New Zealand is one of the world’s pioneers in using conventional geothermal power – seven per cent of its electricity is presently obtained from that source. PEi takes a close look at this oft-ignored renewable and sustainable source of electricity generation and finds out why it is proving so successful down under.

Paul Grad

The first 10 km of the earth’s crust contains 50 000 times as much heat energy as all the planet’s oil and natural gas resources, according to the Earth Policy Institute – an environmental organization based in Washington, DC, US.

This heat is called geothermal energy. It comes in three main forms: superheated water trapped in cracks and cavities in rocks at depths down to several kilometres; hot water springs and steam that made it to earth’s surface, sometimes in the form of geysers; and hot dry rock – or hot fractured rock – in the form of heated rocks, also down to depths of a few kilometres.


Geothermal power plants, such as the 100 MW Mokai plant, generate 10 per cent of New Zealand’s electricity.
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The heated water – or a mix of water and steam – is heated by magma, that is by the heat in the core of the earth. Hot, dry rock is heated by the natural radioactivity of the earth’s crust. In this case, the heat can be recovered by drilling holes in the rock, injecting water through the hole, and collecting the superheated water from another hole drilled on the site.

One of the pioneers in the commercial exploitation of geothermal energy is New Zealand, which is especially rich on geothermal resources. Lately, there has been much activity in the country in the development of new geothermal power stations and the expansion of existing ones.

Late last year the New Zealand Geothermal Association (NZGA) held a celebration to commemorate the commissioning, 50 years ago, of the first unit at Warakei power station. According to NZGA, “the Warakei power station, with its steamfield separators – to separate water from steam – opened the door to large-scale commercial development of wet steamfields internationally. Previously development was focused on the relatively rare dry steamfields”.

Geothermal increasingly important to New Zealand

Geothermal energy is becoming increasingly important to New Zealand. The country now obtains 10 per cent of its electricity from geothermal fields, and that is set to rise. Geothermal energy could be generating 20 per cent of New Zealand’s electricity by 2012.

According to the Ministry of Economic Development, New Zealand’s available geothermal resource base is 2600 MW of electrical equivalent, or about 75 per cent of the country’s peak demand. Only about 15 per cent of the maximum potential resource has been developed.

The country is not the largest user of geothermal energy, however. According to the International Geothermal Association (IGA), in 2005, the largest user was the US, with a total of more than 2500 MW of installed generating capacity. Next was the Philippines, with more than 1900 MW. The figure for New Zealand was 430 MW. Iceland had about 300 MW of installed capacity.

According to Mark Taylor, a geothermal analyst in Washington, DC, US, high fossil fuel prices and concerns about global warming have jump-started the US geothermal industry, along with federal tax credits and state laws mandating the wider use of renewable energy.

Global investment in geothermal energy was about $3 billion in 2007, said Taylor. Although it is still a very small amount, compared with the $116 billion invested in wind and solar, it represents a 180 per cent increase over the 2006 investment, he said.

Cost-competitiveness of geothermal power

Geothermal energy costs 4c to 7c/kWh, said Taylor. That makes geothermal energy competitive with wind energy and significantly cheaper than solar energy. He said geothermal facilities occupy a small fraction of the space required for wind and solar farms. Also, the energy can be harnessed any time, irrespective of weather conditions. There is also the advantage of minimal greenhouse gas emissions.

Although New Zealand is not the largest user of geothermal energy, it is especially well placed to harness that resource, with its rich geothermal fields, and long experience in developing geothermal resources. New Zealand has developed a high level of expertize in geothermal development, and it has marketed this form of power in several countries, including the Philippines, Indonesia and Australia.

According to NZGA executive officer Brian R White, the reasons for the success of geothermal development in New Zealand are manifold: there are consentable geothermal resources available with more than 1200 MW capacity; the development of the more productive, higher temperature resources is commercially viable; the development can be done in stages which reduces risk; long-term relationships between landowners (including Maori Trusts) and developers is leading to resources access; and because geothermal energy has attractive features such as independence from weather, good baseload generation, low emissions and proximity to major load centres.

Renewables target boost geothermal potential

The development of geothermal energy will be boosted by the target of an additional 30 PJ (petajoules) of consumer energy from renewable resources by 2012, set by the New Zealand government through its National Energy Efficiency and Conservation Strategy.

Geothermal resources are of three main types: high temperature – up to 350 ºC – at economically drillable depth; moderate to low temperature – up to 140 ºC; and very low temperature, close to ambient temperature.


Electric power generation from thermal steam at Wairakei, New Zealand.
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Very low temperature resources can be exploited for heat applications using heat pumps to provide space heating and cooling. This is a practical proposition almost everywhere in New Zealand where some groundwater occurs, and offers opportunities for electricity conservation, although those resources cannot be used for electricity generation.

Moderate temperature resources can be used for electricity generation, but are unlikely to be economically competitive. Therefore, commercial operation is limited to high-temperature resources.

Most high-temperature geothermal resources produce a mixture of water and steam at temperatures up to 350 ºC. The energy can be used to generate electricity in geothermal power plants or used directly for a range of purposes. Commercial exploitation involves drilling wells typically 1000 m to 3000 m deep. When hot water flows up the well, the pressure release allows some of the fluid to boil into steam, resulting in a two-phase mixture at the surface. The water and steam are separated before use.

According to the NZGA, energy use at various field temperatures is: 30 ºC to 69 ºC thermoculture, bathing; 70 ºC to 140 ºC, space and water heating, drying; 140 ºC to 220 ºC, drying, process heat, binary electrical plant; above 220 ºC, steam turbine and binary electricity or process steam.

Several energy generation technologies are employed at geothermal sources. At the beginning of geothermal energy exploitation, geothermal power plants used only the separated steam from geothermal steamfields, passing it through a condensing steam turbine. Separated water was either reinjected or discharged, usually to a river.

More recently binary plants have been used. Here the separated brine – which may be at temperatures higher than 130 °C – is used to boil a secondary working fluid, which in turn drives other smaller turbines in a closed cycle.

The latest technology involves combined-cycle plants utilizing a steam turbine with binary plant heat exchangers acting as the condensers, and additional binary plants operating on the separated brine.

Variation on the binary cycle

A variation of the binary cycle is the Kalina cycle, which uses an ammonia-water mixture, rather than an organic fluid such as isopentane as the working fluid.

In New Zealand, high-temperature geothermal fields are located mostly in the Taupo Volcanic Zone, in the North Island. Another high-temperature field is located at Ngawha in Northland. Moderate to low temperature systems are widely scattered. Of the country’s nearly 130 identified geothermal areas,14 are in the 70 °C to 140 °C range, seven in the 140 °C to 220 °C range, and 15 in the above 220 °C range.


7.3 MW of electricity is produced here at Mokai 1A. The plant is fully owned by a Maori trust.
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The Taupo Volcanic Zone includes geothermal sources with temperatures up to about 350 °C at depths of less than 5 km. Individual fields in that area are typically about 12 km2 and spaced 15 km apart.

The only high-temperature field outside the Taupo Volcanic Zone is the Ngawha field, located 6 km east of Kaikohe in Northland. Current development there is a joint venture between local Maori interests and electricity network company Top Energy. Top Energy commissioned two 5 MW binary units in 1998. Expansion at Ngawha brought the project up to a total of 25 MW.

The Wairakei-Tauhara system includes the Wairakei field located 8 km north of Taupo and the Tauhara field to the southeast. The Wairakei power station is owned by Contact Energy Ltd – New Zealand’s leading generator of geothermal electricity, with three power stations in the Taupo region, producing about 5 per cent of the country’s total electricity.

The field’s annual generation has averaged 1250 GWh, equivalent to a load factor of 93 per cent. Present output is 140 MWe. Some 150 wells have been drilled there. Maximum temperature measured at Warakei was 271 °C. About 5300 tonnes of fluid per hour is currently taken from the reservoir for this station.

Some of the steam is taken directly from shallow dry steam production wells (down to 500 m depth) and piped to the turbines. Separated water is used to provide fluids for the Netcor tourist facility, and as heat source for a prawn farm adjacent to the power station. About half of the separated water is reinjected and half is discharged.

New process heat supply

At Tauhara, more than 400 shallow wells extract heat or steam or water for domestic, commercial and other uses. Contact Energy commissioned a new 20 MWth process heat supply for kiln drying. Four deep wells drilled at Tauhara have found higher temperatures than Wairakei. The maximum temperature recorded was 279 °C.

Contact Energy is planning to build three new power stations in the Taupo region. The plans involve replacing the 50-year-old Wairakei power station with a new station at Te Mihi, which will be powered with steam from the Wairakei steamfield.

The Te Mihi power station will produce up to 220 MW of electricity. The first stage of the Te Mihi project will be commissioned in 2011. It is expected to lift net electricity generation by about 574 GWh/a.

The 29 MWe Rotokawa power station – a geothermal combined cycle station from Ormat Technologies, Inc, Nevada, US – was commissioned in 1997 and expanded to 35 MWe in 2003. Construction is underway there of a 132 MW power station.

The Mokai geothermal field, located 20 km north of Taupo, has some of the hottest geothermal wells in New Zealand, with down-hole temperatures up to 326 ºC. The Mokai power station was commissioned in 2000.

It is the first in New Zealand to be fully owned by a Maori trust. Mighty River Power, a state-owned energy business, has been contracted to operate and maintain the Ormat combined-cycle station, which has installed capacity of 55 MWe. A 39 MWe expansion of similar design was commissioned in 2005. A further 17 MW binary plant expansion was installed at the station in 2007.

The Kawerau field was the first production field in New Zealand in 1957. The 100 kW Kawerau power station was commissioned in August 2008. This is the largest single condensing geothermal turbine in the country’s history. An independent 8.3 MW binary cycle plant was also commissioned in September 2008.

More than 900 shallow wells have been drilled at the Rotorua geothermal field, to provide hot water for private homes, hospitals, schools, hotels and other industrial uses. Many other geothermal fields are being exploited or under development or expansion.

NZGA’s Brian White said the NZGA is preparing a document outlining the cost of geothermal power generation. He said: “Given that most future developments will be of a larger scale, typical investment will be of the order of NZ$4/MW ($2/MW) installed. With approximately 1000 MW of viable, consentable generation, this indicates upcoming investment of the order of NZ$4 billion”.