission line running both overhead and underground through a residential area.

Power generated by the station is sold to energy retailer Pulse Energy under a fixed price contract, which was a requirement to gain initial project financing. Over its first year, the river flow and generation has been higher than predicted due to an above average snow fall and the slow release of water into the river. The scheme has no storage, but there may be future opportunities on the Hore farm.

Official opening

The Paul Wilson Station was officially opened by New Zealand's Deputy Prime Minister English on July 29, 2011. English said at the opening that the two families behind the Talla Burn company have taken a considerable financial risk, and it was fantastic to see a project like this come to fruition. "The scheme is a tribute to the practical wisdom and skills of the people in this part of the country," he said. English has also said he wants to ensure the New Zealand electricity market is competitive and allows small operators to set up and put electricity into the grid, as a mechanism to help keep electricity prices under control.

The station has limited operating costs, which makes it easier for the family to maintain. Furthermore, according to Jimmy Wilson, "the scheme will be in our family for the long term. It is almost like having a high-country farm. We see this not so much as ownership but as stewardship."

Future opportunities

The New Zealand electricity sector is dominated by a small number of large organizations, several of which are owned by the government. However, new regulation allows for small private companies to more effectively engage in the marketplace. In addition, they have typically found it easier to secure both project consenting and financing as compared to larger operations. This, mixed with a projected growth in electricity demand, particularly for the booming agricultural sector, means New Zealand offers a lot of potential for more small privately-owned hydroelectric schemes to be developed in the future.

Craig Scott is business development leader, hydro with MWH Global. Sue Wilson is office manager with Talla Burn Generation Ltd., owner and developer of the 2.3 MW Paul Wilson Station.