NGĀTI TUWHARETOA GEOTHERMAL ASSETS LTD RESOURCE CONSENT APPLICATION AND ASSESSMENT OF ENVIRONMENTAL EFFECTS (AEE)

Transcription

1 NGĀTI TUWHARETOA GEOTHERMAL ASSETS LTD RESOURCE CONSENT APPLICATION AND ASSESSMENT OF ENVIRONMENTAL EFFECTS (AEE) August

2 Table of Contents 1 INTRODUCTION PURPOSE OF THIS DOCUMENT NGĀTI TUWHARETOA GEOTHERMAL ASSETS LIMITED (NTGA) OVERVIEW OF EXISTING DEVELOPMENT AT KAWERAU STEAMFIELD MANAGEMENT PLAN EXISTING CONSENTS APPLICATION OVERVIEW RESOURCE CONSENTS REQUIRED FOR PROPOSED RESOURCE BASED STEAM SUPPLY ACTIVITIES TECHNICAL ASSESSMENTS INTEGRATED AND ADAPTIVE MANAGEMENT APPROACH COMMERCIALLY SENSITIVE INFORMATION PROPOSED USE RESOURCE BASED ASSESSMENT OF ENVIRONMENTAL EFFECTS (AEE) OVERVIEW ASSESSMENTS GEOTHERMAL WELLS GEOLOGY ASSESSMENT GEOPHYSICS GEOCHEMISTRY GROUND WATER AND SURFACE FEATURES RESERVOIR Pressure and Temperature Permeability Well Interference Testing

3 3.8.4 Conceptual Model Resource Capacity Simulation SUBSIDENCE EFFECTS MODELLING INDUCED SEISMICITY AIR DISCHARGE LONG TERM SUSTAINABILITY CULTURAL IMPACTS POSITIVE BENEFITS FOR KAWERAU PLANNING ASSESSMENT RESOURCE MANAGEMENT FRAMEWORK NEED FOR RESOURCE CONSENTS MATTERS TO CONSIDER BAY OF PLENTY REGIONAL POLICY STATEMENT Land Geothermal Resources Physical Resources/Built Environment Air Discharge Water Resources Specific Geothermal Resource Section OPERATIVE TARAWERA RIVER PLAN BAY OF PLENTY REGIONAL AIR PLAN OPERATIVE REGIONAL WATER AND LAND PLAN (ORWLP) NOTIFICATION CONSIDERATION CONCLUSION DECISION SOUGHT

4 1 INTRODUCTION 1.1 PURPOSE OF THIS DOCUMENT The purpose of this document is to outline and provide sufficient information pertaining to the proposed Ngāti Tuwharetoa Geothermal Assets Limited (NTGA) resource consent application. NTGA has prepared its application and supporting documents to seek consent to undertake activities with the primary purpose to further expand the existing industrial geothermal steam supply within Kawerau. NTGA also proposes to utilise and support cascading and direct heat use developments of lower temperature applications. NTGA is an established direct heat and steam supplier for industrial applications within the Kawerau geothermal field. The objectives of this application are expected to provide higher efficiency of resource use, assist in achieving sustainable economic growth, employment and cultural wellbeing, and provide opportunities for all levels of geothermal development. This document compliments the number of technical reports required to demonstrate and assess the level of environmental effects. NTGA wish to apply for an additional geothermal take, use and discharge consent which will apply to existing and future production and reinjection wells located within the Kawerau geothermal field. This application is resource based therefore, will not include any additional consents that may be required to authorise the specific use type activities. 1.2 NGĀTI TUWHARETOA GEOTHERMAL ASSETS LIMITED (NTGA) NTGA is a wholly owned subsidiary of Ngāti Tuwharetoa (BOP) Settlement Trust, established on behalf of Ngāti Tuwharetoa ki Kawerau. 4

5 The Kawerau geothermal field holds high cultural significance to Ngāti Tuwharetoa (BOP) Settlement Trust and has been acknowledged through the Crown by way of Statutory Acknowledgement of the Kawerau geothermal field. At the time of Statutory Acknowledgement, NTGA via MRP obtained the majority of Crown owned Kawerau geothermal assets and existing steam supply contracts to the Industrial Mills were continued. The cultural connection to the resource and sustainable management approach is critical to meet Ngāti Tuwharetoa (BOP) Settlement Trust s ongoing expectations of NTGA future and existing operations. During these negotiations, two 45,000 tonne per day planned developments were proposed, inclusive of NTGA and Mighty River Power (MRP). A Memorandum of Understanding and Steamfield Management Agreement were entered into to establish an appropriate framework for MRP s 2005 consent application and NTGA s planned future 45,000 tonne per day consent application and subsequent development. The intention was to provide support to the two developments, whilst ensuring the facilitation of the sustainable use and management of the Kawerau geothermal field. Expanding on existing operations and heat utilisation practises by way of steam supply and direct heat applications aligns with NTGAs business objectives, whilst further enhancing opportunities for industrial practises within Kawerau. This proposed expansion will assist with managing current and increasing demands, and provide for future demands from Kawerau s existing industrial operators. NTGA anticipates the ability to meet these demands will secure and improve long term industrial operations within the Kawerau District, whilst maintaining and applying a sustainable management and development concept to natural resource utilisation. NTGA s primary role is to facilitate access and provide for the sustainable development of geothermal energy use. An on-flow of benefits to Ngāti Tuwharetoa (BOP) Settlement Trust beneficiaries is essential to NTGA, whilst regional, district and community benefits are clearly important and expected. Direct local benefits can be expected from expansion through increases in opportunities for employment, contracting and provision of local 5

6 services and provide significant economic, social, cultural and environmental benefits to Kawerau and the Eastern Bay of Plenty. 1.3 OVERVIEW OF EXISTING DEVELOPMENT AT KAWERAU Historically, a mill town to support Tasman pulp and paper processing plant was considered for development, because central North Island forests were ready for harvesting. The location of the town was required to be central to the forests, have a robust roading network, and direct proximity to the Port of Tauranga. Eventually the Kawerau location was selected because it had the additional benefit of its direct supply to natural resources, including that of renewable energy via geothermal steam. The drilling of geothermal production wells for Tasman led to the first geothermal steam being supplied for power production and process heat to the mill in The steam supply system became fully operational in As the timber processing plant expanded, demand for geothermal steam increased, with separated geothermal water used in two small binary power plants (total output of 6MWe). Today the current supply of geothermal energy via NTGA to Kawerau industry is considered to be one of the world s largest geothermal direct heat applications. Norske Skog (NST) is considered to be one of the world s largest suppliers of newsprint and, taking advantage of the strategic resources in Kawerau, is reported to be the only mill in the world using 100% geothermal steam to produce the lowest cost and profitable mill. Svenska Cellulosa Aktiebolaget (SCA) is worldly renowned for its sustainable practises as tissue producers and suppliers. By working with NTGA, SCA has replaced natural gas boilers with sustainable naturally produced geothermal steam in its Kawerau operation. NTGA has developed a purpose built geothermal clean steam plant, supplying directly to SCA, which has assisted in SCA significantly reducing their carbon emissions by 39 percent. 6

7 The Kawerau district currently incorporates a range of industrial practises that compliment and provide for each entity s operational needs. These industries include a number of wood processing operations, processing and treatment of wood products (Carter Holt Harvey (CHH) Tasman and CHH Wood Products), generation of newsprint (NST), tissue production (SCA), and electricity generation (MRP, Geothermal Developments Limited (GDL) and Bay of Plenty Energy). As the industrial sites have expanded, so has the demand for use and development of the Kawerau geothermal field. More than 50 wells have been drilled for various purposes including production, reinjection and monitoring. These wells have assisted in providing critical information needed to determine the development parameters of the geothermal field and continue to enhance the understanding of the field. This understanding, and in response to industry expansion aspirations, has led to NTGA s decision to commence expansion of the existing business by increasing resource allocation. This increase will assist in providing existing customers with opportunities for additional cost effective and efficient uses. The synergies and formed partnerships within the Kawerau community are a strong part of how and why Kawerau industrial sites continue to operate and produce world class products. Efficiency technology and use of renewable natural resources provide environmental, economic, social and cultural benefits to the region and NZ as a whole. Current direct use of steam for drying of paper and wood products is identified as a cost effective, energy efficient measure, which in turn offsets electricity demands and reduces carbon emissions. With NTGA s proposed increase in steam supply, upgrading and modifications to existing infrastructure will be required. There is an increasing movement by industry to explore alternative options to ensure economic viability can be met with New Zealand s ongoing increases in energy requirements, and the implications of higher costs and lower carbon footprints. Should this proposal be approved, it is expected to provide efficiencies in electricity consumption by Kawerau industrial operators, which in turn would allow availability of existing electricity supply to the wider community and national grid. 7

8 1.4 STEAMFIELD MANAGEMENT PLAN Ngāti Tuwharetoa Geothermal Assets, Norske Skog Tasman and Mighty River Power are party to a Geothermal Steamfield Management Agreement which provides for the general principles and plan compliance processes, to ensure the ongoing sustainable management and integrated development of the Kawerau geothermal resource. As a result of this agreement, the parties have developed a Steamfield Management Plan (The Plan). The Plan: outlines the philosophies of sustainable management; establishes a minimum criterion that any geothermal development at Kawerau should satisfy in order to achieve compliance with the plan; provides direction on achieving integrated management of the Kawerau geothermal resource when considering a new development and when seeking resource consents for that development; and outlines existing, planned and potential field developments over a 10 year horizon. The Plan is designed to focus on reservoir issues rather than the wider environmental issues and therefore is separate from what otherwise may be contemplated by way of a condition of any consent. The objectives for the management of the Kawerau geothermal resource as described in this plan are to: Optimise the long-term energy potential of the geothermal reservoir; Provide for multiple operators on the field by identifying acceptable impacts of new development on existing developments; Minimise adverse environmental impacts associated with geothermal extraction and reinjection; Increase the understanding of the Kawerau geothermal system; 8

9 Maintain co-operation and knowledge-sharing between the different field developers and well owners; and Ensure coordinated development of the field. NTGA consider this application and staged development proposal is consistent with the guiding principals of the Steamfield Management Plan. A letter of support with recommended conditions has been provided and is considered to achieve the objectives outlined within the Steamfield Management Plan. 1.5 EXISTING CONSENTS NTGA currently holds the following consents: Take up to 44,500 tonnes per day of geothermal fluid for production and discharge geothermal via reinjection and ground soakage Discharge geothermal vapour to air Discharge geothermal water to the Tarawera River Exploratory drilling land use consent within the Kawerau geothermal field Bore permit to drill up to 3 production wells Take water for drilling purposes and discharge drilling fluids including stormwater disposal. The primary take, use and discharge of geothermal water and vapour are consented under 24598, and 30126, which authorise the commercial utilisation of the resource. These consents are currently utilised and maximised to full capacity. Due to further steam supply demands there is a need to apply for an additional abstraction and reinjection consent to support the existing and future growth in local development. Indicative contracts for additional supply with existing customers are currently pending the success of this application. The most recent NTGA consent 66144, relates to the investigation and drilling of future wells to improve and expand current geothermal operations. It is considered as each expansion occurs, technology improves to provide for better efficiency of use of the water. The intermittent water take consent coincides with the 9

10 drilling operations therefore, is to supplement and enable the continuation of maintaining and exploration. 10

11 2 APPLICATION 2.1 OVERVIEW NTGA wishes to expand its existing operations to increase the supply of geothermal resource to meet current and future demands. The application seeks a term of thirty-five years to ensure that NTGA and existing industrial operators can capitalise and recover from investments in expansions and advancements in operations and infrastructure with the long-term certainty of supply. It is considered efficient use of consenting time to ensure that this application incorporates the needs for the company s vision within the next two-five years. The application proposes to follow on from the existing consent , which authorises a take, use and discharge of geothermal fluid. This consent is currently fully utilised and therefore, with industry demands to utilise additional resource, NTGA seek to consent additional take, use and discharge of the geothermal resource. Sustainable geothermal development and operation of the Kawerau geothermal field requires extensive investigation and investment prior to determining exact locations for well pads. Considerable expense and time is required to conclude required drilling. NTGA considers it essential to firstly ensure that existing users and operators are protected, and further, to ensure that with future allocation, the take, use and discharge is sustainable with minor environmental effects. It is considered the NTGA assessments are consistent with this approach and future allocation is available without causing detrimental effects NTGA seeks approval to take a further 45,000 tonnes per day of geothermal fluid and to discharge geothermal brine and condensate by way of reinjection. NTGA also proposes to take further precautionary measures, by making incremental increases in abstraction with ongoing monitoring to ensure that an adaptive management approach can take place, should unforeseen effects be identified. This approach is 11

12 considered consistent with the Steamfield Management Plan, Ngati Tuwharetoa (BOP) Settlement Trust and NTGA s values and approach to future development of the Kawerau geothermal field. 2.2 RESOURCE CONSENTS REQUIRED FOR PROPOSED RESOURCE BASED STEAM SUPPLY ACTIVITIES Geothermal take, use and discharge permits are required under the Resource Management Act (RMA) for the proposed expansion to existing steam supply operations. In general terms the consents required are: Water permits to authorise: Take and use of geothermal fluid and energy for direct heat utilisation and other downstream uses; and Discharge permits to authorise: Discharge of geothermal water and energy to ground via reinjection; Discharge of steam line condensate and geothermal residues onto or into land associated with operational, construction and maintenance activities; Discharge of abatement chemicals into the ground via wells; Bay of Plenty Regional Council base and application forms are provided in the Appendices of this report. The consents sought from Bay of Plenty Regional Council are proposed for a term of 35 years. Additional consents for any plant infrastructure may be required from Whakatane and Kawerau District Councils however; these would be applied for separately by industry once detailed assessments of preferred technology and plant design has been completed. 12

13 Easements for pipelines and services to expected well site locations are currently being worked through with land owners and are envisaged to be sought from the respective District Councils. It is considered appropriate that the overarching resource allocation based consent be obtained initially, and then as each phase of consultation and approvals for land access is completed, relevant easement consent authorisation be sought. 2.3 TECHNICAL ASSESSMENTS NTGA has proposed a scope to authorise an additional geothermal fluid take of 45,000 tonnes per day. In accordance with an agreed project plan, NTGA has commissioned and reviewed various independent geo-science assessments to demonstrate the proposed take, use and discharge is consistent with sustainable development of the Kawerau geothermal resource. These assessments reflect the views of the authors who are considered to be technical experts in their fields and are independent to that of NTGA. The intended use of the geothermal resource is to provide additional steam and energy to existing and future industrial infrastructure, and to provide direct heat use for cascading applications. Therefore, this assessment is resource based and will not cover any subsequent activities surrounding the actual use including discharge to air, land use, and land access normally covered as part of a suite of assessments necessary to support a site specific geothermal development. This will as a result be progressed by each operator and parties contracted to receive supply from NTGA. The technical reports and assessments undertaken for this application include; A technical overview report Geological review Reservoir assessments Geophysics assessment Geochemistry assessment Conceptual model and reservoir simulations 13

14 Subsidence simulations Induced Seismicity assessment Thermal Surface Features and Groundwater assessments Geothermal vegetation review Cultural Impacts These assessments are underpinned by the following objectives to: ensure alignment with the principles of the Steamfield Management Plan and Agreement. ensure the take and discharge is undertaken in accordance with sustainable management practices and with appropriate regard to: Tikanga and Matauranga Maori Sustainable development Protection of existing users Protection of surface features ensure that this proposed reservoir development is supported through robust and defensible geo-science, exploration drilling information and geological reservoir modelling. demonstrate that any potential reservoir effects associated with a new take of 45,000 t/d are understood and can be appropriately avoided, remedied or mitigated. 2.4 INTEGRATED AND ADAPTIVE MANAGEMENT APPROACH NTGA propose to continue to undertake activities within the Kawerau geothermal field through an integrated management approach. It is expected that should this consent application be authorised, conditions imposed will align with those held by existing consent holders, recommendations provided by the technical assessments and the principles of the Steamfield Management Agreement. 14

15 NTGA already manage and monitor beyond their consent requirements, with the expectation that additional information can enhance the overall understanding of the field, therefore assisting in the collective management of the field. Information sharing between users is considered by NTGA to be a critical component to ensure parties are able to better manage the resource as a whole, and in turn provide the ability to adaptively manage the field sustainably. NTGA acknowledges that geothermal developments in general hold a level of uncertainty and risk, due to the way in which information is gained and the exploratory component that is associated with geothermal fields. The Kawerau geothermal field has 50 years more information than that of greenfields however, is still bound to a level of exploratory and adaptive management. An adaptive management approach is provided for under Section 30 (1) of the RMA for the establishment, implementation and review of objectives, policies and methods to achieve integrated management of the natural and physical resources. NTGA propose to utilise this adaptive management approach as NTGA considers this approach best provides opportunity for data to be collected utilising updated available information and predictive tools (including further refinement of reservoir simulations) along with monitored results. This will provide opportunity to make comparisons to the desirable outcomes and predicted effects and adaptively manage as necessary. Successful adaption requires flexibility and the availability of options. This adaptive approach proposes to be undertaken under the review of Council who utilise independent peer review panels to provide advice and direction. NTGA considers adaptive management provides the opportunity to continue to determine the sustainability of the Kawerau resource and address potential current limitations within the Council s approved Kawerau geothermal field model. Within the appended reservoir simulation technical reports and the proposed usage table, NTGA demonstrates the incremental usage and proposed staging which will require an adaptive management approach. 15

16 Establishing changes which occur naturally, to that of abstraction based effects, is significantly complex and it is further accepted that no model or interpretation can avoid a level of uncertainty. It is therefore considered important to adaptively manage refinement and collection of information, which will over time provide increased certainty and direction surrounding the sustainable management of the geothermal resource. NTGA foresee that continuous monitoring is critical and that an adaptive management approach must be undertaken at all times. Through incremental increases in abstraction, NTGA propose this precautionary approach will ensure the resource is managed sustainably and will provide a level of certainty to the protection of the Kawerau geothermal field and invested infrastructure from adverse effects. 2.5 COMMERCIALLY SENSITIVE INFORMATION Commercially sensitive information has been supplied within this application for assessment purposes only therefore, it is requested that certain parts of the technical assessments supplied remain confidential. Each AEE technical report considered as commercially sensitive have been individually marked within the AEE table. It is expected that specific written approvals relating to drilling sites would be obtained through requirements set out in the current drilling consent. The proposed area of abstraction and reinjection will be within the Kawerau geothermal field and is shown in the attached site plan however, specific modelled locations are considered commercially sensitive and are requested to be protected under Section 42 of the Resource Management Act (RMA)

17 2.6 PROPOSED USE NTGA propose to adaptively manage the utilisation and abstraction operations of geothermal fluids from the field through staged direct heat use supply contracts. Kawerau currently dominates the world with the highest geothermal industrial heat use and over 50 percent of all operations. With the proposed consent, NTGA anticipates efficient use and further opportunities to reduce carbon emissions providing cleaner, greener energy options to existing and future industry of Kawerau. Through better use of the geothermal resource, NTGA foresee further advances in renewable energy technology. Provisional supply contracts for direct industrial heat use are dependant on gaining the proposed resource based consent. NTGA are able to demonstrate the ability to utilise the total amount of the proposed allocation however, seek commercially sensitive protection of this. This is therefore, not provided within the application but appended as a separate document demonstrating the proposed allocation and use. Additional geothermal well drilling is time involved and subject to securing final contracts, which are pending resource consent. 17

18 3 RESOURCE BASED ASSESSMENT OF ENVIRONMENTAL EFFECTS (AEE) 3.1 OVERVIEW This Assessment of Environmental Effects (AEE) has been prepared to meet the requirements of Section 88 and the Fourth Schedule of the Resource Management Act (RMA). In relation to the take, use and discharge of geothermal fluids, the Bay of Plenty Regional Water and Land Plan also has specific requirements which must be met. These requirements and those relating to the other relevant regional plans are set out in Section 4 of this application. The remaining sections of the application will therefore, outline the assessment of effects and relevant planning assessment requirements. 3.2 ASSESSMENTS NTGA has commissioned and reviewed various independent geo-science and technical assessments to demonstrate the proposed take, use and discharge is consistent with sustainable development of the Kawerau geothermal resource. These assessments reflect the views of the authors who are technical experts in their fields, and are considered independent of NTGA. This application is to authorise a resource based allocation of geothermal fluid, therefore the assessments do not address any site specific industrial use issues, inclusive of any discharge to air, land use consent, and access to land normally covered as part of the suite of assessments necessary to support a geothermal development. As a result, these types of assessments will be carried out by each industrial operator on a case by case basis. 18

19 The key areas for discussion include; Reservoir Modelling Subsidence Geological review Induced seismicity Groundwater and thermal surface features Interactions within the model which relate to well interference and reinjection depths, and Cultural values. A series of technical investigations have been undertaken as part of the environmental assessment process. The outcomes have been utilised in preparation of this AEE document. The technical reports presented in the appended files as listed below: AEE1 Grant Kawerau geothermal field and reservoir; 14 April 2011 AEE2 Bignall Kawerau geothermal field: Geological assessment; 15 April 2011 AEE3 Powell Assessment of the fluid chemistry of the Kawerau Field; 6 April 2011 AEE4 Cumming Kawerau conceptual model from MT for injection targeting; 3 Dec 2009 Kawerau geothermal field: geothermal surface features; 15 April 2011 AEE5 Reeves and shallow groundwater assessment AEE6 Sherburn Kawerau geothermal field: potential for induced seismicity; June 2010 Analysis of surface deformations induced by geothermal AEE7 Terralog operations at the Kawerau field; 6 July 2010 AEE8 Holt Numerical model of the Kawerau geothermal reservoir; 18 June 2007 AEE9 Holt Kawerau numerical model update; 2009 AEE10 Holt Kawerau numerical model scenarios - Headroom + 45 T/day; 22-Mar 201 AEE11 Holt Kawerau numerical model scenarios - Stress test scenarios; 22 Mar 2011 AEE12 Grant Review of Kawerau reservoir simulation models; 12 Aug 2009 AEE13 Grant Kawerau reserves for NTGA expansion; 1 Apr 2011 AEE14 Grant Kawerau reservoir pressure and temperature 2011; 27 June 2011 AEE15 Grant Two-phase conditions at Kawerau; 1-Apr 2011 AEE16 MRP Kawerau A0 MASTER 2011 w MT_V2; 24-Mar 2011 Proposed Production and Injection Geothermal Fluid Take Scenario; AEE17 MRP 11-Mar

20 AEE18 Terralog Kawerau Subsidence Model; 18 April 2011 AEE19 Powell Powell reply to Maunder queries; 27 May 2011 AEE20 MRP Top of Greywacke; 9 May 2011 AEE21 MRP Section C figure; 9 May 2011 AEE22 MRP Section location map-06; 9 May 2011 AEE23 MRP Summary Well Data; 12 May 2011 AEE24 MRP Huka type Sed Thickness-02; 31 May 2011 AEE25 Grant Effect of Enthalpy Changes on Kawerau Well Performance; 1 June 2011 AEE26 Holt Kawerau numerical model scenarios headroom +45t/day Supplemental report #1 surface flows; 7 June 2011 AEE27 Holt Kawerau numerical model scenarios headroom +45t/day supplementary report #1, model output; 27 June 2011 AEE28 Holt Kawerau Model 2009; 7 June 2011 AEE29 Pezaro MRP Response to Maunder 19 May Question 2; 15 June 2011 AEE30 Grant Kawerau Model Review; July 2011 Numerical model of the Kawerau geothermal field, NZ AEE31 Holt 2009 model supplemental report #1 Huka caprock; 30 June 2011 AEE32 Bignall GNS Response to Maunder Queries; July 2011 AEE33 NTST Cultural Impact Assessment; June 2011 AEE34 MRP Kawerau AO Master 2011; 11 March 2011 AEE35 NTGA Proposed Usage Table; August 2011 AEE36 NTGA Consultation documents; August 2011 AEE37 Holt Kawerau numerical model scenarios- headroom +45t/day supplementa report #3, Bottom Recharge; July 2011 Memorandums and further updates to some reports are to provide clearer and concise information surrounding results. The technical reports are considered to incorporate the most available and accurate reflection of the Kawerau geothermal field at the point of production. Ongoing monitoring occurs and therefore, additional information continues to advance the knowledge and understanding of the field over time. The proposed activities will be carried out on assorted land lots located throughout the Kawerau geothermal field. 20

21 3.3 GEOTHERMAL WELLS Within the Kawerau geothermal field there are existing wells which may be suitable for supply to further development. With the further allocation sought under this application, there will be a need for additional production and injection wells and NTGA considers it preferable to utilize existing wells in the first instance. Although this application does not involve the activities to drill, it is considered appropriate to acknowledge the need for additional wells and the proposed use of the current drilling consent 66144, authorized for these purposes. Ongoing exploration continues to refine knowledge of the geothermal field and identify suitable locations within the modeled areas for the purpose of this application. Modelling assumptions regarding location of production and injection targets are based on the conceptual model of the Kawerau reservoir and best practice development principles without regard to land access. Therefore, there needs to be a level of flexibility within the application to provide for a number of feasible sites. The consent area proposed for production and reinjection has been developed over time, with extensive refinement of information through exploratory investigation. Defined production and reinjection well areas may vary depending on further geo science results. However, it is expected that production and reinjection confirmed through further refining of information and recent modelling, has assisted in updating and determining general locations of proposed future wells. Extensive investment in research and time has been undertaken to determine whether a drilling location is sufficient for its purpose. These results have been utilised to determine future sites. It is proposed that an overall site plan, showing a broader area of projected drill sites, be accepted in a form showing target zones. These zones, whilst providing full effect to the model interpretations, ensure minimisation of potential environmental and cultural effects. Site plan AEE17 has been included in this document for reference to areas of discussion however; the exact locations are restricted to inclusion in the modelling report for consent authority purposes only and considered commercially sensitive. 21

22 Figure 1 Proposed production and injection zones 22

23 3.4 GEOLOGY ASSESSMENT An independent geological review of the Kawerau geothermal field (AEE2) was undertaken by the Institute of Geological and Nuclear Sciences Limited (GNS) defining the regional geological setting. This detailed the local stratigraphy and structural features across the main borefield area, based on up to date drill hole data, supported by resistivity and gravity survey data. These key geological components control permeability and fluid flow across the geothermal reservoir and are evidenced by a variety of hydrothermal mineral alteration signatures at differing horizons within the field. An updated geological model of the Kawerau geothermal field and a review of the potential geological hazards were completed as part of the assessment of effects for the proposed additional 45,000 t/d geothermal fluid take, use and discharge. The review was completed to ensure inclusion of updated geological information from recently drilled wells. This is important to ensure that sufficient data is available for input to the reservoir and subsidence modelling. An overview of the information is outlined below. In addition, the Geological Technical report and Geothermal Field and Reservoir Report are appended as AEE2 and AEE1 respectively for further reference. Reservoir rocks in the Kawerau geothermal system comprise of locally derived volcanic lavas (e.g. Kawerau Andesite, Caxton and Onepu Rhyolites), and distallysourced silicic pyroclastic rocks (e.g. Matahina and Kidnappers Ignimbrites), which uncomfortably overlie greywacke basement (at m drilled depth). Lacustrine sediments and welded intervals within some ignimbrite units act as aquicludes and separate the volcanics into discrete aquifers. The conceptual model points to deep-sourced reservoir fluid moving upwards, via widely spaced, steeply dipping, NE-trending normal faults (and cross-cutting NWtrending faults) and/or fractures of high local permeability, within otherwise relatively impermeable rock. These provide drilling targets within otherwise impermeable ignimbrite, andesite and basement greywacke. 23

24 Faults and fractures in the basement greywacke pass into overlying units, allowing hot water upwelling in the greywacke to spread laterally into permeable zones along sub-horizontal volcanic and sedimentary layers. Intra-formation sediments, welded ignimbrite and hydrothermal eruption breccias are important aquicludes that separate near-surface aquifers from deeper reservoir fluids. A subsurface outflow is inferred to extend greater than 3 km north of the resistivity boundary, with thermal fluids mixing with groundwater in the Tarawera-Rangitaiki flood plain. Progressive dilution and cooling occurs with water flow to the north. The highest measured well temperatures occur toward the southern part of the geothermal field. The Kawerau geothermal field lacks extensive intra-formational aquifers and drillhole production therefore, relies on intersecting permeable faults and/or fractures in impermeable ignimbrite, rhyolite, andesite and greywacke basement. The data included within the geological assessment provides critical up to date information to be inputted into the reservoir and subsidence models. The data includes the most recent drilling results. As more wells are drilled the knowledge of the Kawerau geothermal field increases, providing future refinement and certainty to the simulated outputs and adaptive management approach currently undertaken. 3.5 GEOPHYSICS A number of assessments have been completed to identify the geophysical extent of the Kawerau geothermal field. A summary of the assessments has been provided within AEE1. Drilling, Magnetotelluric and resistivity surveys have attempted to determine the extent of the field however, due to gaps in coverage and electrical noise created by the areas occupied by houses, mills, power plants and highways it has created difficulties. The conceptual area incorporates four zones corresponding to high permeable, low permeable, transitional and deep zones. Like most geothermal fields, Kawerau s 24

25 low resistivity corresponds to the low permeable hydrothermal clay alteration cap that forms over and adjacent to the higher temperature and more permeable reservoir rock. A geophysical field outline associated with an abrupt thinning of the low resistivity clay cap has been diagnostic of proximity to the very permeable main Kawerau reservoir. It is proposed further monitoring and drilling will take place providing further valuable information which overtime will enhance the overall understanding of the field. 3.6 GEOCHEMISTRY An independent geochemistry assessment was completed as part of the suite of technical assessments required for the application and is appended as AEE3. The geochemistry assessment addresses three critical aspects of the Kawerau geothermal field: Initial state chemistry of the geothermal systems, as best as can be determined from available data; The geochemical response of the field from production through to the present date; and The assessments of environmental effects relating to the proposed additional 45,000 tonne/day resource take. NTGA consider it necessary to ensure that up to date information is available and that an overall understanding of the field can be gained for the consent authority technical reviewers. This is consistent with NTGA s expectations to ensure that the Kawerau geothermal field can be assessed through an integrated approach. The Kawerau resource is a liquid-dominated alkali-chloride hydrothermal system. The system produces deep thermal up-flow in the greywacke basement to the south with an outflow to the north and west. On the western margin of the field, chloridebearing hot springs emerge to the surface as thermal areas. At initial conditions, the reservoir was liquid-filled and relatively high in gas. Boiling conditions were evident at least at the top of the reservoir, based upon hot spring chemistry. 25

26 Early shallow production wells in the north-west part of the field experienced a brief period of two-phase conditions, but were later quenched by dilute edge and surface waters. Deeper production in the north-west experienced a long term dilution trend and often relatively stable production temperature. Following start up of the Kawerau Geothermal Limited (KGL) project in 2008, geochemical trends in some of the wells changed and suggested a component of returned injectate. Monitoring via tracer testing continues to take place to better understand and manage the complexities that surround the inflows and outflows of the system. The two key geochemical impacts identified in relation to the proposed application are: Increased injectate return to production wells An acceleration of edge water influx; stronger in the north-western part of the reservoir and volcanics. The former is an expected consequence of added development and can be managed by prudent and proactive injection management. The latter is a consequence of an additional 25% loss from the system, which will increase reservoir pressure drawdown and promote more recharge, some of which will be shallow and relatively cool and is expected to shorten the productive lives of the relatively shallow north-western wells. It is considered that the additional loss will have minor impact on the resource and that some shallow injection may be beneficial in combination with deep reservoir pressure support by deep injection. There is a level of adaptive management required to minimise potential effects and NTGA consider that incremental increases in abstraction, and continuous monitoring, will provide a further level of certainty. 26

27 3.7 GROUND WATER AND SURFACE FEATURES An assessment was conducted independently by GNS to determine potential effects on groundwater and surface thermal features. The assessment has defined the nature and extent of the shallow groundwater system and surface thermal features, and has been based on publicly available reports, field monitoring and updated drillhole data. There are at least two shallow aquifer systems identified in the region; 0-70m deep and m deep. Historic water levels from monitoring wells vary annually (0.5m to 1.5m) and do not show long-term changes in the Kawerau area. Water quality in the near surface aquifer contains water mixed with injected fluids which is characterised by high electrical conductivities, iron and boron concentrations, each of which occurs naturally. The surface thermal features within the geothermal field are generally small and non-vigorous. While influenced by land development activities in places, historically there has been an overall natural decrease in surface thermal activity since the beginning of last century. The extraction of deep geothermal fluid is unlikely to greatly affect water levels, alter current fluid chemistry in the shallow aquifer or create any significant changes in thermal activity of surface features. This is due to the relative isolation of the shallow and deep geothermal systems via impermeable geological aquitards and fault structures. For similar reasons the process of deep injection and location of peripheral wells is considered unlikely to affect the surface or near surface environment. The additional fluid take and deep injection proposes to reduce the recent monitored increase in the shallow injection load. This is unlikely to exacerbate the existing mixing of geothermal water into the shallow groundwater and is not expected to affect the current state of the thermal surface features. There is expected to be minor long-term effects due to deep production and deep injection relating to the proposed activities. Within technical assessment AEE5 it is acknowledged that accurate prediction and assessment of future changes in surface thermal activity of the Kawerau field is difficult. It is reasonably foreseeable that some changes will 27

28 occur, but likely to be difficult to distinguish between changes which are a consequence of the production and injection regime, and those that would have occurred in their absence. It is likely that any overall natural decline will continue in the future and based on previous studies there appears to be a very low chance of hydrothermal eruption as a consequence of the proposed development. Appropriate monitoring is considered necessary for any future development, in order to better understand the natural variations in shallow water levels, water quality and surface thermal features. This is an important part of NTGA s current and proposed future operations. Due to the surface features also holding cultural connection to NTST, it is further necessary to safeguard the sustainability and the use of geothermal fluid. NTGA propose to advance the existing monitoring programme to include aspects of the assessments which require further investigation. 3.8 RESERVOIR Pressure and Temperature NTGA has commissioned a technical assessment to provide a summary interpretation of the behaviour and history of each well and interpretations of current reservoir temperatures, inclusive of comments relating to temperature changes with time and pressure history. The following is a summary of the information presented within technical report AEE 14. Kawerau geothermal field has been exploited since the early 1950s. The effect of this exploitation is a reported pressure drop of 1-3 bar, prior to the start-up of the KGL power plant, showing some cooling of production zones. There was initial excess enthalpy within the 1950s well field, producing from m. Rapid cooling resulted in wells becoming unproductive over time. Deeper wells began to be drilled after 1960, these are recorded to have suffered from 28

29 slower cooling, and peripheral western wells tended to show a level of general cooling. The present isotherms are close to the original state and clearly show the pattern of the natural flow. Up-flow originates in the south and shows some level of minor boiling and degassing of water as it flows north. Maximum temperatures in this up-flow are at or near boiling point. This pattern of flow is shown by isotherms clearly showing maximum temperatures in the south. Significant sustained excess enthalpy on discharge has only been identified in shallow 1950s wells. Wells drilled after 1960 and some of the later KGL wells produced with a level of excess enthalpy initially, but this excess disappeared with time. Scaling is a problem in most Kawerau wells and anti-scalant is commonly injected through tubing to below the flashpoint in the well. To avoid flashing and consequent deposition of calcite in the formation, well flow must be limited to keep the flashpoint in the wellbore. The drawdown is dependant on local temperature, pressure and gas content, requiring flowing surveys of each well. As the remaining response to exploitation there is drawing in of cooler water, with any boiling region quickly quenched and for most purposes the reservoir can now be considered as liquid. At this point in time there is no conclusive evidence in the downhole logs to suggest such inversions were present before exploitation, or have developed as a result. It is considered this information is an integral part in beginning to decipher the intricacies of the Kawerau field and how the temperature and pressure information is interlinked to the reservoir model simulations Permeability Permeability investigations are ongoing within the Kawerau geothermal field and surrounding area and are generally found below 500m in the volcanics. An overview of the permeability is incorporated within the AEE reservoir reports and reservoir model simulations. This has allowed for updating and additional 29

30 information to better understand the Kawerau geothermal system and its parameters Well Interference Testing Additional reservoir modeling work was completed to ensure that potential well interference effects were assessed. Further calibration of the model was undertaken for specific areas of interest and tracer testing results were included to establish whether any wells could be potentially affected by the proposed increase in allocation. Results from previous and recent interference tests show extensive and high permeability connecting all NTGA and KGL production wells to form a single, well connected reservoir. The shallow monitoring wells show mutual interference with no response to deeper wells. Below 500m, interference results clearly delineate a reservoir extending through volcanics and into the greywacke. These wells communicate well and an aquiclude or layer of lower permeability separates the reservoir from the shallower fluids above. Modeling concludes that any potential changes in well performance may not directly be connected to the proposed take and discharge activities and that, although this suggests a level of uncertainty, ongoing monitoring and adaptive management of the field will assist in providing clarification of this. Ongoing monitoring will be undertaken upon commissioning of future wells. The nature of this initial investigation is to establish any potential interference effects on other users of the field prior to increasing production or reinjection. Further testing on commissioning is an imperative component of establishing wells for long term use. NTGA consider that an integrated management approach is essential and that the Kawerau field should continue to be adaptively managed to ensure that no more than minor effects are directly caused to any existing well Conceptual Model A conceptual model has been developed to demonstrate the reservoirs natural state and response to development. This has been described within a number of the appended AEE technical reports including the overview report AEE1 encompassing 30

31 the Kawerau geothermal field and reservoir. The key elements of the conceptual model are identified including the relatively little drawdown in response to existing exploitation, thus spread uniformly across the reservoir. This confirms the high permeability and small drawdown which in-turn indicates rates of high recharge. The model demonstrates deep injection as a mitigation measure, providing sites can be found on the periphery of the field that do not cause rapid returns. This policy is expected to both maximise field life by reducing cool inflows, and also minimise effects near surface, by reducing the drainage of fluid from surface. NTGA intend to manage and mitigate any potential effects caused by the proposed development. An incremental approach to the increase in deep production and injection is proposed through further investigations and adaptive management. It is expected that some shallow injection will be required to assist in maintaining the natural balance within the field. The reservoir simulation section of this report, demonstrates the proposed staged increase in production and reinjection which will minimise the aforementioned potential effects Resource Capacity An assessment to better determine the resource capacity has been completed within the suite of AEE technical reports. The results are considered indicative due to there being a number of areas with little or no drilling investigation completed at this point in time. Well sites are proposed in some of these areas to further understand the resource capacity of the field therefore; it is considered that the proven science does not necessarily provide a full reflection of the overall capacity. The undrilled areas will further increase the knowledge of the field and are expected to provide future opportunities surrounding determination of further resource capacity. It is considered fundamental to NTGA that the sustainability of the field is protected into the future therefore, investigation and monitoring remains a priority. 31