NZ Windfarms is using a new innovative design for the foundations at its wind farm near Palmerston North, reducing the amount of concrete used by 40 per cent.

NZ Windfarms' chief executive Chris Freear said the foundations go into the soil much like a tree root and used between 40 and 50 cubic metres of concrete compared with the 64 cubic metres used in the original design.

"The foundations are smaller and smarter and reduce earthworks by about 60%."

The listed wind farm developer worked closely with Windflow Technology, which came up with the design. Windflow is supplying its 0.5 megawatt machines for the 96 turbine $90 million Te Rere Hau development on the Tararua Ranges. It is being developed in a joint venture with a consortium of Australian infrastructure investor Babcock and Brown, and power company NP Power.

The new design would save "thousands" of dollars, but foundations probably made up less than 10% of the development's costs, Freear said.

In an update on the New Zealand Exchange, Freear said work had begun on erecting the 28 turbine towers in stage two.