New Zealand's increasing reliance on wind-generated power will mean bigger electricity bills for consumers.

Electricity industry commentators say Kiwis are just starting to pay for the cost of big wind farm developments and the lack of generation when the wind stops blowing.

They say further power price rises are a matter of when, not if, based on high average wholesale, or spot prices during the past couple of months.
Last week, national spot prices hovered between $.14 and $.17 ½ a kilowatt hour (kWh), about three times the levels year ago.

Power consultants John Noble, of Christchurch, and Bryan Leyland, of Auckland, believe the persistently high spot prices means consumers are on the cusp of having to pay for higher-cost electricity from renewable sources, mainly wind.

Continuing high wholesale prices lift contract prices for electricity and those extra costs are passed on to consumers. Wind-generated electricity costs about $.10 a kWh compared with about $.06 a kWh for hydropower and about the same for thermal-generated power.

Mr. Noble said New Zealanders were beginning to pay for wind power and would have to get used to that. "Two things are going to hit us," he said.

"First electricity companies need to get a return on their investment in wind, which is going to push prices up. Second, they will claim the risk of wind energy, because it is so intermittent, is so high they will have to raise prices to build back-up generation."

Mr. Leyland said wind farms were vulnerable to sitting idle in light winds.

"They call wind ‘intermittent', but the best word is unpredictable. There's a blind faith that wind power would provide the electricity that we need," he said.

"The Government says we are going to need some back-up, but really it's, ‘Oh, look, we're building all these lovely wind farms."

"Every time the wind drops, the prices scream up."

Editor's note: This article only appeared in the print edition of the paper.