And although such a huge renewable project hard on the heels of last week's national energy strategy will please government, it throws up some of the problems generators will face in trying to meet the target of 90 per cent of electricity from renewable sources by 2025.

That's because Contact has also announced it wants to build a 100 MW gas plant in neighbouring Strathmore, to help even out the variable electricity supply from the proposed wind turbines.

Because wind levels are uneven, there has to be an alternative energy supply on hand for wind farms in order to provide quick "peaking" assistance when the turbines' production drops.

The site is significant because it is close to the high load areas of Auckland and Hamilton, so would put less stress on the lower North Island and South Island's transmission grid. It will also improve Contact's ability to service North Island retail customers from its own supply.

The national energy strategy discourages thermal (gas or coal) powered electricity generation, because it's a big greenhouse gas emitter. The government has warned companies off new thermal generation except for reserve capacity, for example if it is only to be deployed in dry years.
But gas is easy to fire up for peaking supply.

Energy minister David Parker has suggested that hydro should be the first energy source made available for peaking. Contact doesn't yet have resource consents for the development, but has embarked on an extensive buy-up of nearby properties, which should help avoid local opposition.

And it does have consents already for a new gas development at Otahuhu, Otahuhu C, which would be a 250 MW baseload generator - that is, it would run all the time. It has been Contact's bargaining chip for more incentives to build renewables since the consents were announced last year.