Meridian wind farm rejected

State power company Meridian Energy is looking at its options to fight an Environment Court rejection of its huge $2 billion wind farm in Central Otago.

The majority decision from the Environment Court concluded that the wind farm of up to 176 giant turbines was too large for the special landscape values of the Lammermoor Range.

Meridian can appeal the decision to the High Court only on points of law, spokesman Alan Seay said. The grounds for appeal were quite narrow.

"There may be other options but I'm not going to speculate what they might be. The appeal to the High Court is one avenue," Seay said.

Meridian would examine the 350-page decision before deciding what action to take.

Environment Court Judge Jon Jackson said while the Project Hayes wind farm would have some economic benefits the environmental cost was too high.

"The landscape should be protected and we find that is not achieved by the Meridian proposal," he said.

Seay called the court's decision disappointing. Meridian had already spent $10 million on Project Hayes.

The project was ambitious. The 630 megawatt wind farm would have been big by world standards and the largest in the southern hemisphere. It would have been as much as 8 per cent of the installed power generation in New Zealand.

Other wind farms in New Zealand are considerably smaller. The next biggest is Meridian's 140MW wind farm, West Wind at Makara, on the outskirts of Wellington.

Seay said the wind farm proposal, covering 92 square kilometres on the Lammermoor Range, would have provided the South Island with a valuable insurance policy for when hydro water storage was low.

Christchurch electricity networks company Orion is also disappointed. Chief executive Roger Sutton said power supply was in good shape now but in the next three to four years the South Island could become increasingly dependent on power transmitted from the North Island.

"How dependent we become depends on whether some other South Island projects end up being built," Sutton said.

"In the short to medium term New Zealand is in reasonable shape but what we do want is as many projects considered as possible to give as much security to the electricity customers as we can."

Wind farms worked well with hydro power. Any new power generation helped to keep a lid on wholesale prices, Sutton said.

Electricity industry specialist and commentator Brian Leyland, who was an expert witness for one of the opponents of Project Hayes, said after skimming the 350-page decision it looked like the Environment Court had made its judgment based 80 per cent on Central Otago's landscape and scenic qualities and 20 per cent on the project's dubious economics.

The court decision was critical of the inadequate presentation by Meridian of economic data and analysis to support the proposal and of government support.

The decision said it was remarkable two governments had endorsed the project without demanding in-depth cost-benefit analysis.

Leyland told the wind farm hearing nine months ago that the wind farm would produce most of its power in the spring when the wind blew most and not enough in autumn and winter.