By Tracy Withers
Jan. 8 (Bloomberg) -- Meridian Energy Ltd., New Zealand’s biggest electricity generator, is spilling water at its largest dam for the first time in almost four years as wet weather fills hydro storage lakes beyond their capacity.
About 200 cubic meters (52,800 gallons) a second of water is being spilled from Lake Benmore on the nation’s South Island, Claire Shaw, a spokeswoman for Wellington-based Meridian, said in an interview. Water began spilling from the nearby Lake Tekapo and Lake Pukaki in late December and that has flowed into Benmore.
“It’s the nature of a hydro system,” she said. “When we get to the top of the bucket that’s what has to happen. There’s too much water.”
New Zealand, which relies on dams for more than 60 percent of its power, is developing wind farms and other generation options as droughts regularly affect lake inflows. Last year, industrial users, including Rio Tinto Group’s Tiwai Point aluminum smelter, had to cut output as lake levels plunged, pushing power prices to records.
Storage in hydro lakes across New Zealand was 35 percent more than average yesterday. Tekapo and Pukaki make up 55 percent of national storage. Storage had slumped to less than 50 percent of average in June and July last year prompting a public power conservation program.
Power prices in the South Island have fallen 51 percent the past week, according to an index compiled by M-co, which operates the wholesale power market. Prices at Benmore are less than NZ$1 a megawatt-hour compared with more than NZ$100 three months earlier.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
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