MightyRiverPower baulks at Long Gully wind farm

Wednesday 9th June 2010

Pioneer local wind turbine manufacturer Windflow Technology is considering a capital-raising to build the 12.5 Megawatt Long Gully windfarm behind Wellington after its 20% shareholder, MightyRiverPower, pulled out of the construction deal.

The MRP decision is the latest setback for NZAX-listed Windflow, which only recently settled long-running payment and technical specification disputes with its only customer for its two-bladed Windflow 500 turbines, New Zealand Windfarms.

Windflow still hopes to negotiate an energy off-take agreement with MRP if it can find funds of its own to build Long Gully, which is the only live option for new Windflow turbines after all plant for New Zealand Windfarms's Te Rere Hau development runs out at the end of this year.

"The agreement between Windflow and MRP was conditional on a resource consent acceptable to MRP being obtained," Windflow chief executive Geoff Henderson said in a statement. A consent had now been granted, following settlement of two appeals.

"After careful consideration of the resource consent which WTL obtained, and other factors, MRP has decided that it will not itself proceed to the construction stage of the project.

"Windflow and MRP are currently exploring alternatives, including power offtake arrangements. WTL is committed to the building of distributed wind generation projects like Long Gully throughout New Zealand and internationally and is hopeful that an agreement acceptable to both parties can be reached," Henderson said.

"We will focus our efforts on reaching an acceptable agreement with MRP that enables us to attempt to raise capital so that the Long Gully project can proceed.”

Windflow shares have not traded so far today, and have halved in value to 90 cents each over the last year.

Businesswire.co.nz

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