Tauhara II Geothermal Development Project

Presentation to Enterprise Lake Taupo

Craig Stephenson – Environment and Land Manager

28 July 2010
Content

Contact – who we are

How geothermal works

Tauhara II project

© Contact Energy Limited 28 July 2010 Tauhara II 2

Contact – who we are

Contact is New Zealand’s largest private electricity operator – we are not owned
by the Government
We are owned by:
• Origin Energy (Australia) – 51%
• 80,000 individual New Zealand shareholders; more New Zealander’s have shares
in Contact than in any other company.
Some of our leaders (most of them New Zealanders):
• Whaimutu Dewes – Director
• David Baldwin – Managing Director
• Graham Cockroft – Chief Operating Officer
• James Kilty – Project Director, Renewables
• Ulrich Biesenbach, GM - Geothermal
We directly employ over 1000 people throughout New Zealand

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Contact – our values

Our values guide our behaviour – the way we treat each other and
our stakeholders
• First - being an intelligent and responsible leader
• Fresh - we dare to be different
• United - working together to a common goal
• Open - building open and enduring relationships

“Be the neighbour you want”

We are passionate about our role in securing a

sustainable future for New Zealand

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A quick overview of Contact’s operations

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 The security of supply benefits

NZ Electricity Supply Mean Demand Profile

8,000

7,000

6,000

5,000
MW

4,000

3,000

2,000

1,000

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025
Geothermal Hydro Gas Coal Wind New Generation Demand

• Geothermal is critical to ensuring New Zealand’s security of supply; both meeting

demand growth and facilitating the retirement of old thermal plant
• Vital in replacing the 1,000 megawatts of coal-fired generation at Huntly with
renewable, baseload energy

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 Geothermal is New Zealand’s most cost effective fuel type

Entry Limit Price

180
160
140
120
$ / MWh

100
80
60
40
20
0
$7.10/GJ

$15/GJ Gas

$5.30/GJ

Range

Range

Geothermal
Hydro
CCGT at

Wind
Coal @
CCGT at
Gas

Range
Base Range $25/t Carbon $50/t Carbon

Source: Contact
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 Contact’s operations and projects – an overview

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How Geothermal Works

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 Typical Wellpad

Cross Country Line Separator Station

Flash Tank
Sump or Silencer Branch Line Wellheads

14
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Tauhara II Project
Overview

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TAUHARA II: The Project and the Resource

 The project comprises;

• 250 MW Power station
• Steamfield
• Transmission
connection
 Located on the Wairakei-
Tauhara Geothermal
System (magenta line)
 Consent application area
is shown by the lighter
blue line

© Contact Energy Limited

Proposed Development Layout

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Tauhara Geothermal Resource

• Tauhara field area

• Resource
– Size
– Sustainability
– Effects and adaptive management
• The Tauhara II project is sustainable – modelled out to 2060.

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Tauhara is a large geothermal field

• Tauhara - 50 km2
• Twice the area of Wairakei or
Rotokawa
– Wairakei 25 km2
– Rotokawa 20 km2

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Tauhara is a hot geothermal field

• Measured temperatures up to 300 OC

• Geochemical temperatures up to 320 OC

• 30OC hotter than previously measured (@ 270 OC)

• Resource Area >250 OC (-500 masl) is inferred to be three times larger

than at Wairakei or Rotokawa

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New Geological Information - Drilling

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 Underground Resource Production and discharge strategies

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Subsidence

• Intensive research project conducted over last four years

– Drilling, cores, physical testing, modelling
• Better understanding of subsidence mechanisms and how to avoid.
• The avoidance of subsidence effects is the primary requirement for
Contact in managing the Tauhara Geothermal Field.
• Extensive subsidence monitoring.
• Pressure monitoring in geothermal field.

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Subsidence Damage Remediation

The ambulance at the

bottom of the cliff is a
subsidence damage
remediation
requirement in
Contact’s consents – all
property damage within
defined subsidence
bowls is Contact’s
responsibility to fix.

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Questions?

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Extra slides if needed

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Well Drilling – covering much greater…

• Aerial Extent
• Depth

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 Shallow Materials Properties

• Extensive coring and materials

testing has been conducted over
the last three years

• Professor Mick Pender from

Auckland University constructed
specialist testing equipment

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Models Developed

• 3D Reservoir Simulation
– Wairakei model developed

• Subsidence Models
– 3D – coupled to reservoir simulator
– 1D – concept confirmation

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Sustainability of the resource

1. Multiple model scenarios have been run out to 2060

2. Long term sustained performance from the resource can be achieved
beyond 2060
3. Best achieved including development in South Tauhara

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Subsidence

1. Substantial increase in subsurface

data and knowledge; recovered and
tested ~ 4 km of core material and
measured pressures/temperatures
within and outside the subsidence
‘bowls’

2. Inside the Tauhara bowls, material

at various depths (up to 400m), is
anomalously compressible and of
sufficient thickness to explain the
location and amplitude of the
subsidence bowls

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Adaptive management

1. Adaptive approach enables sound management of effects

2. Requires flexibility to be effective

3. With Tauhara II, Contact will have infrastructure and fluids available to
implement adaptive management

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