Final Report and Decision of the Board of Inquiry into the Tauhara II Geothermal Development Project

Transcription

1 Final Report and Decision of the Board of Inquiry into the Tauhara II Geothermal Development Project Final report and decision produced under section 149R of the Resource Management Act 1991 Volume 1 of 2

2 Prepared in December 2010 By the Board of Inquiry into the Tauhara II Geothermal Development Project ii

3 BOARD OF INQUIRY TAUHARA II GEOTHERMAL DEVELOPMENT PROJECT In the Matter of the Resource Management Act 1991 And In the Matter of a referral to a Board of Inquiry under section 147 of the Act of an application for resource consents by Contact Energy Limited for the Tauhara II Geothermal Development Project THE BOARD OF INQUIRY Judge R Gordon Whiting (Chairperson) Dr Patrick Browne (Member) Mrs S Glenice Paine (Member) Mrs Jenni Vernon (Member) Mr Brian White (Member) HEARINGS at Taupo on the 13 th, 14 th, 20 th and 21 st of September and the 5 th and 6 th of October 2010 APPEARANCES T Robinson, K Smith and T Ryan Counsel for Contact Energy Limited S Hickman Counsel for Taupo District Council K Feint Counsel for Ngā Hapū o Tauhara R Feary Counsel for Energy Efficiency and Conservation Authority H Te Nahu and E Rongo Counsel for Harvey Karaitiana, Moyra Bramley, Natalie Healey, Joseph Karaitiana, Christine Karaitiana-Kidwell, Nigel Baker, Arapiu (Abe) Seymour S Ongley Counsel for the Department of Conservation R Devine Counsel for Opepe Farm Trust J Campbell Counsel for Mighty River Power Limited and Rotokawa Joint Venture C Whata and J Kirby-Brown Counsel for Wairakei Hapū Collective and Tauhara Moana Trust M Brockelsby for Waikato Regional Council FINAL REPORT AND DECISION OF THE BOARD OF INQUIRY This final report is made under section 149R of the Resource Management Act 1991 iii

4 A. The application for resource consents under the jurisdiction of the Taupo District Council is granted generally in accordance with the application documents, subject to the terms and conditions of consent contained in Volume 2 of this decision. B. The application for resource consents under the jurisdiction of the Waikato Regional Council is granted generally in accordance with the application documents, subject to the terms and conditions (including General Conditions) contained in Volume 2 of this decision. C. The application to change the General Conditions is granted as per the terms and conditions contained in Volume 2 of this decision. D. The application to change the consent conditions of Waikato Regional Council Consent is granted by the insertion of the following additional condition: Water taken from the Waikato River pursuant to this consent may only be used for purposes associated with Tauhara I and Tauhara II Geothermal Development Projects. Those Projects include the Tauhara I Binary Plant on Centennial Drive, the Tauhara II Power Station north of Mount Tauhara and existing and future direct heat supply utilising resource consents held by the consent holder. iv

5 Contents VOLUME 1 INTRODUCTION... 1 REFERRAL BY MINISTER TO BOARD OF INQUIRY AND COMMENTS ON THE DRAFT REPORT... 4 BACKGROUND... 7 Geology... 7 Sources of High Enthalpy Fluid... 8 Surface Features... 9 Renewability of the Resource... 9 System Development Potential Adverse Effects of Development THE PROPOSAL The Overall Project Power Station, Switchyard and Transmission Line Steamfield Infrastructure Power Station Technology Proposed Conditions of Consent CONSENTS APPLIED FOR Taupo District Council Landuse Consents Waikato Regional Council Regional Consents Activity Status STATUTORY REPORTS Section 149G Reports Section 42A Report SUBMISSIONS FACILITATED PRE-HEARING MEETINGS THE HEARING AT TAUPO STATUTORY BASIS FOR DECISION PRINCIPAL ISSUES IN CONTENTION THE PERMITTED BASELINE AND THE EXISTING ENVIRONMENT The Permitted Baseline v

6 The Existing Environment EFFECTS OF THE TAUHARA II PROPOSAL ON THE ENVIRONMENT Approvals Gained Positive Effects Potential Adverse Effects Maori Matters Effects on Sustainability of the Geothermal Resource Efficient Use of the Resource Effects on Other Users of the Geothermal Resource Effects on Users of Neighbouring Assets and Infrastructure Effects of Subsidence Effects on Groundwater Amenity Effects CONSIDERATION OF STATUTORY INSTRUMENTS Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act National Policy Statement on Electricity Transmission National Environmental Standards for Electricity Transmission Regional Planning Instruments Proposed Waikato Regional Policy Statement Taupo District Plan Overall Conclusion on the Relevant Planning Instruments PART 2 OF THE RESOURCE MANAGEMENT ACT Section Section Section Section Assessment EXERCISE OF DISCRETION DETERMINATION Appendix 1: Plan of Tauhara II Geothermal Development Project Appendix 2: Comments received pursuant to s149q from Contact Energy Limited Appendix 3: Comments received pursuant to s149q from Taupo District Council Appendix 4: Comments received pursuant to s149q from Tauhara Moana Trust Appendix 5: Comments received pursuant to s149q from Mr Jack Waters vi

7 Appendix 6: Wairakei Naming Conventions Appendix 7: Tauhara Naming Conventions Appendix 8: Map of Proposed Development Areas with Indicative Production & Reinjection Areas Appendix 9: Diagram of Dual Pressure (Double Flash), Condensing Steam Turbine Plant 147 Appendix 10: List of Witnesses Appendix 11: Stratigraphy VOLUME 2: Terms and Conditions of the Consents Granted vii

8 INTRODUCTION [1] Contact Energy Limited (Contact) seeks resource consents to develop a power station on a site located east of Taupo and north of Mount Tauhara along with a steamfield development covering a broad area of the Tauhara Geothermal Field, collectively referred to in this document as the Tauhara II Geothermal Development Project. [2] The power station and associated steamfield development will require a range of resource consents. Contact already holds a number of existing resource consents for geothermal development on the Wairakei-Tauhara Geothermal System, of which the Tauhara Field forms part. These include suites of consents authorising the operation of: The existing Wairakei and Poihipi Power Stations and Steamfield; The existing Tauhara I Geothermal Development Project (which includes a Binary Plant and associated direct heat supply infrastructure); and The yet to be constructed Te Mihi Power Station Project consented in [3] In order to achieve integrated management of the Wairakei-Tauhara Geothermal System, it is proposed that the General Conditions governing the overall geothermal system management of Contact s existing resource consents above are fully integrated with any resource consents granted for the Tauhara II Geothermal Development Project. Contact therefore seeks to change some of the key General Conditions applying to the Wairakei (including Poihipi), Tauhara I and Te Mihi resource consents in order to ensure integrated and consistent management. [4] For the same reason, Contact is also seeking that the regional resource consents authorising the ongoing operation of Tauhara I be combined with the new Tauhara II Geothermal Development. If granted, both projects would be administered under one overall set of consents. This would align the duration of the Tauhara I consents with the 35 year term sought for this application. 1

9 [5] The Tauhara II Geothermal Development Project is graphically illustrated in the figure attached as Appendix 1 1. There are six key components for which authorisations are sought: i. The Construction, Operation and Maintenance of the Tauhara II Power Station and Steamfield Works Landuse consents for the construction, operation, maintenance, replacement, renewal and minor upgrading of the proposed Tauhara II Power Station and associated steamfield works. Given that construction of the Tauhara I Power Station is completed it is impractical and unnecessary to include the Tauhara I landuse consents in an overall bundled Tauhara consent application. ii. Tauhara II Switchyard and Transmission Line Realignment The switchyard and the realignment and modification of a section of the existing 220 kv Wairakei to Whirinaki A transmission line required for connection of the Tauhara II Power Station to the National Grid are the subject of separate landuse applications to transfer these assets to Transpower New Zealand Limited which will ultimately own and operate this equipment. iii. Production Take and Reinjection/Injection Consents Resource consents are sought for the take and reinjection/injection of geothermal fluid at volumes sufficient to enable operation of both the Tauhara I and II Power Stations and ongoing direct heat supply (i.e. continuation of the existing Tenon heat supply and new industrial supply arrangements) over the proposed 35 year consent term. If those consents are granted, the existing Tauhara I consents for take and reinjection/ injection of geothermal fluid will be surrendered. iv. Air Discharge Permits Contact seeks a new resource consent for its discharges to air associated not only with the proposed Tauhara II Power Station and steamfield, but also to renew and replace the existing consent for discharges to air from the Tauhara I Power Station and the steamfield supplying it. Again, if this resource consent is granted, the intention is that the existing Tauhara I resource consent will be surrendered. 1 Resource Consent and section 127 Applications, Plan 1 2

10 v. Steamfield Consents The resource consent application includes a range of consents necessary for the ongoing development and operation of the Tauhara I and Tauhara II steamfields. A small number of the existing Tauhara I resource consents will be retained in whole or in part. A change is sought for the water take from the Waikato River to clarify the basis on which an existing resource consent is used for the Tauhara II Geothermal Development Project. vi. Change to Existing General Conditions Contact has sought a change to the General Conditions applying to its Wairakei (including Poihipi), Tauhara I and Te Mihi resource consents with the objective of ensuring that a common set of General Conditions is in place for the ongoing geothermal system management. 2 2 Assessment of Environmental Effects at 1 and 2. 3

11 REFERRAL BY MINISTER TO BOARD OF INQUIRY AND COMMENTS ON THE DRAFT REPORT [6] The application was lodged with the Environmental Protection Authority (EPA) by Contact, under section 145 of the Act, on 19 February [7] The EPA commissioned the Regional Council and District Council to review the application for completeness and report their findings. That process was completed on 4 March 2010 with the application being deemed complete under section 88 of the Act. [8] Following the section 88 assessment, the need for further information on the application was determined. No request for further information was made under section 92 of the Act. [9] On 16 March 2010 the Secretary for the Environment recommended to the Minister for the Environment, under section 146 of the Act, that Contact s Tauhara II proposal was a matter of national significance and that the Minister should direct the application to be heard and determined by a Board of Inquiry in accordance with Part 6AA of the Act. [10] On 17 March 2010 the Minister, under section 147(1)(a) of the Act, made a direction referring the matter to a Board of Inquiry. The Minister s direction was publically notified under section 149C of the Act on 17 April [11] The Minister s reasons for referring the matter to a Board of Inquiry were: (a) The matter involves, or is likely to involve, significant use of natural and physical resources: Geothermal systems are a natural resource limited to a relatively small area of New Zealand. The Tauhara II proposal for a power station with a generating capacity of 240 to 250 mega watts will involve significant use of the Wairakei-Tauhara geothermal resource. The Tauhara field represents probably [the] largest developable geothermal resource in the Taupo Volcanic Zone. 4

12 (b) The matter affects or is likely to affect or is relevant to New Zealand s international obligations to the global environment: The proposal is relevant to New Zealand s international obligations to the global environment under the Kyoto Protocol because it will develop a renewable energy generation resource that will reduce the emission of green house gas per unit of electricity produced in New Zealand. [12] The public notice of the Minister s direction invited interested persons to make submissions on the application. Submissions closed on 14 May The EPA received 60 submissions. [13] Following a hearing at Taupo between the 13 th of September and the 6 th of October 2010 we issued a draft report and decision on the 20 th of October 2010 pursuant to section 149Q of the Act. In that draft report and decision the resource consents applied for were granted subject to terms and conditions. [14] Pursuant to section 149Q(3) of the Act the EPA provided a copy of the draft report and decision to all those persons required by that section. Pursuant to section 149Q(4) of the Act the EPA invited persons to whom it sent the draft to send any comments on minor or technical aspects of the draft report to the EPA no later than 20 working days after the date of the invitation. [15] The following persons made comments: Contact Energy Limited; Taupo District Council; Tauhara Moana Trust; and Mr Jack Waters. We attach as Appendices 2, 3, 4 and 5 respectively the comments received. [16] We have considered the comments made and have incorporated them into this final decision, save for the amendment requested by Contact to condition 18 of consent EPA 10/ Contact requested that an Advice Note be inserted to clarify what is meant by atmospheric discharge testing. The Advice Note was: 5

13 Atmospheric discharge testing in this context is intended to refer to direct discharges (i.e. not through a silencer) from a well head while it is being tested. The purpose of the condition is to control unreasonable noise. [17] Our reasons for refusing the request by Contact are: i. The effect of the Advice Note narrows the meaning of atmospheric discharge testing. ii. The condition itself should define its own limits. It is inappropriate to use Advice Notes to limit the meaning of a condition. iii. The Advice Note, on the face of it, limits the effect of the condition in a different way to the condition proposed at the Hearing. We consider it inappropriate to change the effect of the condition without giving other parties the opportunity to comment. iv. As the Advice Note, on the face of it, limits the effect of the condition, it goes beyond a comment as permitted by section 149Q(5)(a). It changes the scope and meaning of the condition. 6

14 BACKGROUND [18] The Wairakei-Tauhara Geothermal System is one of fifteen large geothermal systems in the Waikato Region. It comprises two areas which are referred to as the Wairakei Field and the Tauhara Field. The Wairakei Field covers an area of some 25 km 2 to the west of the Waikato River. The Tauhara Field is generally to the east and north of Taupo town covering an area of some 50 km 2. There is no precision in the delineation between the Wairakei and Tauhara geothermal fields. The cross over is considered to occur in the area of the Waikato River. [19] Attached as Appendices 6 and 7 3 are maps delineating the system, as defined by resistivity surveys and conventional names, based on both development patterns and the current interpretation of boundaries and features within the field. Geology [20] The Taupo Volcanic Zone (TVZ) comprises a northeast trending graben 30 to 80 km wide extending from volcanoes of the Tongariro Group in the south to Whakaari (White Island) and beyond. The graben is mostly filled with geologically young (up to about 1.1 million years old) volcanic deposits of rhyolite lavas and pyroclastics but also andesite, dacite (this includes Mount Tauhara) and rare basalt lavas. Locally interbedded with the volcanic deposits are lake and river deposited sediments largely derived from older volcanic deposits. These all overlie much older metasediments of greywacke that are the basement of the TVZ. [21] The TVZ is tectonically active and is pulling apart at measurable rates (~10 mm/yr in places). This has resulted in widespread tensional (i.e. normal ) faulting that affects the hydrology of the region and its geothermal systems. Major and many minor faults are oriented in a northeast-southwest direction, but some northwest oriented faults are also recognised. [22] The geology of the Wairakei Field is now reasonably well known down to a depth of about 2.5 km through study of drill cores recovered by Contact and its predecessors. The stratigraphic sequence comprises a series of volcanic rocks - rhyolite lavas, ashes and ignimbrites (including the Waiora Formation), and minor andesite lava and 3 From the Draft System Management Plan February 2010 at 12 and 13. 7

15 lake deposited sediments (Huka Falls Formation). These overlie the greywacke basement which has been reached in only a single well (TH17) in the eastern part of the Tauhara Field. [23] While the geology of the Wairakei Field is quite well known, until recently the Tauhara Field was much less so. However, as a result of recent drilling by Contact, and reported in the evidence of Mr Rosenberg, we now know much more about its geology. The Tauhara Field hosts many of the same formations that occur in the Wairakei Field but also others, such as some rhyolite and andesite lavas whose occurrence was not known previously. Sources of High Enthalpy Fluid [24] Within the Wairakei-Tauhara Geothermal System there are at least two distinct upflows of high enthalpy fluid. The upflows lie under and within the area of the Wairakei and Tauhara Fields. The boundary of the system (delineated by resistivity), outlines the Wairakei and Tauhara Fields as one system at depth. Pressure measurements made in the deeper northern Tauhara wells provide evidence of a hydrological linkage between the two fields. [25] Pressure and temperature measurements in recently drilled wells 4 confirm a hot upflow in the vicinity of Mount Tauhara. There is some evidence 5 that suggests another source of geothermal fluid upflow in South Tauhara, around and south of the Napier-Taupo Road. Alternatively, there is a single upflow extending across a wide area of the Tauhara Field. [26] In North Tauhara the maximum measured temperatures in the deeper wells have been relatively stable over decades. The average well output and discharge enthalpy are higher than for the Wairakei Field. It is this source of high enthalpy fluid that Contact is seeking to use. 4 TH10 and TH12. 5 An elevated pressure profile at depth in TH10 and more especially the continuation of discharges in the south despite pressure effects elsewhere in the Field. 8

16 Surface Features [27] Prior to development, the Wairakei-Tauhara Geothermal System had an impressive surface expression. Surface manifestations included at least 22 geysers, hot springs and numerous fumaroles, including Karapiti fumarole. There were also large areas of steaming ground, mud pots and hydrothermal eruption craters. The geysers and hot water pools at Wairakei were supplied by water ascending from the reservoir and it is this water that is tapped by production drill holes supplying the Wairakei Power Station. However, the thermal water is believed to be mainly ancient rain water that penetrated to great depth, but is now ascending via interconnected fractures as a result of its becoming heated by a magmatic source, well below depths reached by drilling. [28] The thermal manifestations in the Tauhara Field were generally less well known than those at Wairakei, but were substantial and impressive none the less. They included hot water discharges at Waipahihi, at Spa Sights (e.g. Crows Nest Geyser) and along the shore of Lake Taupo. There were large areas of steaming and hot ground in several places, notably at the Broadlands Road Reserve and the Crown Road Reserve accompanied by thermally stressed vegetation, particularly prostrate kanuka. [29] These surface features have been utilised by Maori for centuries. Together with Mount Tauhara (Tauhara Maunga) they have been woven into the fabric of their mythology and have been utilised by Maori for many uses such as bathing, washing, cooking, heating, ritual ceremonies and healing. Trade developed around the use of byproducts such as red ochre (kokowai). Maori thus have a strong connection to Mount Tauhara, the geothermal features and the geothermal resources that sustain them. They are important taonga. Renewability of the Resource [30] Under the Act, geothermal resources are defined as being renewable energy resources. There have been discussions around the renewability of geothermal resources, given that the development of a resource alters and depletes the reservoir(s). We recognise that there is a near infinite source of geothermal energy within the magma at depth, and that this slowly releases its heat through the overlying strata and associated aquifers. 9

17 [31] This magmatic heat source is likely to be at a depth of 8-10 km beneath this part of the TVZ. Geothermal fields are driven by both the underlying magma bodies, and through fluids circulating through deep fractures and along rock contacts to bring convective forces into play. Even when depleted through development, a significant portion of heat remains unmined from the resource, such that continued use is possible in a modified form. [32] Should a geothermal resource be developed and its aquifers depleted, then resting of the field will eventually see it return to a state similar to its undeveloped state, through a combination of conduction and convection, from the bottom up. The evidence of Professor O Sullivan 6 was that the time for this restoration is a function of the ratio of extraction rate to natural through-flow or recharge. For the Wairakei- Tauhara Geothermal System this would mean a recovery period of approximately seven times the operational period. System Development [33] For many years the resource has been utilised by small bore holders for domestic and commercial uses. There are a large number of existing bore users who utilise the resource for heating their homes and swimming pools. There are also a number of commercial users who utilise the resource for such purposes as heating public swimming pools and spa pools; heating hotels and motels; prawn farming and drying timber. [34] Large scale development of the Wairakei-Tauhara Geothermal System commenced before the commissioning of the Wairakei Power Station in 1958 by the New Zealand Government. Additional generation capacity has been developed on the Wairakei Field with the commissioning of the Poihipi Power Station in 1996 and the Wairakei Binary Plant in [35] Exploration of the Tauhara Geothermal Field started in the 1960 s and identified that a productive geothermal resource was located in North Tauhara. Resource consents were granted in 2001 for a 20,000 tonnes per day development in the North Tauhara sector. These resource consents were utilised initially for direct supply of process 6 O Sullivan EiC at [9.43] 10

18 heat to local industry augmented by the commissioning of the Tauhara I 7 Geothermal Power Station in Potential Adverse Effects of Development [36] Geothermal development for large scale electricity production or direct heat use inherently creates pressure and temperature change within a geothermal resource. This has impacts on the state of a geothermal reservoir and its surface features. Of particular relevance are the following effects: i. Potential property damage through differential subsidence the removal of large volumes of fluid from a geothermal reservoir can compact strata once they dewater. This has occurred at Ohaaki and the Wairakei-Tauhara System where differential subsidence has affected buildings and structures. ii. iii. iv. Changes to surface thermal manifestations extraction for development can decrease pressure and form more steam. This will initially increase the volume of steam discharging in thermal areas, as has occurred at the Karapiti (Craters of the Moon) thermal area. Lowering of reservoir pressure may also increase the likelihood of hydrothermal eruptions that can cause damage. Sustainability of the resource the use of the resource over time has the effect of controlled depletion (reduction of temperatures and/or pressures) of the reservoir. Effect on Maori the resource is a taonga tuku iho to Maori. Thus its depletion over time and other development effects are considered by Maori to be culturally inappropriate. 7 Now known as Te Huka. 11

19 THE PROPOSAL [37] The application is detailed and thorough. It is contained in nine volumes of documentation. The proposed technology and numerous reports (in many cases peer reviewed) addressed the potential environmental effects of the proposal. Detailed draft conditions of consent together with draft management plans were also provided. The Overall Project [38] The Tauhara II Geothermal Development Project comprises the following main components: A power station and ancillary facilities that uses geothermal energy to generate approximately 240 MWe net; A new switchyard and modifications to the transmission lines to connect the power station to the nearby national electricity transmission network; Cross-country pipelines with separator stations connecting well pads to the power station and reinjection wells; Geothermal wells for production and reinjection/injection; and New vehicle access to the consent application area from local roads and state highways and the provision of internal service roads and other infrastructure such as water, power, and telecommunications. [39] Contact proposes an adaptive management approach for flexibility. The application explains that such an approach: 8... is driven by the fact that information from each new well drilled (production or reinjection) can materially influence the physical location of the next well and therefore the physical location of the connecting pipelines and other equipment. Geothermal systems under development also slowly deplete the geothermal resource being tapped by production wells, and make-up wells in new areas need to be drilled progressively over the life of the project to maintain the required steam flow to the power plant. Ongoing monitoring of the geothermal reservoir is undertaken and the geothermal operator needs to be able to adapt production and 8 Steamfield Design Protocol at 1 12

20 reinjection/injection to ensure sustainable use of the geothermal resource is maintained. [40] Contact asserts that it is not practical to accurately identify the location and extent of much of the infrastructure required on the steamfield at this stage. Contact proposes that a planning framework to enable progressive development of the steamfield with the required flexibility would be achieved by way of a Steamfield Design Protocol (SDP). [41] The SDP is provided as part of the application and defines objectives, requirements and practices, and performance criteria and standards for the development of the steamfield infrastructure in terms of engineering, landscape and visual, noise, archaeology and cultural matters. [42] An important part of the SDP is its differentiation between fixed elements and flexible elements within the overall development. The fixed elements are locked in and comprise: The power station and associated equipment; The switchyard, transmission connection and modification of an existing transmission line; The main pipeline corridors, including associated equipment. Contact seek a pipeline corridor up to 100 m wide; and The separator stations including associated equipment. [43] The flexible elements that Contact seeks are: Production wells; Reinjection/injection wells; Above ground piping other than the main pipelines; Below ground piping for conveying raw water for use in the power station and drilling, and condensate; Installation of a surface irrigation system; Other ancillary steamfield equipment; Access roads along pipelines; Above ground 11 kv power reticulation and steamfield control and communication cables; 13

21 Below ground control and communication cables serving equipment such as pumps; Communication towers less than 15 m high, radio antenna and solar panels; and Security and stock fencing. [44] The details of the establishment of the project are set out in the Assessment of Environmental Effects (AEE) 9. Appendix 8 10 graphically depicts the project. [45] Some areas of exclusions and setbacks are contained within the consent application area 11. These include: A total activity exclusion area covering the rural-residential properties on Centennial Drive to the west of the power station site and the area covered by Mount Tauhara both above and below the ground surface; Surface structure exclusion areas adjacent to Mount Tauhara, the Waikato River, Bonshaw Park lifestyle area and Maunganamu, the airport and covering significant geothermal areas such as the Broadlands Road Reserve; A m building buffer from two faults oriented roughly east-west directly to the south of the power station site; and A 500 m separation distance between the Tauhara II consent application area and the Rotokawa Geothermal Field boundary, apart from where the two field boundaries are physically closer. [46] Contact proposes draft conditions of consent for the district and regional consents required for the authorisation of the proposal, as well as proposing amendments to the General Conditions governing the Wairakei-Tauhara Geothermal System. The district conditions reflect the differentiation between fixed and flexible elements set out above. [47] The consent application area takes in 7,064 hectares held in several hundred separate land titles. Contact own some of the sites in the application area in fee simple, have surface and subsurface easement rights over most sites, and subsurface easement rights with the ability to acquire ownership via encumbrances if 9 See in particular Tauhara II Geothermal Development Project, Project Description Revision 0, February Project Description Figure See Appendix 1 14

22 required over a small number of sites 12. Contact currently has no legal interests registered. There are some sites however where [48] Most of the production wells would be located in the East and Central Tauhara areas, while the majority of the reinjection would be in the North and East Tauhara areas. Some production and reinjection would eventually occur in South Tauhara. Targeted shallow reinjection may be undertaken in a defined area adjacent to the eastern boundary of Taupo town and to the west of the Eastern Taupo Arterial route. The wells would be located on sites where Contact has existing, or would negotiate, access rights. Directional drilling would be used to access the geothermal resource under sites where Contact has only subsurface easement rights. [49] The Tauhara II consent application area takes in all of the Tauhara I Binary Plant consent area. Power Station, Switchyard and Transmission Line [50] The power station site is about 20 ha. A sealed access road is proposed from Off Road Highway to the power station site. This would be used for construction and ongoing access purposes. All roads, parking areas and other hard-standing areas would be paved with asphalt. The site would be surrounded by a security fence and some areas (e.g. switchyard) would be surrounded by safety fencing. [51] The primary buildings at the power station site would be the turbine hall, cooling towers and a steam separation plant. Various secondary structures would be required. A large electrical switchyard is proposed to be located 700 m northeast of the turbine hall. An existing 220 kv transmission line (Wairakei - Whirinaki A) would be diverted and reconstructed to connect to the new switchyard taking the electricity generated from the power station to the national grid. [52] Contact seeks consent for either of two proposed layouts for the power plant location. The architecturally designed building is proposed to be of concrete foundations with steel portal framing and long-run pre-painted aluminium cladding. One of the proposed site configurations sees the turbine hall orientated east-west, while the other configuration has the turbine hall orientated north-south. 12 See Figure 1.3 in the AEE at

23 [53] The cooling tower structures would be 155 m long by 20 m wide and 20 m high from a site level of 460 m asl (same as for the turbine hall). Three cooling tower blocks are proposed, one for each turbine, each comprising ten cells. The cooling towers would be similar in appearance to the Poihipi Power Station cooling tower. [54] To reduce recirculation of the cooling tower plumes back to the cooling tower inlets, the orientation of the cooling towers is required to be parallel to the prevailing wind direction. Thus, where the turbine hall is orientated east-west, the three cooling towers are also orientated east-west and set out in a triangular formation to the south of the turbine hall. Under the alternative configuration, where the turbine hall is orientated north-south, the three cooling towers remain orientated east-west but are set out in a line running north-south. [55] The formation of the power station, cooling tower and switchyard building platforms would require approximately 500,000 m 3 of earthworks, with batters of up to 6 m in height around the power station. This material would be used to form two large bunds designed to screen the power station and switchyard from certain viewpoints. These bunds would be shaped to reflect the landforms of the area. [56] Stormwater runoff from roofs and sealed areas at the power station site would be collected and directed to a lined stormwater pond with a capacity of 83,900 m 3 and an area of 2.6 ha. The stormwater pond would be able to store runoff from a 10 year storm event. If a 100 year storm event occurs the pond would overflow in a controlled manner via a weir and discharge into an ephemeral stream flowing northeast toward Off Road Highway. Appropriate bunding and separators are proposed to be installed at the power station site to ensure that any runoff containing oil or other hazardous contaminants does not enter the stormwater pond. Runoff around the new access roads, wellpads and the switchyard would be discharged via overland flow to adjacent ground areas. [57] A switchyard would be located approximately 700 m to the northeast of the power station to combine the outputs from the three turbines and connect them (via a transmission circuit) to the 220 kv Wairakei Whirinaki A transmission line that runs approximately north-south. The approximate height of the switchyard equipment is 35 m with lightening poles extending to 41 m. Concrete monopoles up to 35 m in height would be erected to support the lines taking the power from the station to the 16

24 switchyard. The existing transmission line would need to be realigned slightly to enter and exit the switchyard, and the new steel lattice pylons required will be up to 45 m high. Steamfield Infrastructure [58] In the remainder of the consent application area, away from the power station/cooling tower/switchyard location, a range of infrastructure is proposed. This includes production and reinjection wellpads, pipelines, steamfield access roads and other ancillary equipment. [59] Contact proposes to initially establish approximately 33 production wells, 17 separated geothermal water (SGW) reinjection wells and two condensate reinjection wells. Other wells may be required as development proceeds. [60] Pipelines would be above ground, except where they cross roads, due to insulation and thermal expansion requirements and to facilitate maintenance and inspections. The major pipelines would range in diameter from 0.4 m to 1.2 m. All the pipelines would be covered with recessive coloured aluminium cladding, to mitigate their visual effects. Power Station Technology [61] The proposal would draw geothermal fluid mainly from the Central, South and East Tauhara areas. A schematic diagram of the proposed power generation process is shown in Appendix [62] Double flash 14 technology would generate about 20 25% more power from the same amount of fluid currently extracted for the Wairakei Power Station (A & B). Double flash technology provides for the use of steam at different pressures in a dual admission turbine. [63] At the separator stations, geothermal fluid is separated into intermediate pressure (IP) steam and SGW. Both would be piped to the Tauhara II Power Station where the 13 AEE Figure 4.3 at Double flash is where the geothermal fluid is flashed twice at different pressures and separated into steam and SGW with the steam being expanded in the steam turbine. 17

25 SGW is again flashed to generate low pressure (LP) steam. The IP and LP steam expand through steam turbines to generate electricity. Steam vents near the power station would provide start up and pressure control. [64] After passing through the turbines the steam would be condensed using direct contact. The water for condensation would be sourced from condensate cooled in mechanical draft cooling towers and recirculated with assistance from pumps. After the steam is condensed in the condenser, some non condensable gases remain and would be removed by gas extractors and discharged to the atmosphere above the cooling tower stacks. The power station would be a conventional steam turbine plant. A full description of it is contained in the AEE. [65] The draft Construction Environmental Management Plan (CEMP) stated that the power station would take 38 months to commission. A construction programme was provided. Proposed Conditions of Consent [66] The draft conditions of consent filed with the application went through several iterations, as Contact addressed issues raised by submitters during the facilitation process and the Hearing. On 6 October 2010, the last day of the Hearing, Contact lodged the latest amended version. It is these conditions of consent, as amended by us, that we take into account. These are contained in Volume 2. 18

26 CONSENTS APPLIED FOR [67] The consents applied for are: Taupo District Council Landuse Consents EPA 10/1.001 (TDC RM100227): To construct, operate, maintain, replace, renew, and undertake minor upgrading of a geothermal power station and all associated structures, facilities, signage, 220 kv grid connection, and associated steamfield activities on the Wairakei-Tauhara Geothermal System within the Consent Application Area, including all ancillary activities and equipment, but excluding: the landuse activities authorised by a landuse consent granted by Order of the Environment Court on 17 January 2001 relating to the Tauhara I Geothermal Development Project (Tauhara 20,000 tonnes/day Project); and a new switchyard and the realignment and modification of a section of the existing 220 kv Wairakei to Whirinaki A transmission line described in separate but associated landuse applications lodged by Contact. EPA 10/1.002 (TDC RM ): To construct, operate, maintain, replace, renew, and undertake minor upgrading of a new switchyard (and all ancillary equipment, facilities, structures and signage) associated with a new geothermal power station on the Wairakei-Tauhara Geothermal System. EPA 10/1.003 (TDC RM 10029): To construct, operate, maintain, replace, renew and undertake minor upgrading of a section of 220 kv transmission line, associated support structures, equipment and facilities linking a new switchyard (the subject of separate consent) with the existing National Grid 220 kv Wairakei to Whirinaki A transmission line, 19

27 to realign a section of that existing line and to carry out modification works (including strengthening and the addition of new towers, earthpeaks and earthwires) necessary to enable connection of the new line to that existing transmission line. [68] Contact sought lapse periods of 10 years for all of these consents. Waikato Regional Council Regional Consents EPA 10/1.004 (WRC ): Water permit to take and use up to 213 kilotonnes per day of geothermal water and associated energy and heat within the Consent Application Area for any purpose directly or indirectly associated with the generation of electricity or the direct supply of steam, water or heat including well and aquifer testing and well maintenance. EPA 10/1.005 (WRC ): Discharge permit to discharge up to 194 kilotonnes per day of water including geothermal water, steam condensate, cooling water blowdown, suspended material, and added chemicals and tracers into land and underground water through reinjection and/or injection wells within the Consent Application Area. EPA 10/1.006 (WRC ): Discharge permit to discharge up to 6,500 tonnes per day of cooling water blowdown and steam condensate including added contaminants onto or into land by irrigation (and by seepage into underground water) within the Irrigation Consent Application Area. EPA 10/1.007 (WRC ): Discharge permit to discharge contaminants to air from two geothermal power stations and any direct use of heat and associated structures and steamfield activities within the Consent Application Area, including from 20

28 geothermal wells (including during drilling, testing and maintenance), separation plants and silencers, pipeline drains, vents and condensate traps and all associated geothermal steamfield equipment. EPA 10/1.008 (WRC ): Landuse consent to construct and/or alter wells drilled below the groundwater table within the Consent Application Area. EPA 10/1.009 (WRC ): Discharge permit to discharge water, including geothermal water, steam condensate, cooling tower blowdown, drilling muds and drilling fluids, all containing various solids, added chemicals and other contaminants during well drilling, well and aquifer testing and well commissioning onto and into land and underground water, within the Consent Application Area. EPA 10/1.010 (WRC ): Water permit to divert stormwater and to take and/or divert groundwater within the Consent Application Area for the purposes of constructing, operating and maintaining a geothermal power station (Tauhara Stage II), steamfield plant and structures (including steamfield equipment, access roads, and structures relating to the Tauhara Stage I Binary Plant), and all associated electrical equipment and infrastructure. EPA 10/1.011 (WRC ): Discharge permit to discharge stormwater and groundwater including contaminants onto or into land by way of soakage (including in circumstances which may result in those contaminants entering water) within the Consent Application Area. EPA 10/1.012 (WRC ): Discharge permit to discharge up to 15,000 tonnes per day of water including geothermal water, steam condensate, cooling tower blowdown and added contaminants directly onto and into land (including in 21

29 circumstances which may result in contaminants entering water) from lined holding ponds located at the Tauhara Stage II Power Station site and separation plants including during well and/or power station start up or shut down, fault conditions or planned equipment maintenance outages within the Consent Application Area. EPA 10/1.013 (WRC ): Discharge permit to discharge silica, geothermal water, steam condensate, and water including added contaminants during normal steamfield operation and maintenance onto and into land (including in circumstances that may result in contaminants entering water) within the Consent Application Area. EPA 10/1.014 (WRC ): Discharge permit to discharge up to 150 tonnes per annum of inorganic antiscalants into land via wells (including in circumstances which may result in contaminants entering water) within the Consent Application Area. EPA 10/1.015 (WRC ): Discharge permit to discharge up to 10 cubic metres per day of water including contaminants and sewage onto and into land (in circumstances which may result in contaminants entering water) through on-site treatment systems and associated subsurface land disposal facilities within the Tauhara Stage II Power Station site and within the switchyard site located immediately to the east of the power station site. EPA 10/1.016 (WRC ): Discharge permit to discharge stormwater to the existing natural waterway running under the Off Road Highway within the power station site. EPA 10/1.017 (WRC ): Landuse consent to construct, operate, maintain, and upgrade culverts and bridges, including any associated streambed disturbance and depositing of minor 22

30 amounts of substances such as construction material, fill and slash at locations along the main pipeline route. EPA 10/1.018 (WRC ): Landuse consent to undertake earthworks, roadworks, and land and vegetation disturbance, at the bridge and culvert locations along the main pipeline route, and within the bed of an ephemeral stream within the Tauhara Stage II Power Station site. EPA 10/1.019 (WRC ): Landuse consent to undertake surface and near surface earthworks and land and vegetation disturbance associated with the construction of geothermal pipelines and ancillary activities within, and within 20 metres of, Significant Geothermal Features located north of State Highway 5, between the Miro Street Industrial area and the eastern edge of the designated corridor for the Eastern Taupo Arterial Highway. EPA 10/1.020 (WRC ): Landuse consent to undertake soil disturbance associated with the subsurface construction, operation and maintenance of geothermal wells and ancillary activities within, and within 20 metres of, Significant Geothermal Features located north of State Highway 5 and immediately to the east of the designated corridor for the Eastern Taupo Arterial Highway, within the Consent Application Area. [69] Contact sought lapse periods of 10 years, and consent terms of 35 years, for all of these consents. Waikato Regional Council Section 127 Applications [70] Contact has also lodged applications under section 127 of the Act to change a number of the General Conditions, relating primarily to the Discharge Strategy and to monitoring requirements, attached to particular resource consents relating to the operation of the Wairakei Geothermal Power Station and the consented Te Mihi 23

31 Geothermal Power Station. The resource consents to which the General Conditions are attached are as follows: Wairakei Geothermal Power Station Consents (take of geothermal water), (take of geothermal water), (discharge to Waikato River), (discharge to Waikato River) and (discharge into land and underground water via injection/reinjection); Te Mihi Geothermal Power Station Consents (discharge into land and underground water via injection/reinjection) and (discharge onto land via irrigation). [71] The changes sought by Contact are intended to ensure that as far as possible, a common set of General Conditions applies to all major production and reinjection/injection consents held by the consent holder on the Wairakei-Tauhara Geothermal System, including those related to the Tauhara II Geothermal Development Project. Aside from variations to the conditions governing the discharge strategy and monitoring, these changes also include additional requirements for hapu representation on a peer review panel, amended requirements for reporting to the Regional Council and the addition of a new section of the General Conditions setting out requirements to identify and remedy effects the Tauhara II Project may have on third party shallow bore users. [72] Contact has also applied to change the conditions of the existing consent (to take water from the Waikato River) to limit the use of that water to the Tauhara I and Tauhara II Geothermal Development Projects. Activity Status [73] The most onerous activity status of the consents is discretionary. By applying the bundling rule, all consents must be considered under the statutory provisions that apply to discretionary consents. Under section 149P(3)(a) of the Act the application to change conditions of existing consents is to be treated as a discretionary activity. 24

32 STATUTORY REPORTS Section 149G Reports [75] Where a matter that is deemed nationally significant is referred to a Board of Inquiry, section 149G(3) of the Act stipulates that the EPA must: commission the local authority to prepare a report on the key issues in relation to the matter that includes- (a) (b) (c) any relevant provisions of a national policy statement, a New Zealand coastal policy statement, a regional policy statement or proposed regional policy statement, and a plan or proposed plan; and a statement on whether all required resource consents in relation to the proposal to which the matter relates have been applied for; and if applicable, the activity status of all proposed activities in relation to the matter. [76] Both the Regional Council and the District Council were commissioned by the EPA in accordance with section 149G(3). Those reports were made available to the Board, the applicant and all submitters to the application. [77] The section 149G reports provided by the Regional Council 15 and the District Council 16 both contained advice confirming that the consents lodged by Contact were complete and in compliance with section 88 of the Act. We agree. Section 42A Report [78] The Board commissioned Mr Grant Eccles, Planning Consultant, to prepare a report on the application under section 42A of the Act 17. The report provided was sent to Contact and all the submitters who indicated a wish to be heard. 15 Tauhara II Geothermal Development-Contact Energy Ltd, Key Issues Report by Waikato Regional Council, May Local Authority Report Section 149G Resource Management Act, Contact Energy Limited Tauhara II, Taupo District Council, 14 May Tauhara II Geothermal Development Project Report on applications under s42a Resource Management Act, AECOM, 20 July 2010 and 08 September

33 SUBMISSIONS [79] Following notification, the Board appointed Mr Hamish Hey, an independent Planning Consultant, to act as a Friend of Submitters, to advise on process. [80] Submissions closed on 14 May 2010 and the Board waived the time for 7 submissions filed late. A Summary of Submissions report, dated 21 May 2010, was sent to all parties on 27 May [81] Of the 60 submissions received the outcomes sought were: 6 Support 1 Support in Part 34 Oppose 5 Oppose in Part 3 Neutral 11 Mixed [82] The topics and issues raised in the submissions fell broadly into the following categories some submissions fell under more than one category: Shallow Bores 27 submissions Subsidence and Hazards 20 submissions Generation 4 submissions Surface Features 1 submission Amenity 14 submissions Air Quality 6 submissions Cultural Values 16 submissions Resource Ownership 6 submissions Benefits 4 submissions Policy/RMA 5 submissions Economics 11 submissions Flora and Fauna 4 submissions Consultation 14 submissions Water 6 submissions Sustainability 9 submissions 26

34 Other Matters 8 submissions None Stated 1 submission 27

35 FACILITATED PRE-HEARING MEETINGS [83] At the direction of the Board a series of facilitated pre-hearing meetings were held between Contact and submitters throughout July, August and September Independent facilitators were appointed to facilitate these meetings. Various hui were held with tangata whenua submitters. Contact also independently undertook other meetings with submitters. [84] As a result of agreements reached during the pre-hearing meeting process, and during the hearing period, the following parties withdrew their submissions (the numerical reference in brackets represents the relevant submission number as referenced in the Summary of Submissions report dated 21 May 2010): Phillip and Gaye Greaves (38) Richard Abraham (49) Harold Bowers and Hendrica Ardern (48) Lorraine and Todd Marston (37) Cornelius and Anna Pol (39) Sherie McHardy (41) Chris Blyth (46) Colin Lloyd and Antonia Hooper (57) Donald Flight (58) Mike Pol (42) Lorna Maloney and John Young (43) John Cumming (47) Tauhara Middle 11 Trust (22) Robert Pol (40) Fatherheart Ministries Trust (44) Lakes District Health Board (20) The Trustees - Patuiwi Reserve Trust (10) Tauhara College Board of Trustees (55) Chelmswood Park Ltd (34) Keith Wilson (50) Noel Olsson (3) Phoenix Timeshare Resort (15) Robert Pitcairn (4) Taupo DeBretts(33) 28

36 THE HEARING AT TAUPO [85] The Board made an extensive site visit as a group on 15 July This assisted us to understand the evidence and issues. [86] The hearing commenced with opening submissions at Taupo on 13 September The following parties took part in the hearing: Contact Energy Limited Taupo District Council Waikato Regional Council Energy Efficiency and Conservation Authority Opepe Farm Trust Department of Conservation Mighty River Power Ltd Rotokawa Joint Venture Mr (Arthur) Jack Waters Ngā Hapū o Tauhara Mr Harvey Karaitiana (Tauhara Whanau Whanui Working Party) Ms Christine Kidwell (Tauhara Whanau Whanui Working Party) Mr Ian Thain Mr Tom Walters Wairakei Hapu Collective Tauhara Moana Trust [87] A number of submitters who had not withdrawn their submissions did not appear at the hearing. Notwithstanding, when considering the evidence we had regard to their submissions. [88] During the hearing, negotiations continued and a number of the parties reached an accord with Contact. The genuineness of any consultation is not measured by the extent to which it results in agreement 18. Nor does agreement necessarily mean that a proposal meets the purpose of the Act. But, in this case, in the context of a nationally significant project, we were pleasantly surprised at the extent to which agreement had been reached. 18 Crest Energy Ltd v Northland Regional Council, Environment Court Decision A132/2009 at [197]. 29

37 [89] By the last day of the hearing, just three of the submitters who took part in the hearing remained opposed to the proposal: i. Opepe Farm Trust maintained its opposition to the project and alternatively sought a series of significant amendments to the proposed conditions of consent; ii. Mr Thain maintained his opposition to the project based on efficiency issues and Contact s lack of progress in replacing the aging Wairakei Power Station with the Te Mihi Power Station; and iii. Mr Mack Clarke filed a short submission criticising the process (a matter outside our jurisdiction) and his opposition to the proposal because of its effect on Maori. Mr Waters also appeared at the hearing and sought a change to one aspect of the General Conditions dealing with subsidence mitigation. [90] In coming to our determination we have considered all of the evidence put before us. In total we have received evidence, either written or oral, from 41 witnesses. A list of witnesses is set out in Appendix 10. We have also had regard to all of the submissions, both written and oral. The volume of evidence and submissions is such that it is just not practicable to refer to all of the evidence and all of the submissions in this decision. 30

38 STATUTORY BASIS FOR DECISION [91] As a Board of Inquiry we are required to consider the relevant matters set out in section 149P of the Act: (1) A board of inquiry considering a matter must (a) have regard to the Minister s reasons for making a direction in relation to the matter; and (b) consider any information provided to it by the EPA under section 149G; and (c) act in accordance with subsection (2), (3)... (2) A board of inquiry considering a matter that is an application for a resource consent must apply sections 104 to 112 and 138A as it if were a consent authority. (3) A board of inquiry considering a matter that is an application for a change to or cancellation of the conditions of a resource consent must apply sections 104 to 112 as if- (a) it were a consent authority and the application were an application for resource consent for a discretionary activity; and (b) every reference to a resource consent and to the effects of the activity were a reference to the change or cancellation of a condition and the effects of the change or cancellation, respectively. [92] Earlier in this decision we stated the reasons of the Minister for exercising his discretion to refer the proposal, and to the section 149G reports prepared by the Regional Council and District Council for the EPA. Under sections 149P(1)(a) and (b) we must have regard to the Minister s reasons and consider the information in the Council reports. We must also have regard to any other information provided to us by the EPA. [93] The application, being of a discretionary activity status, requires us to consider it within the framework of section 104 of the Act. Of particular relevance to our considerations, subject to Part 2 of the Act, are: a) Any actual and potential effects on the environment of allowing the activities for which consent is sought; and 31

39 b) The relevant provisions of the: (i) Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 (ii) National Policy Statement on Electricity Transmission (iii) National Environmental Standards for Electricity Transmission (iv) Waikato Regional Policy Statement (v) Proposed Waikato Regional Policy Statement (notified on 3 November 2010) (vi) Waikato Regional Plan (vii) Taupo District Plan [94] As some of the consents applied for are for the discharge of contaminants, sections 105 and 107 of the Act apply. 32

40 PRINCIPAL ISSUES IN CONTENTION [95] From the application, the submissions filed, the evidence and the written and oral submissions, we identify the following principal issues: 1. The potential effects of the proposal on the environment a. Positive effects b. Negative effects Effects on Maori Effects on the sustainability of the geothermal resource Effects on the efficient use of the resource Effects on other resource users Effects on users of neighbouring assets and infrastructure Effects of differential subsidence Effects on groundwater Effects on amenity 2. The application of the relevant statutory instruments 3. The application of the relevant statutory framework 33

41 THE PERMITTED BASELINE AND THE EXISTING ENVIRONMENT The Permitted Baseline [96] The ability to apply the permitted baseline to assess an application is a discretionary power under the Act 19. [97] The Regional Council, in its section 149G report, analysed in some considerable detail the permitted baseline that would apply to the regional consents. The report concluded: 20 Based on the above analysis of the relevant permitted activities that apply to the subject site, the following conclusions are drawn: (a) with regard to the applications for: a. irrigation of condensate (120546); b. discharge from well drilling and testing activities (120549); c. discharge of stormwater and groundwater to land (120551); d. minor discharges to land (120553); e. sewage discharge (120555); f. overflow stormwater discharge to water (120556); - the permitted baseline consideration has significant relevance (ie many of the effects of these activities could be disregarded under s104(2)); (b) with regard to the applications for: a. groundwater take and diversion and stormwater diversion (120550); b. stream crossings (120557); c. earthworks within High Risk Erosion areas (120558); - the permitted baseline consideration has some relevance (ie some of the effects of these activities could be disregarded under s104(2)); 19 section104(2). 20 Regional Council Key Issues Report at

42 (c) with regard to the applications for: a. the main geothermal take (120544); b. the main reinjection discharge (120545); c. the emissions to air (120547); d. the construction of geothermal wells (120548); e. the discharges from the power station pond and separation plants (120552); f. the antiscalant discharge (120554); g. the earthworks associates with SGFs (120559) h. the wells beneath SGFs (120560); - the permitted baseline consideration has little or no relevance (ie there are few if any relevant permitted effects that might be disregarded under s104(2)). [98] In the exercise of our discretion under section 104(2) we consider the consents in the round. We elect not to exercise our discretion to apply the permitted baseline to the regional consents, because of the scale, complexity and nature of the proposal as compared to the permitted activity provisions of the Regional Plan. [99] The District Council, in its section 149G report, emphasised the difficulties in accurately applying the permitted baseline under the District Plan to the proposal, given the size of the consent application area 21. We elect not to exercise our discretion to apply the permitted baseline to the district consents, because of the scale, complexity and nature of the proposal as compared to the permitted activity provisions of the District Plan. [100] As will become clear in our analysis on potential adverse effects, applying the permitted baseline would make no difference to the outcome of our decision. The Existing Environment [101] The consent application area takes in 7,064 hectares largely on the eastern side of the Waikato River, and to the north, east and south of Taupo town. The power station 21 At [7.3]. 35

43 site itself is located about 4.5 km northeast of Taupo town, and directly north of Mount Tauhara which is the dominant landform in the area. [102] The landscape is representative of the predominant land use activity in the area, pastoral farming. Pasture grasses and exotic tree shelter belts exist. Mount Tauhara consists of second generation forest, some mature forest, old plantation and wilding pines. [103] In the vicinity of the consent application area, the following commercial activities and associated infrastructure exists: Taupo Racecourse; Taupo Motorsport Park; Taupo Waste Transfer Station; Landfill on Broadlands Road; Winstones Quarry on the north spur of Mount Tauhara; Truck stop (Stag Park) and storage depot on SH5; Taupo sewage land discharge; Tenon Timber Mill a direct user of geothermal energy; and Miro Road Industrial Park. [104] Residential dwellings in the consent application area are mostly associated with lifestyle properties in an area west of the consent application area on Centennial Drive, and in Bonshaw Park southeast of the application area accessed from SH5. [105] There are currently six geothermal power stations within 11 km of the proposed Tauhara II power station. These are: Wairakei km NNW; Wairakei Binary km NNW; Poihipi km WNW; Rotokawa km NNE; Nga Awa Purua km NNE; and Tauhara I - 3 km W. 36

44 In addition there are two consented, but yet to be built, power stations: Te Mihi 10.8 km NW; and Ngatamariki 20 km N. [106] Part 3 of the section 149G report from the Regional Council 22 provides a detailed and thorough description of the existing physical environment of the Wairakei-Tauhara Geothermal System, with emphasis on the Tauhara Field. In the absence of any evidence to the contrary we adopt that description. We do not therefore reproduce it here. It provides an overview and a conceptual understanding of the existing environment. It addresses such matters as: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) Watersheds and streams; Air quality; The utilisation of the Wairakei-Tauhara Geothermal System; Geological and geophysical structure; High enthalpy fluid; Reservoir pressure; Surface features; Ecology; Surface use; System management; Reinjection/injection; Subsidence; Shallow groundwater; Cascade users; Direct users such as public swimming pools, hotels/motels and hospitals; and Shallow well owners mostly for private domestic use. [107] The section 149G report from the District Council 23 explains the existing environment with a focus on any relevant resource consents associated with geothermal exploration and development within the consent application area. This is restricted to the Tauhara I consent and a certificate of compliance to construct a geothermal pipeline from Tauhara I to reinjection wells TH16 and TH At At 11 and

45 EFFECTS OF THE TAUHARA II PROPOSAL ON THE ENVIRONMENT Approvals Gained [108] One written approval to the Contact application was provided by the District Council in its capacity as landowner of the property containing the Taupo Motorsport Park, that fronts Broadlands Road in the vicinity of the Off Road Highway. Pursuant to section 104(3)(a)(ii) of the Act, in assessing and deciding upon the Contact application we have taken no account of the actual or potential effects on the Motorsport Park property of the activities for which consents are sought. Positive Effects [109] There was no dispute that implementing the proposal and its ongoing operation would have a number of positive effects. Mr D Hunt, an Economic Analyst, gave undisputed evidence outlining the expected benefits from a national perspective of the proposal 24. These, and other undisputed benefits, include: i. Additional energy supply the project is expected to generate around 2,050 GWh/year of electricity, once it is fully commissioned. This level of annual generation output would: Meet around 37% of the projected growth in New Zealand s total electricity demand by 2017, the year when the project could be fully operational; or Meet the annual needs of approximately 270,000 households (estimated to be approximately 100% of Waikato and Bay of Plenty households in 2017); ii. Value avoid the need to develop an alternative supply option that is expected to be more expensive; iii. Diversity of supply New Zealand s electricity supply is currently dominated by hydro and thermal generation. The development will help diversify this supply; 24 Hunt EiC at [5] and Exhibit DTH1 at 9 and 10 and following. 38

46 iv. Security of supply the project would generate base load electricity, aside from plant closures to address maintenance requirements; v. Renewable target the project would contribute to generating 90% of New Zealand s electricity from renewable sources by 2025 without compromising security of supply, a target that is identified in the New Zealand Energy Strategy; vi. Greenhouse gas emissions the net impact on greenhouse gas emissions from the project ranges from a reduction of approximately 500,000 tco 2 e/year to an increase of 270,000 tco 2 e /year from 2017, depending on vii. viii. the nature of the alternative generation that would be displaced; Roading improvements; and A net positive impact to the local and regional economy during both the construction and operation phases of the project. [110] We have regard to these positive effects. Potential Adverse Effects Maori Matters [111] The Wairakei-Tauhara Geothermal System lies within the traditional rohe of Ngati Tuwharetoa; the mana whenua iwi. Ngati Tuwharetoa and Nga Hapu o Ngati Tuwharetoa consider the Wairakei-Tauhara Geothermal System as a significant taonga tuku iho. Nga Hapu o Ngati Tuwharetoa or more specifically, the Tauhara hapu have a long association and relationship with the Tauhara geothermal resource. The Tauhara hapu are mana whenua in the Wairakei-Tauhara rohe with kaitiaki obligations to protect and sustain the Tauhara geothermal resource. This relationship is partially illustrated by the following whakapapa and ngeri 25. The sky reverberates, the land shakes and trembles Ruaūmoko the heated child awakens The world knows fear. 25 Hall EiC at 4. 39

47 From Traditional Ngeri Song of Derision In the bosom of the earth, in the bed of the rock lies the awesome gift of Rakahore - the unseen fire that smolders and burns for eternity. It is a covered heat, like a lidded pot that boils, that heats the waters that bubble and steam. The curative waters that soak the weariness from my muscles. The regenerative waters that soothe old wounds; that re-knit old joints; that bring sleep to old eyes. Steaming waters that coax the healing aromas from the leaves. Oven waters that cook my food; that steam and pressure, powered from the earth. It heats the world beneath me, it heats the babe still in arms suckling at the breast of Papatūānuku - Ruaūmoko the lastborn. Who kicks and shouts, and shakes the world in his fiery tantrums of revenge. Mountains explode, geysers erupt, mud pools boil. Ruaūmoko stamps his haka. [112] Maori view of development includes a strong emphasis on sustainability 26 and this has been reflected in the evidence. In the case of the Tauhara Field, this is strongly influenced by the view that the geothermal resource is linked to Tauhara Maunga and is intimately linked to Ngatoroirangi 27,28, a man of great stature and tupuna of Ngā Hapū o Tauhara 29. [113] The geothermal resource is a taonga 30 made available through him and having provided benefits to the generations of people of the region since his arrival on the Te Arawa canoe, and which should be available for future generations. According to Ngā Hapū o Tauhara whakapapa, Ngatoroirangi is descended from Io along with the gods of puia (volcanoes), waiariki (geysers) and ngawha (hot pools). 26 Johns EiC at [12]. 27 Hall EiC at [15,16]. 28 Rameka EiC at 2,3. 29 Johns EiC at [6], Johns EiC at [3]. 40

48 [114] The hapu of this area relate to their physical environment as they would to another relative. The hapu will always remain on the ancestral land in a collective sense, so must weigh up immediate benefits for those living today with those of future generations 31. [115] The Patuiwi Reserve Trust is an Ahu Whenua Trust with land situated on the eastern side of the Waikato River and within the area of the Wairakei-Tauhara Geothermal System. The Trust has over 1700 beneficial owners. The Trust submission outlined concerns about the amount of geothermal take being asked for by Contact and the possible effects of that take on subsidence on Trust land and its possible effects on native flora and taonga. [116] Before the hearing, Patuiwi Reserve Trust s concerns were addressed and as a result it withdrew its submission. [117] The Tauhara Middle 11 Trust is an Ahu Whenua Trust with responsibility for land located at the base of Tauhara Maunga. Tauhara Middle 11 represents the interests of 11 beneficial owners. The Tauhara Middle 11 Trust made a submission to this proposal. The submission outlined concerns with the lack of consultation with Contact, the possible adverse visual effects of the proposal on Tauhara Maunga, the risk of subsidence and the sustainability of the geothermal resource if the proposal was to go ahead. [118] The Trust s concerns were addressed by Contact at a subsequent facilitation meeting and as a result Tauhara 11 Trust withdrew its submission. [119] The Tauhara Moana Trust is an Ahu Whenua Trust which has land located on the northern slopes of Tauhara Maunga toward the Waikato River. The Trustees are the registered owners of the Tauhara North No. 3B Block and the Parariki Block, a total area of approximately 1,250 hectares. The Trust represents the interests of 1,822 beneficial owners. The Trust submission to this proposal covered sustainability, subsidence, landscape and visual effects and cultural effects, especially in relation to Tauhara Maunga. 31 Johns EiC at [12]. 41

49 [120] As a result of discussions, the Trust and Contact agreed to a set of conditions to mitigate Tauhara Moana Trust concerns. These conditions, among other things, included measures to give effect to the Trust s role as kaitiaki 32 : (a) Provision for Tauhara Hapu to be represented on the Peer Review Panel; and (b) Revised Kaitiaki consent conditions which provide for a Geothermal Kaitiaki Reference Group with specific responsibilities with respect to the Tauhara II Project. [121] The Wairakei Hapu Collective represents the interests of the Wairakei hapu. The Collective was formed in 2001 to consider the re-consenting of the Wairakei geothermal power station. Since then the Collective has continued to represent the interests of the Wairakei hapu. The Collective has a long standing relationship with Contact and this relationship is given effect to in the Heads of Agreement signed by both parties in 2004 and a Deed of Variation to the Heads of Agreement in Although the Collective made a neutral submission to this proposal, continued engagement with Contact enabled mutual agreement on further conditions to protect the taonga of the Collective. [122] As a result of discussions and following a review of the conditions of consent and receiving independent technical advice, the Collective was satisfied that the combination of adaptive management conditions and mitigation measures would assist in the mitigation of further effects on the taonga of Wairakei 33. [123] The Tuwharetoa Maori Trust Board is the Iwi Advocate for Ngati Tuwharetoa. The Trust Board reinforced that Ngati Tuwharetoa is linked by whakapapa to the taonga tuku iho in the Wairakei-Tauhara rohe. The Trust Board s submission makes comment on all parts of the Contact proposal but was especially concerned that there appeared to be no meaningful consultation between Contact and Nga Hapu o Ngati Tuwharetoa. The Trust Board indicated that this lack of engagement would not allow cultural, spiritual and environmental issues to be considered by Contact as part of their proposal. 32 Tauhara Moana Trust synopsis of submissions at 7, at [4.4]; General Condition Wairakei Hapu Collective Synopsis of Submissions at 1, at [1.5]. 42

50 [124] Latterly and as a result of facilitation meetings and ongoing dialogue, the Trust Board was satisfied that Contact was now positively engaged with Nga Hapu me Nga Ahu Whenua o Ngati Tuwharetoa. Accordingly, the Trust Board no longer wished to appear before the Board of Inquiry but wished to place its letter outlining its concerns and subsequent satisfaction on record 34. [125] Tauhara Mountain Trust and Tauhara Middle 15 Trust made a joint submission to the Contact proposal. The Tauhara Mountain Trust is a Maori reservation comprising Tauhara Middle 4A2A and Tauhara Middle 18 blocks. Maori reservations are set apart, pursuant to section 338 of Te Ture Whenua Maori Act 1993, for places of cultural, historical or scenic interest, and for waahi tapu being places of special cultural significance according to tikanga Maori 35. Tauhara Maunga is situated on the Tauhara Mountain Trust blocks. [126] Tauhara Middle 15 is an Ahu Whenua Trust with land located adjacent to Tauhara Mountain Trust land. Tauhara Middle 15 land was partitioned off as a separate Trust, from the Tauhara Mountain Trust, to allow the Trust to carry out commercial activities. Both the Tauhara Mountain Trust and the Tauhara Middle 15 Trust have largely common ownership. [127] For both Trusts, Tauhara Maunga is the ancestral maunga of Ngā Hapū o Tauhara and of great spiritual significance to the hapu 36. The primary concerns of both Trusts relate to the potential adverse effects of the proposal on the cultural and environmental values of the hapu, the taonga that is Tauhara Maunga and the mauri or sustainability of the geothermal resource. [128] As a result of discussion between Contact and both Trusts, agreement was reached on a range of matters which included: (i) A process for preparation of a steamfield management agreement with respect to potential future development of the land vested in the Trusts; and (ii) Proposed amendments to General Condition 8 in relation to multiple operators Tuwharetoa Maori Trust Board letter dated 2 September Tauhara Mountain Trust and Tauhara Middle 15 Trust Submission at [3.3]. 36 Tauhara Mountain Trust and Tauhara Middle 15 Trust Submission at 2, at [3.4]. 37 Simon Berry letter dated 7 September 2010 at 1, at [3(a)] and [3(b)]. 43

51 [129] Accordingly, both Trusts sought leave which was granted, to withdraw from the proceedings. The Tauhara Mountain Trust and the Tauhara Middle 15 Trust submission was not withdrawn. [130] The formation on 3 July 2010 of the Tauhara Whanau Whanui Working Party was principally to provide a vehicle to facilitate communication and understanding between Contact and Nga Hapu o Ngati Tuwharetoa regarding the Contact proposal. The July 2010 hui also confirmed the Working Party membership which comprises eight members from Tauhara Whanau Whanui 38 and four members from Contact. [131] Acting under the umbrella of the Working Party, seven members of the Tauhara Whanau Whanui; Mr Harvey Karaitiana, Ms Karaitiana-Kidwell, Ms Healey, Mr Baker, Mr Seymour, Mr Hohepa Karaitiana and Ms Bramley made individual submissions to the Contact proposal. Mr Harvey Karaitiana and Ms Karaitiana-Kidwell gave evidence at the Hearing on behalf of themselves, the Working Party and six other members of the Tauhara Whanau Whanui. [132] Since the formation of the Working Party, several hui with the Tauhara Whanau Whanui were called and various matters discussed and agreed. As a result, the Working Party developed and signed a Terms of Reference and adopted the following resolutions: 1. To reaffirm the Tauhara policy statement developed in 1997 regarding Tauhara geothermal resources; and 2. To establish a working party to unify Tauhara interests in development of geothermal resources 39. [133] The Working Party identified issues of cultural, spiritual and environmental concern and as a result a mitigation package was offered by Contact. This mitigation package was conditionally accepted by Tauhara Whanau Whanui and subsequently ratified at a hui on 2 October [134] The Tauhara Whanau Whanui now formally acknowledge that the agreement addresses, to the extent possible in the framework of the Act, the concerns raised by them on cultural issues Whanui meaning the wider Tauhara whanau. 39 Karaitiana (Harvey) EiC at 3, at [6], Exhibit B. 44

52 [135] Ngā Hapū o Tauhara is the collective term used to describe the hapu who are tangata whenua of the Tauhara area of northern Taupo, namely Ngati Hinerau, Ngati Hineure, Ngati Te Urunga, Ngati Tutemohuta, Ngati Tutetawha and Ngati Rauhoto. They are hapu of Ngati Tuwharetoa. [136] Ngā Hapū of Tauhara are the tangata whenua and kaitiaki of the Tauhara field, which includes the area the subject of the application 41. A hui was called at which the hapu representatives 42 resolved to make a submission opposing the proposal. [137] Ngā Hapū o Tauhara principal areas of concern were to preserve the sanctity and mauri of Tauhara Maunga, the geothermal resource and to fulfil their kaitiaki obligations. The submission also included the view that: 43 The relationship of Ngā Hapū o Tauhara with the geothermal resource, as a taonga of the Hapu, and the need for that relationship to be recognised and provided for. As will be expanded below, this relationship creates obligations, to act as kaitiaki of the resource, but also confers the right to benefit from it [138] After a request from Ngā Hapū o Tauhara, part of the Hearing was held on Waipahihi Marae on 5 October 2010, to hear evidence from their kaumatua. Mr Mataara Wall, Mr Johns and Mr Rameka gave evidence about the relationship of the hapu with Tauhara Maunga, the geothermal resource and the surrounding environment. [139] Mr Rameka said: 44 The key here lies within the word relationships. The hapu of Tauhara share an inherent relationship with their maunga (Tauhara) and the environment as a whole. Each, stream, valley, puia, ngawha and waiariki has a name; a specified use, a role to play and were often used as reference points as well. They form part of the greater picture and contribute to the survival of all that exists within. Like a family photo, we grieve when there are missing members. In essence, this is no different. 40 Memo Tauhara Whanau Whanui Working Party at 1, at [1.3]. 41 Ngā Hapū o Tauhara submission at 2, at [4] and [5]. 42 Those elected to represent their hapu on the Ngati Tuwharetoa Hapu Forum, which is the body mandated to negotiate a settlement of Ngati Tuwharetoa s Treaty claims. 43 Ngā Hapū o Tauhara opening submission at 1, at [3.1]. 44 Geoff Rameka EiC at 5. 45

53 [140] Ngā Hapū o Tauhara and Contact continued to engage with each other prior to and during the Hearing. An agreement was reached that is to provide for a cooperative approach to development and management of the system by Contact and the Hapu/Land Trusts. Accordingly, Ngā Hapū o Tauhara withdrew their opposition to the proposal. [141] Te Hapu o Ngati Tutetawha is one of the mana whenua hapu of the Tauhara region. A submission was made in opposition to the proposal. The issues of concern related to their kaitiaki responsibilities, especially the sustainability of the geothermal resources, the protection of taonga such as the sacred places handed down from their ancestors, and the possible adverse environmental effects of the proposal. [142] Ngati Tutetawha is one of six signatories to the submission by Ngā Hapū o Tauhara. Broadly speaking, the issues of concern in both cases were similar, with the protection of places of spiritual significance and the sustainability of the geothermal resources being of primary importance. [143] Ngā Hapū o Tauhara reached an agreement with Contact and subsequently withdrew their opposition 45. This agreement was ratified by the signatories of Ngā Hapū o Tauhara, which included Ngati Tutetawha. Consequently we consider Ngati Tutetawha concerns are addressed. [144] Mr Robert Pihema, a resident of Taupo, made a submission opposing the proposal. Mr Pihema s concerns relate to the validity of the processes used by both the EPA and the District Council in dealing with the proposal. Both are matters outside our jurisdiction. [145] The Hikuwai Hapu Lands Trust is a trust set up to facilitate the return of state-owned enterprise lands to local hapu and economic authorities, and generally to promote the social and economic well-being of local Maori 46. The Hikuwai Hapu Lands Trust submission raised concerns regarding inadequate consultation, lack of clarity around the extent of the application/proposal area, ownership issues and possible barriers prohibiting local Maori from developing the geothermal resource in their own right. 45 Memo of Counsel on behalf of Ngā Hapū o Tauhara, dated 20 September 2010 at [2]. 46 Hikuwai Hapu Lands Trust Submission at 5, at [1.1] and [1.2]. 46

54 [146] In considering the Hikuwai Hapu Lands Trust concerns, we note that prior to and during the Hearing, facilitation meetings and ongoing engagement between the parties resulted in agreements. Further to this, the application was specific in what area its proposal covered and these details are in Mr Kilty s evidence in chief 47. Agreements have also been reached regarding a cooperative approach to the development and management of the geothermal resource. [147] To the extent possible within the framework of the Act, the concerns raised by the Hikuwai Hapu Lands Trust are addressed. [148] Mr Clarke, a Taupo resident, affiliates to six of the hapu of Tauhara. His submission asserted that the proposal is culturally insensitive and disadvantages hapu land owners. Mr Clarke also contended that consultation between Contact and hapu was inadequate, ownership of the geothermal resource is yet to be determined and he questioned the validity of the Board of Inquiry process. [149] On the eve of the final day of the Hearing, the Board received a written submission from Mr Clarke who was critical of those Maori parties who had reached agreement with Contact. He maintained that those parties did not have an appropriate mandate. [150] We have no evidence challenging the mandate of the parties. Without evidence to the contrary, we accept the evidence that in each case the Maori parties had appropriate mandate either from their respective hapu or land Trust. [151] Mr Clarke was also critical of the consent process and of the timeframes associated with it. Both matters are outside our jurisdiction. [152] The Maori cultural issues raised by Mr Clarke reflected the issues raised by other Maori parties. All of those parties, other than Opepe Farm Trust, have reached agreement with Contact that address their concerns. We accept on the evidence, that the agreement reached does satisfy the provisions of the Act relating to Maori. We find that Mr Clarke s concerns are addressed. [153] Mr Clarke also made a submission of behalf of six hapu to which he affiliates; Ngati Tutemohuta, Ngati Tutetaawha, Ngati Hinerau, Ngati Hineuri, Ngati Te Urunga and 47 Kilty, EiC, Exhibit JK6, at page

55 Ngati Rauhoto. addresses their issues. These hapu have reached an agreement with Contact that [154] Mr Walters is the Chairperson of the Wairakei Hapu Collective Geothermal Working Party and a member of Te Kapa o te Rangiita. Mr Walter s submission wanted to ensure that the Wairakei-Tauhara hapu were consulted. The submission expressed concern about the mauri of the geothermal resource, the provision of a plan to cope with unforeseen events, amenity values and the ability for neighbouring landowners to develop the geothermal resource in the future. Mr Walters also asked that Contact consult with the current Trustees of Tauhara Middle 15 Trust. [155] In regard to Mr Walters concerns, we note that extensive consultation has occurred with the Tauhara hapu and the Middle 15 Trust resulting in several agreements. All hapu and Trust landowners were concerned about the mauri or sustainability of the geothermal resource and the taonga that is Tauhara Maunga. The measures put into place, such as additional conditions and mitigation packages, by Contact have gone some way to addressing spiritual, cultural, environmental and economic concerns of the hapu and land Trusts. [156] On 9 September 2010, the Wairakei Hapu Collective signed a Deed of Variation to the 2004 Heads of Agreement with Contact. Te Kapa o te Rangiita Whenua Komiti is part of that Collective and one of the signatories to the Deed of Variation. Mr Walters gave a closing submission thanking parties involved in the Hearing. During the closing submissions, counsel for the Collective, Mr Whata advised that Mr Walters submission was not at odds with the Collective s position. [157] Opepe Farm Trust represents the interests of over 4,000 beneficiaries who have whakapapa links to the mana whenua hapu of Tauhara. Opepe Farm Trust owns three blocks of land. Tauhara Middle No 4A and Tauhara Middle No 2B and No 2C being Maori freehold land, and the third known as Tauhara North Block or Tauhara North 3A Block. The Tauhara North 3A Block is jointly owned with Tauhara Middle 15, with Opepe Farm Trust holding an 80% shareholding. Contact holds comprehensive encumbrances over this third block. [158] Counsel for the Opepe Farm Trust submitted that as kaitiaki it is committed to the sustainable management and development of the Project area and beyond for 48

56 present and future generations 48. For the Trust, evidence was given by Mr Hall and Dr Severne. They told us of the relationship that the beneficiaries have with the area, citing their cultural and spiritual connection through whakapapa and the responsibilities this imposes on them as kaitiaki. [159] To satisfy these responsibilities, Counsel for the Trust lodged a set of amended conditions. These, in summary, included: (a) Specific recognition for Opepe principles. To: Ensure the protection of Tauhara Maunga which holds te mana me te Mauri o nga hapu o te Hikuwai ; Ensure the holistic cultural connection to the taonga tuku iho is maintained for current and future generations; Ensure sustainability of the geothermal resource and the environment; and Allow economic use of the resource in a form that demonstrates both local and national benefit while also providing for the Opepe principles; (b) Progressive abstraction of the main geothermal fluid take in accordance with a proposed Adaptive Management Plan; (c) An additional position on the Peer Review Panel for Opepe to appoint a representative, or alternatively that the hapu and land owning Maori Trusts appoint half of the representatives on the panel (proposed General Condition 1.1); (d) A reduction in the number of representatives on the Geothermal Kaitiaki Reference Group (proposed General Condition 2.1); (e) A Cultural 1.1(g)(iii)(m)); Monitoring Framework report (proposed General Condition (f) An area of land to be set aside by Contact, of an appropriate location and size (and provide shelter), to enable tangata whenua to continue to maintain their ancestral connection to their taonga (proposed General Condition 2.11); and 48 Opepe Farm Trust opening submission at 2, at [2]. 49

57 (g) A condition seeking a staged and reduced development of the proposal (proposed General Condition 10) 49. [160] It was unfortunate that the proposed amendments lodged on behalf of the Trust were received so late. Little time was given to the other parties, particularly Contact and the other Maori parties, to respond. None of the conditions were put to any witness in cross-examination. This was unsatisfactory as it meant that we have no evidence before us as to whether the requested changes could be accommodated, or whether they would be viable. [161] In his closing submission, Mr Robinson for Contact submitted that the Board should give little weight to the proposed changes in the absence of any evidence. We agree. [162] Mr Robinson also identified difficulties relating to the proposed changes, which included: The Opepe principles would be difficult to apply in practice because they are drafted in a high level of generality Mr Whata on behalf of the Tauhara Moana Trust, also opposed the inclusion of the Opepe principles as it would give preference to one particular group without consultation Mr Brockelsby, for the Regional Council, supported Mr Robinson s submission; There is no evidence as to the interrelationship between the Opepe principles and the hierarchy of purposes of the Discharge Strategy contained in the Conditions of Consent and which reflect the Objectives and Policies of the Regional Policy Statement; There is no evidence before us to support a staged development of the proposal or a reduction in the take. The effects of such a condition on the economic viability, and on the technical feasibility of utilising the resource in such a way, are unknown Mr Whata and Mr Brockelsby supported this submission; and The suggested changes to the membership of the Peer Review Panel, which would give Maori collectively a 50% representation, may undermine the Panel in its technical role. 49 Tauhara Moana Trust closing submission. 50

58 [163] These criticisms have merit. In the absence of any evidence to support the requested changes we cannot accept them, other than where agreed by the other parties. [164] Many of the concerns raised by the Opepe Farm Trust have been raised by nga hapu me nga ahu whenua o Tauhara. Prior to the close of the Hearing, all hapu and land Trusts apart from the Opepe Farm Trust, negotiated agreements with Contact to mitigate their cultural concerns and future economic development aspirations. We were told that the agreements included a clause, whereby Contact would not oppose any future resource consent application for geothermal development by any hapu or land Trust, provided the agreed separation provisions were adhered to. Mr Robinson, Counsel for Contact, also advised in his closing submission that these agreements would apply to the Opepe Farm Trust, if it takes advantage of the provisions offered to other hapu and land Trusts 50. [165] The General Conditions of consent were also amended to address Maori concerns about their kaitiaki responsibilities by an additional appointment of a Tauhara hapu representative to the Peer Review Panel, and the creation of the Geothermal Kaitiaki Reference Group. This, together with other amendments to the conditions, applies equally to the beneficiaries of the Opepe Farm Trust. [166] We acknowledge that the Opepe Farm Trust has the mandate to speak for its beneficiaries. Those beneficiaries whakapapa to the mana whenua hapu of Tauhara. The same mana whenua hapu of Tauhara have reached agreement with Contact to mitigate their concerns. The Trust is able to access the same arrangements. If the Trust s changes were accepted, they would be in a better position than the other Maori parties. This would be unfair. We find that the Opepe Farm Trust s concerns have been adequately addressed. [167] In summary, we conclude that the arrangements made between Contact and the Maori parties, and as reflected in the conditions of consent and Heads of Agreement address, to the extent possible within the framework of the Act, the concerns of Maori. [168] We note that while accords have been reached by Contact with many Maori interest groups, these accords do not undermine the ongoing claims that Maori have to their 50 Transcript at 222 and following. 51

59 geothermal taonga under the Treaty of Waitangi. Such Treaty issues are outside our jurisdiction. Effects on Sustainability of the Geothermal Resource [169] Contact may commit $1 billion 51 to develop the Tauhara resource, and needs to be confident of its sustainability. Contact has outlined its sustainability philosophies in a number of places. Its Sustainability Report for 2009 states: 52 To reflect the significance of the concept of sustainability across our entire business, the following definition is most relevant and applicable to Contact: Operating our business with a focus on the future. We will protect our environment for future generations and build a strong, profitable and safe business through relationships based on trust with all people we interact with. [170] To understand the sustainability of the resource under the proposed development regime, the Board needed to understand the broad nature of the resource, and we received useful evidence on this. Because of the indirect nature of evidence, knowledge of the field must always be incomplete, such that every successive well or measurement leads to a refinement of field concepts and models. [171] The Wairakei-Tauhara Geothermal System links the Tauhara and Wairakei Fields at an unknown depth. Pressure draw down at Wairakei has drawn in hot fluids at depth and some shallow recharge. The combination of shallow and deep draw down at Wairakei caused pressure reduction at Tauhara, especially to the north of Tauhara. There is evidence for an entirely separate upflow of hot fluid in the south of Tauhara, such that fluid flows, at least in the Waipahihi area, are not obviously affected by this historical draw down. [172] The stratigraphy of the Tauhara field is summarised in graphic form in Appendix The sequence is as follows: Magmatic heat source this is at a depth of 8 to 10 kilometres and underlies Wairakei, Tauhara, Rotokawa and a much wider area through the Taupo Volcanic Zone; 51 Zink EiC at [4.8]. 52 Kilty EiC at Exhibit page Rosenberg EiC Exhibit MDR6. 52

60 Greywacke basement these ancient marine meta-sediments were intersected 54 in well TH17 at a depth of 2 km and will be found at increasing depths towards the northwest of the field due to the spreading ( rifting ) environment, being part of a depression tens of kilometres wide 55. Fluids can flow through this via fractures, though the reservoir modelling by Professor O Sullivan 56 assumes that the deep (-3,500 mrl) heat flow in the Tauhara area is primarily by conduction through this greywacke rock rather than by convection via water circulating in fractures; Tahorakuri Formation, Wairakei Ignimbrite and Waiora Formation 57 these are a series of ignimbrites and rhyolites, interspersed with other rhyolite and andesite units. The Waiora Formation 58, in particular hosts a major geothermal production aquifer in the Wairakei-Tauhara Geothermal System; Huka Falls Formation 59 this consists of Upper, Middle and Lower units which in combination help to act as a leaky cap to the system and, while variable in thickness, extend to depths down to sea level. The Upper and Lower units are aquicludes while the Mid-Huka Falls unit acts as an aquifer, tapped by some of the shallow bores under Taupo township; and Oruanui Formation and Recent alluvium and tephra these are relatively shallow young strata that can host groundwaters and some hot water 60 tapped by shallow bores. [173] Some formations extend well beyond the boundaries of the system, including through Rotokawa. Boundaries of the system, at least at shallow levels, have been determined by geophysical methods, but can be fixed by rock-water interaction through the deposition of minerals and clays to effectively seal the margins. This deposition can seal major fractures, such as the Aratiatia 61 and Rotokawa 62 Faults, 54 Rosenberg EiC at [6.40]. 55 Rosenberg EiC at [6.17]. 56 Resource Consent Application Suite, Wairakei-Tauhara Modelling Report, Fig 3.14 and Rosenberg EiC at Exhibit Page Rosenberg EiC at [6.36]. 59 Rosenberg EiC at [6.35]. 60 Rosenberg EiC at [6.34]. 61 Rosenberg EiC at [6.23]. 62 Rosenberg EiC at [6.24]. 53

61 as evidenced by the lack of pressure connection between the Tauhara and Rotokawa Fields. [174] Fluid chemistry leads to further refinement of the understanding of fluid flow through the reservoirs. Overall subtleties are not discussed here, however, the chemistry clearly indicates a separate upflow and source 63 of Tauhara fluid compared with Wairakei or Rotokawa. They also show that the source temperature of the fluid exceeds 300 o C 64 and the recent drilling at Tauhara encountered temperatures of around 300 o C 65 in well TH12 in the northeast of the field and well TH10 in the south of the field. [175] The Tauhara field is seen as composed of the following sectors: Possibly two upflows 66, both in the vicinity of Mount Tauhara through structures untested by drilling, though some areas west of it have not been drilled deep enough to show temperature inversions, suggesting the upflows may be more expansive in nature. This hydrology is supported by high temperatures in the south of the field clearly independent of Wairakei. This is coupled with the recognition that some sectors are clearly affected by draw down from Wairakei, while other southern sectors linked to Waipahihi are relatively unaffected. Mr Bromley 67 opined that even the area in the south of the field near well TH10 has experienced about 14 bars of draw down; An unspecified deep connection between the Wairakei and Tauhara Fields, which from pressure measurements, is assumed by Mr Bixley 68 to be greater than 2000 m depth; An outflow towards Wairakei Field and Taupo township, with a connection to Wairakei Field 69 at about m depth, largely within the Waiora Formation. Pressures within this outflow have already been affected by the draw down at Wairakei Field with Mr Bromley 70 assuming a 17 bar pressure reduction. 63 Bromley EiC at [1.2]. 64 Bromley EiC at [3.9]. 65 Stanfield EiC, Tauhara II Geothermal Development Project, Project Description at Exhibit Page O Sullivan Response to Questions Figure MJO Extra 9.1 at Bromley Response to Questions at [2.4]. 68 Bixley EiC at [4.2]. 69 Rosenberg EiC at [6.11]. 70 Bromley EiC at Exhibit page 8. 54

62 There is no exact boundary between the Wairakei and Tauhara Fields 71 although for most purposes the Waikato River can be considered as a reasonable proxy; An outflow at least partly within the Crowbar Rhyolite at a depth of around 200 m 72 from the southern upflow towards the Waipahihi Springs and shore discharges in Lake Taupo; and Shallow outflows, especially through the mid-huka Falls Formation, under the town partly accessed by some shallow bore users, the draw down of which is contributing to the development of some subsidence bowls. Outflows in the vicinity of the Spa Sights have now been replaced with cold recharge of the reservoir from the surface 73. [176] Boundaries and characteristics of this system have been ascertained by scientists and engineers over 60 years. The recent drilling program has further defined the characteristics of the Tauhara Field, including the shallow resources available to, and used by, the local population. All of this information has been condensed into a numerical reservoir simulation model under the direction of Professor O Sullivan. We notice that no one has directly challenged inputs to this model or its conclusions in its latest version, and that the model has been the subject of external review and consequent revision over its many years of development. [177] Professor O Sullivan s model drew on the significant amount of information obtained from geoscience, drilling, well testing and development over a period of 60 years for both the Wairakei and Tauhara Fields, and also drew on some information for the Rotokawa Field. The model was calibrated to approximately match the natural state before any development. It was then further calibrated to ensure that temperatures and pressures approximately match the current state of the combined fields, now that they have been subject to development. [178] Professor O Sullivan recognises some weaknesses of the model, particularly with respect to its poor match to shallow conditions and therefore its weakness in terms of modelling subsidence. However, as an overall model assessing energy available in the reservoir, because of the extent of calibration possible due to the interaction 71 Bixley EiC at [4.2]. 72 Bromley Response to Questions at [2.5]. 73 Bixley EiC at Exhibit page 9. 55

63 between Wairakei and Tauhara Fields, the Board is satisfied that this is a model with powerful predictive ability. [179] There are still areas of uncertainty around the definition of the Tauhara Field, especially in the south. Mr Bromley has given a measure of confidence in the field boundaries in the south and southeast. These have not been a focus for the Contact evidence as that was outside their area of land interest and possible development. The current boundaries are defined by resistivity measurements, coupled with extensions by the Regional Council to include warm springs in the Pueto Stream catchment 74. Magneto-telluric resistivity surveys, which are deeper penetrating, may define the top of a southern upflow and its outflow in this region. This type of survey may be of interest to Opepe Farm Trust. [180] We conclude from the reservoir modelling that a development in the order of 250 MWe should be sustainable for 50 years 75 with sensitivity calculations indicating only slightly reduced production is possible for at least 100 years 76. After that period, heat will still be available. Dr Grant 77 undertook a review for the Regional Council. He noted the sustainability of the project and the manner in which temperatures will decline. [181] Based on evidence, the resource appears to be large. It is therefore possible that other parties may choose to be investors in additional generation, or direct use, at some future time. [182] As we have said, should a geothermal resource be developed and its aquifers depleted, then resting of the field will eventually see it return to a state similar to its undeveloped state, through a combination of conduction and convection, from the bottom up. The evidence of Professor O Sullivan 78 was that the time for this restoration is a function of the ratio of extraction rate to natural through-flow or recharge. For the Wairakei-Tauhara Geothermal System he considered this would mean a recovery period of approximately seven times the operational period. We note that Mr Bromley told us that recovery of the production reservoir is likely to 74 Bromley EiC at [3.6]. 75 O Sullivan EiC at [1.7(a)]. 76 O Sullivan EiC at [9.38 and 9.39]. 77 Tauhara II Geothermal Development-Contact Energy Ltd, Key Issues Report by Waikato Regional Council, May 2010 at O Sullivan EiC at [9.43] 56

64 occur in a similar order to the time scale of depletion 79. In either case, the resource will be available for future generations. [183] Reinjection and injection have been specified for the proposed development, and we agree that such practice is useful for a range of reasons potentially including assisting the sustainability of the resource. We note that the evidence established that this is a useful means to control subsidence and to dispose of Separated Geothermal Water and condensate. The end result is that a large portion of the fluid (that which is not lost to atmosphere from the cooling towers or irrigated on to land) is being returned to the reservoir along with its residual heat. [184] We support an adaptive management approach to the development, recognising the need to adapt to the field as it responds to production and injection. An adaptive management approach locked into conditions ensures that the field can be managed in an efficient manner. [185] We find that the proposed development is sustainable, based especially on the evidence presented by Professor O Sullivan. Efficient Use of the Resource [186] Mr Thain challenged Contact s past performance in the area of use of efficient plant 80, in that Contact has consents for the Te Mihi project, which could eventually replace the less efficient Wairakei Station, while generating more electricity from the same fluid take. Mr Thain s concerns require us to consider two matters: Contact s failure to utilise its existing consents more efficiently; and Thermodynamic efficiency. [187] The granting of consents places no obligation on the consent holder for immediate implementation, and a range of factors will influence that implementation decision, and the timing to invest. Contact advised 81 that it has called international tenders for plant construction with a view to a decision on investment by the end of We 79 EiC [4.2] 80 Thain EiC at [3]. 81 Kilty Rebuttal at [3.3], Robinson closing submission at [2.2]. 57

65 have no jurisdiction, in this case, to direct Contact on its management of the Wairakei Field, or when it implements other existing consents. [188] Mr Thain s concern relating to thermodynamic efficiency was that converting geothermal energy to electricity is relatively low at the Wairakei Station because of its outdated infrastructure. He also considered that direct use heating was a more efficient use of the resource. [189] Addressing the first issue, Contact has applied for consents to take and reinject fluid. It proposes a double flash configuration which will ensure a higher level of efficiency than for single flash. While the efficiency will depend on the plant selected, we are satisfied on the evidence that the double flash technology is efficient. [190] Addressing the second issue we accept that direct use of the resource for heating is more efficient than generating electricity. However, we recognise that there is a need for renewable electricity generation, and that the Tauhara resource is a prime opportunity for low cost electricity generation of this type. Contact 82 has indicated that direct uses are part of their application. Opportunities for this can be assisted by the intended installation of pipes for the shallow targeted reinjection. [191] We find that the proposal is an efficient use of the Tauhara Field. Effects on Other Users of the Geothermal Resource Bore Owners [192] There may be several hundred 83 owners of shallow geothermal bores within Taupo. Some of these are commercial (swimming pools, hotels etc) but the majority are residential. Many of these bores are unregistered, partly for historical reasons. [193] Twenty seven submissions raised concerns about the potential for Contact s proposed take and reinjection to adversely affect existing takes. These submissions were wide ranging and came from local domestic and commercial users. These submissions reflect the diversity of other users of the Tauhara Field. 82 Robinson closing submission at [2.4]. 83 Stephenson EiC at [8.14]. 58

66 [194] The Tauhara II Development is expected to change the aquifers that the proposal would tap and consequential changes to adjoining aquifers. There may be effects around some domestic and commercial bores. [195] The evidence 84 established that adverse effects on shallow bore users can be adequately managed. The draft conditions of consent, as notified, proposed that Contact would remediate any bore user, subject to signing an agreement, for damage arising as a consequence of the development. The submissions raised two issues: Causation; and Timing. [196] As for causation, submitters were concerned that the onus should be on Contact to establish that its activities are not the cause of any adverse effect. Contact has addressed this concern with General Condition 4.29(d) of Volume 2, which now states that Contact is only absolved of responsibility if It is clear that the adverse effect is not due to the operation of the Tauhara II Power Station. [197] As for timing, the General Conditions of consent 85 as lodged give existing bore holders until 31 December 2010 to register with the Regional Council their bores providing the following information: The name and address of the bore owner; The condition of the bore(s); The existing level of use, what the output from the bore is actually used for and the heat energy output range which the bore operates ((b) and (c) together the baseline position ); and Confirmation (with details) that the use advised is occurring in accordance with the Act. [198] The submitters concern was the registration date of 31 December This is of particular concern as, due to a mistake, the Regional Council does not have a registry of bore holders and consequently those not registered are currently deemed to be illegal. Mr Brockelsby, for the Regional Council, told us that for those that register, the Council would waive any irregularity. 84 Stephenson EiC at [8.15]. 85 General Condition

67 [199] We consider that further time should be allowed for shallow bore holders to register with Council and thus come within the compensatory provisions of the General Conditions. We fix the date at 30 September 2011 and General Condition 4.24 is amended accordingly. The following consequential amendments are made to General Conditions 4.24 and 4.26: deleting 31 January 2011 and substituting 31 October 2011 ; deleting 31 December 2010 and substituting 30 September 2011 ; and deleting 31 March 2011 and substituting 31 December Effects on Maori Commercial Interests [200] We are aware from the evidence that local Maori hapu and commercial land trusts have an interest in geothermal development. As an example, Opepe Farm Trust has commissioned reports 86 on the geothermal resource under their land, though it is not clear that concepts have been developed beyond that. In some cases Maori commercial interests may be in partnership with others, while some may seek independent developments. Through the process of this Inquiry, many of the interested Maori parties have reached accords with Contact, suggesting that commercial and wider concerns have been addressed. [201] We have already referred to Opepe Farm Trust s multiple land interests, including sole unfettered interests in land to the south of Tauhara Maunga, which is in the vicinity of the postulated southern upflow and its associated outflow. Our assessment of the evidence suggests that the resource can sustain this proposal for at least 50 years and potentially for 100 years. There may well be opportunity for other developments. Effects on Users of Neighbouring Assets and Infrastructure Aratiatia Dam [202] The Aratiatia hydro dam and associated power station are located on the Waikato River. The Contact consent area boundary is 200 m from the dam itself and 500 m 86 Dr Severne, Transcript 21 September 2010 at 139, Lines

68 from the Aratiatia Power House. The dam and power station are operated by Mighty River Power. [203] Mighty River lodged a submission opposing the proposal. It cited concerns around the potential for shallow and deep reinjection/injection creating possible adverse effects on the Aratiatia dam and facilities from changes in ground level and induced seismic activity. [204] On 7 September 2010 Mighty River formally advised that it and Contact had agreed a set of consent conditions that addressed its concerns. Rotokawa Joint Venture [205] Rotokawa Joint Venture operates a geothermal power station on the Rotokawa Geothermal Field. This field is located northeast of the northern areas of the Tauhara Field, and the two field resistivity boundaries come within a few hundred metres of each other at their closest point. [206] Rotokawa Joint Venture lodged a submission opposing the proposal. It was concerned about possible adverse effects on its activities and assets, and effects on others arising from: Reinjection/injection close to the Rotokawa Geothermal System boundary; Cumulative effects of hydrogen sulphide emissions (i.e. odour complaints being wrongly attributed to Rotokawa Joint Venture activities); and Ground subsidence, including subsidence complaints being wrongly attributed to Rotokawa Joint Venture activities. [207] By memorandum dated 9 September 2010 Rotokawa Joint Venture formally advised that the parties had agreed a set of consent conditions that addressed its concerns. Effects of Subsidence [208] Evidence was presented about differential ground subsidence from several witnesses. From Contact these included Mr Stanfield, Mr Stephenson, Dr Dunstall, Mr Rosenberg, Mr Bixley, Professor Horne, Professor O Sullivan, Mr Currie, Professor Pender, Mr Bromley, Dr Allis, Mr Booth, Mr Beattie and Mr Daysh. 61

69 Submissions expressing concern about the effects of differential ground subsidence were made by, among others, Mr Hickman for the District Council, Mr Waters and Mr Clarke. Mr Bromley and Dr Allis answered questions we put about differential subsidence and targeted injection intended to control it. Contact s subsidence programme [209] As a consequence of earlier consents, Contact was required to investigate the magnitude and cause of ground subsidence, especially differential subsidence, in the Taupo area. This has resulted in a comprehensive, multi-disciplined programme of ground and building surveys and extensive drilling. The technical evidence presented by participants in the programme is of very high quality and has assisted us. The subsidence bowls [210] The results of successive comprehensive ground and building level surveys, both vertical and horizontal, in the Wairakei, Tauhara, Aratiatia and Taupo areas were produced in evidence by Mr Currie. These surveys identified four subsidence bowls whose occurrence is not in dispute. These are referred to as the Wairakei, Spa, Rakaunui and Crown Road bowls. The Wairakei bowl was the first one identified and has been deepening for many years but the other three bowls have developed more recently. [211] We accept Mr Currie s evidence that the bowls have not widened recently and that their rates of subsidence, except for that of the Spa bowl, have declined. The rate of subsidence at the Spa Bowl has been consistent since [212] Contact has considered whether or not there may be other bowls present and so has had INSAR satellite imagery surveys undertaken 88. These images have not highlighted any additional areas of subsidence. [213] Undisputed evidence demonstrated that the subsidence bowls formed as a result of loss of pore pressure support, that was itself caused by water draw down in the reservoir, as a consequence of over 50 years of withdrawing fluid from the Wairakei- 87 EiC at [1.4] 88 Tauhara Stage II Geothermal Project: Subsidence Report at 27,

70 Tauhara Geothermal System. The resulting loss of pressure has caused preferential compression of some thin soft units that has been transmitted to the surface. [214] The detailed evidence of Mr Booth and Mr Beattie addressed ground settlement and potential damage to structures from differential subsidence. The overall consequences of subsidence are regarded as being minor and mainly confined to the Wairakei Hotel and the kerb and pavement damage in the Crown Road area 89. We accept this conclusion and note that, in any case, there are compensatory provisions for any future damage that may be caused. [215] The extensive drilling programme undertaken is summarised in the evidence of Dr Dunstall. About 4,000 m of cores were recovered from 13 drill holes, photographed, described and processed 90. The progress and conclusions of the investigation programme were reviewed and commented upon by expert reviewers with international reputations. The results greatly improved knowledge of the geology and hydrology of the Tauhara Field and they also revealed the cause of subsidence, a matter previously uncertain and disputed. [216] We agree with Dr Allis 91 that the GNS report is a world-class case study and in our opinion this investigation is probably the most detailed and comprehensive ever undertaken of induced ground subsidence in a geothermal environment. [217] We also agree with the comment of Dr Allis 92 that the cores now preserved by Contact represent a significant resource for future research projects. We go even further to say, that the results of the drilling will reveal important information about the early history of the Taupo Volcanic Zone itself and the evolution of geothermal systems generally. Predicting and modelling subsidence [218] We accept Mr Rosenberg s evidence that predicting the magnitudes, locations, dimensions and formation of subsidence bowls requires understanding the stratigraphy, lithology and physical properties of the subsurface rock formations Booth EiC at [12.25]. 90 EiC at [1.7]. 91 EiC at [4.2]. 92 EiC at [4.2]. 93 EiC at [4.1]. 63

71 [219] The stratigraphy of the Tauhara Field is described in detail in the evidence of Mr Rosenberg. This formed the basis for other evidence addressing the issue of differential ground subsidence. Professor Pender s evidence was very helpful in explaining the immediate cause of subsidence whereby compression of altered rocks reduced pore pressure support from water loss. We note his conclusion, that based upon his study, injecting fluid into a subsidence bowl to attain a full pressure recovery would not allow the receiving formation to inflate by more than 20% 94. [220] A weakness with the assessment is that despite continuous coring to sample rock matrix, some formations within the subsidence bowls are very weak 95 so core recovery is necessarily incomplete. Unfortunately these are the very formations most likely to be affected by dewatering. [221] Based upon Professor Pender s measurements 96 of 153 high quality samples, both Mr Bromley and Professor O Sullivan attempted to address subsidence quantitatively. Modelling of subsidence in such detail in a geothermal system has not been attempted elsewhere so far as we know. The method Professor O Sullivan used shows considerable promise for future monitoring and predicting the rates and magnitudes of subsidence. However, as Professor O Sullivan pointed out, that although he predicts the maximum amount of subsidence for the Rakaunui and Spa bowls, his modelling is unable to predict accurately the rates of subsidence. The modelling does not predict a rate of subsidence for the Crown Road bowl that is presently matched by survey measurements. [222] Professor O Sullivan s model is primarily intended to model reservoir response to exploitation and has an admittedly poor response to matching shallow pressures which are the cause of subsidence. For this to be an effective technique the modelling may need to focus on shallow levels. [223] Never the less we recognise that subsidence modelling is a work in progress and expect that the accuracy of predictions would improve if more measurements are made. 94 EiC at [1.15.] 95 Pender, EiC at [10.5]. 96 EiC at [1.3]. 64

72 [224] Mr Bromley made one dimensional models of subsidence, assuming targeted injection, using the results of Professor Pender s measurements. He predicted maximum additional subsidence values for the Rakaunui, Spa and Crown Road bowls of 0.8, 0.5 and 0.56 m respectively 97, together with a qualitative comment on whether these values were likely to be under or over estimates. Spa and Rakaunui Bowls [225] Evidence reporting the results of the comprehensive subsidence study undertaken shows that the cause of subsidence within these two bowls is due to the collapse of units within the deep Huka Falls Formation 98. In the case of the Spa bowl this is a fine sandstone-siltstone sub-unit from 140 to 165 m depth. In both bowls the collapsing horizons are now at least partly steam filled 99 but some of the shallower pressures measured are of liquid and lie on the pressure trend of the aquifer in the Waiora Formation 100. [226] This being the case, we accept the evidence presented, that maintaining, or even increasing, the deep reservoir pressure across the entire Wairakei-Tauhara Geothermal System should reduce the rate of ground subsidence at the Spa, Rakaunui and Wairakei bowls. This is indeed already happening. [227] We agree with the concept of trigger levels in general for implementing injection schemes and, in particular, with the trigger levels suggested 101 by Mr Bromley for the Spa and Rakaunui Bowls. Crown Road Bowl [228] This bowl has been the subject of detailed study since 2001 and Mr Currie, for example, reports that it has been levelled 19 times since then with a high degree of precision 102. Since 2004, as a result of the work of the District Council, the Crown Road network has been expanded to 3 km Bromley EiC at [6.38]. 98 Bromley EiC at [6.7]. 99 Bromley EiC at [6.8]; Grant report at Grant report at EiC at [7.2, 7.4, 7.5]. 102 EiC at [4.22]. 103 EiC at [4.12]. 65

73 [229] We accept the evidence of Mr Bromley, Mr Rosenberg, Dr Allis and Dr Grant 104 that the cause of subsidence of the Crown Road bowl differs from that of the Spa and Rakaunui bowls. We note no subsidence in the Crown Road bowl originates below a depth of 200 m 105 i.e. above the deep Waiora Aquifer. [230] The shallow aquifer at Crown Road is perched and thus not directly connected to the deep aquifer. The alteration of the Crown hydrothermal eruption breccia in the bowl was produced by steam condensate 106. Evidence presented 107 demonstrated that this altered breccia is compressing, whereas at the other subsidence bowls it is the deeper mid Huka Falls Formation that is compressing. [231] Since the Crown Road bowl hosts a perched aquifer, then we agree with evidence presented by Dr Grant 108 which predicts that pressure changes in the deep reservoir will have no immediate effect on those in the Crown Road bowl itself. Raising the deep pressure would reduce neither the magnitude nor the rate of ground subsidence of this bowl. Reinjection and Injection to control subsidence of the Crown Road Bowl [232] As a consequence of the considerable information obtained over recent years from exploration, Contact proposed that subsidence be managed by targeted injection 109 to depths below about the base of the hydrothermal eruption breccia (about +300 m). If this is not successful then Mr Bromley recommends that fluid be injected into the Crown Road bowl at depths between 50 and 70 m below ground surface 110. The trigger subsidence rate at which injection would be undertaken at this bowl would be if the maximum subsidence rate exceeded 50 to 60 mm per year 111. However because, as Mr Bromley 112 points out, the maximum rate of subsidence at Crown Road bowl is declining no injection may be required to slow the subsidence. 104 Tauhara II Geothermal Development-Contact Energy Ltd, Key Issues Report by Waikato Regional Council, May Bromley EiC at [6.7]. 106 Rosenberg EiC at [8.36]. 107 Pender EiC at [13.2]. 108 Tauhara II Geothermal Development-Contact Energy Ltd, Key Issues Report by Waikato Regional Council, May 2010 at For example Bromley EiC at [6.4]. 110 EiC at [7.6]. 111 EiC at [7.2]. 112 EiC at [6.43]. 66

74 [233] We recognise that generally reinjection and/or injection have been successful in slowing the rate of differential ground subsidence as well as being a good system management practice to sustain a resource. We accept the evidence that deeper targeted injection will reduce the rates of subsidence at the Wairakei, Spa and Rakaunui bowls. [234] Never the less we have some reservations about the merit of shallow injection into the Crown Road bowl and regard this as a procedure to be used only after careful consideration. Our reasons for this concern are: 1. From the evidence of Dr Grant It is not clear that subsidence in this area can be controlled by shallow injection Reinjection into a steam/water zone will cause the steam there to condense and lower the surrounding pressure, at least initially. There would thus likely be a loss of pore support in the compressing formation (Crown hydrothermal eruption breccia) 114 since the rocks comprising this formation have been altered by steam condensate to kaolin. The presence of this mineral means that the rocks subject to injection are unlikely to reinflate when the pressure resulting from reinjection eventually increases i.e. what pore space remained within the breccia will be lost permanently. 3. The fate of the injected water is not entirely predictable, although we accept that Contact would establish a comprehensive monitoring programme, and the maximum amount of water that would be injected would only be about 1000 tonnes per day 115 at a temperature of less than 40 0 C. Even so, either the injected, or more likely, ground water displaced by it, could discharge at the surface as far as several hundred metres away. We are conscious that Dr Dunstall 116 stated that injection would be controlled so closely that this would not happen; 4. Should the diameter of the Crown Road bowl increase notably, however, then we accept that very carefully targeted shallow reinjection may become an option to be considered by the Peer Review Panel; and 113 Grant report at Rosenberg EiC at [8.36]. 115 Dunstall at [14.5]. 116 EiC at [14.5]. 67

75 5. Our view is that the Peer Review Panel should look carefully to address the effects of differential subsidence and whether there are other forms of mitigation that could be considered. [235] Notwithstanding our concerns, we consider the adaptive management regime, which is subject to the Peer Review Panel s considerations, is the appropriate method to address the issue. [236] We asked Dr Allis about the effect of injecting water into a steam zone, to which he replied that this is warranted where compaction is occurring 117 and that in his opinion the initial loss of pressure due to condensation would be quickly compensated for by a pressure increase. 118 Dr Allis quoted Dr Karsten Pruess 119 to the effect that there is a theoretical basis for expecting that injection will at least reduce subsidence rates although we feel this situation may not necessarily apply to the Crown Road bowl where the shallow aquifer is perched. [237] In answer to a written question from the Board 120, Mr Bromley accepted that some adverse effects may result from targeted shallow reinjection into the Crown Road bowl, but said this issue is best addressed through the constraints he recommends which are included in the Discharge Strategy. We agree. Potential for new bowls to form [238] As there are a large number of survey stations and frequent surveys are planned, we accept the evidence of Mr Bromley 121 that other subsidence bowls will not form without being noticed. However as subsidence is related to dewatering, the most likely exception to this is in the southern part of the consent application area where Wairakei pressures have not been transmitted 122. This may mean either that the pressure decline in the reservoir initiating at the Wairakei Field about 50 years ago has not yet reached south of Mount Tauhara, or that this part of the Wairakei- Tauhara Geothermal System is fed from a separate upflow. 117 Allis at [1.1] in answer to written questions. 118 Allis at [1.1] in answer to written questions. 119 Allis at [1.4] in answer to written questions. 120 EiC at 9, at [3.6] and at [3.7]. 121 EiC at [6.25]. 122 Allis EiC at [5.1]. 68

76 [239] In either case it is important to monitor ground deformation with the object of detecting an early sign of the formation of a subsidence bowl in southern Tauhara. This will require continued diligence by the Peer Review Panel. Potential widening of subsidence bowls [240] We heard evidence, most importantly from Mr Currie, that none of the subsidence bowls has widened appreciably since they were first recognised. This observation has been important in deducing that subsidence is largely lithologically controlled and in addressing its consequences. In particular, Mr Bromley and Mr Rosenberg gave evidence that the Crown hydrothermal eruption breccia, which is the main compressing formation in the Crown Road bowl, has a funnel shape outside of which there has been no differential subsidence. [241] In answer to written questions from the Board 123, Mr Bromley stated that Crown Road bowl will not widen either with or without targeted shallow reinjection 124 whatever is the future subsidence rate 125 of this bowl. We accept these answers but believe that the diameter of the subsidence bowls should be measured, as required in the consent conditions, and as recommended by the Peer Review Panel. Changing the pressure target [242] A present consent condition specifies a pressure target in the deep reservoir intended to minimise ground subsidence. Contact is required to achieve a pressure of 56 barg at a depth of -400 m within the Waiora aquifer in wells TH1 and TH3 by August This pressure was to be attained by deep injection or reinjection. However, both Mr Bixley 126 and Dr Grant 127 judged that this goal is unlikely to be attained by the stated date. [243] Mr Bixley further pointed out 128 that both these wells were drilled many years ago and that their casings are corroded, although not to the extent of this being a well 123 EiC at [4.1]. 124 EiC at [4.2]. 125 EiC at [4.3]. 126 Answer to written questions at [1.15]. 127 Answer to written questions. 128 Answer to written questions at [1.5] and [1.8]. 69

77 security issue 129. Wells TH1 and TH3 were chosen as pressure monitor wells because they are close to the margin of the Taupo township. [244] We agree with Dr Allis 130, that there is no particular significance about the 56 barg pressure value. We accept that the same purpose can be achieved by monitoring an equivalent pressure in the same aquifer at shallower depths in other wells. We accept the evidence of Mr Bromley, Mr Bixley and Dr Grant, that wells drilled more recently now offer better opportunities to monitor pressure in the deep reservoir close to the areas of concern. The proposed conditions seek that the monitor pressure in THM16 be 22.2 barg at sea level and in THM17 it be 10.5 barg at +144m depth 131. [245] We agree that wells THM16 and THM17 should serve as good monitor wells in place of TH1 and TH3, as the lateral pressure gradient between THM16 and TH1 is slight and both THM16 and THM17 are closer to Taupo township. THM16 is better located for measuring pressure to monitor subsidence than either TH1 or TH3. [246] We noted that Dr Grant and Mr Bromley suggested different monitor target pressures for THM16 but the 2 bar difference is more apparent than real. As a result of Dr Grant s letter submitted in reply to a written question from the Board we agree that the target pressure in THM16 should be 22.2 ± 1.0 barg, as recommended in the evidence of Mr Bixley 132. We accept that pressure measurements may be in error by up to 1.0 bar 133. [247] No technical evidence was submitted in opposition to the proposed monitoring plan, nor indeed to Contact s technical evidence about the cause of differential ground subsidence and its effects. However, we recognise the concern of the District Council and others about the effects of differential subsidence 134 and the requirement that Taupo town be adequately protected by consent conditions. This position was confirmed by Mr Hickman in answer to a question from Judge Whiting Answer to written questions at [1.5] and [1.8]. 130 EiC at [5.2]. 131 Bixley EiC at [7.19]. 132 EiC at [7.16]. 133 Bixley EiC at [7.19]. 134 For example closing submission of Mr Hickman at 6 and Transcript of 6 October

78 [248] Under the adaptive management plan, the Peer Review Panel has the ability to alter this pressure monitoring requirement during the life of this consent in order to address issues of differential ground subsidence. Potential for hydrothermal eruptions [249] The potential for hydrothermal eruptions was given in the evidence of Mr Bromley 136 and is described more fully in the excellent Tauhara Stage II Geothermal Project Geoscience Report 137. Hydrothermal eruptions occurred in the Broadlands Road Thermal Reserve in 1974 and 1981 (Pony Club eruptions). A small eruption occurred in 1974 in the Spa Park thermal area 138 and clearly a larger one occurred in the Crown Road area in prehistoric times. [250] The evidence of Mr Bromley 139 and the discussion in the Geoscience Report 140 indicates that the most likely locations for a future hydrothermal eruption are from features now thermally active or dormant such, as those in the Broadlands Road Thermal Reserve. However, as the magnitude of heat flow in the Tauhara area has been declining 141 for the past few years, Mr Bromley thinks that the potential for further eruptions has also declined and would be reduced further with reinjection should consent be granted. [251] In this regard we note that production at Wairakei resulted in a net increase in heat output at Tauhara from about 100 MWt to 200 MWt between 1960 and 1980 followed by a gradual decline to about 85 MWt this year 142. In addition, Professor O Sullivan s reservoir model 143 predicts a further decline in heat flow before a slow recovery to present levels. In any case, the risk of hydrothermal eruptions can be assessed by regular monitoring of active and dormant manifestations. [252] We considered the possibility that some of the injected water could pond upon a less permeable unit at the base of the perched aquifer, become heated by conduction or ascending steam and generate a small hydrothermal eruption. In 136 EiC at [8.6]. 137 At Geoscience Report at [ ]. 139 EiC at [8.6]. 140 At [8.7]. 141 At [8.7]. 142 Geoscience Report at 249, at [8.42]. 143 O Sullivan EiC at Exhibit page

79 answer to a written question about this possibility, Mr Bromley 144 replied that this is possible but unlikely and confirmed that the risk could be managed. He thus confirmed the conclusions in the Geoscience Report that such a hydrothermal eruption would be limited in size and duration 145. We accept Mr Bromley s evidence that the Discharge Strategy will achieve this purpose. Possible discharge of thermal water into the Waikato River [253] Mr Bromley in his evidence commented 146 upon the possibility that should water be reinjected into the Spa bowl some water may discharge at the surface and restore thermal activity at Spa Sights. He would view this as a positive outcome. This was quantified by Professor O Sullivan in response to written questions 147. He concluded that without the Tauhara II development up to 20 MWt may eventually discharge from Spa Sights. With Tauhara II this is likely to be significantly lower. [254] We agree that restoration of some thermal features in the Spa Sights thermal area would be an attractive outcome and is favoured by Maori interests. However, most likely the initial water discharged would be that displaced from the shallow aquifer by entry of reinjected water but, in due course, reinjected separated geothermal water itself may discharge. We are not in favour of there being an uncontrolled indirect discharge of thermal water into the Waikato River. But as Mr Bromley pointed out in answer to our written question 148, a judgment call would then have to be made between the benefits from the restoration of hot spring discharges as against the consequences of additional chemical loading upon the Waikato River. Waipahihi Springs [255] The present state of thermal features in the Tauhara Field is well described in the Geoscience Report, as is a summary of the changes they have undergone since production began at Wairakei 149. [256] There has been a change in the temperatures and flow rates since 1987 at the Otumuheke, AC, Kathleen and Waipahihi springs. These springs all discharged 144 EiC at [1.10]. 145 At [8.7iii]. 146 EiC at [8.5]. 147 O Sullivan in answer to written questions, Figure MJO Extra 14.1, page Answer to written questions at [4.1]. 149 At [8.4.1]. 72

80 thermal water (as opposed to steam) but only the Waipahihi and Otumuheke springs do so now. The Waipahihi springs have a component of deeply derived chloride water and maintaining their flow and temperature is essential. [257] We heard evidence about the significance and importance of the Waipahihi Springs, especially to Maori and other local users such as Taupo DeBretts. Ms Jenkins for the Department of Conservation 150 drew attention to the geothermal vegetation of particular note that grows in the Waipahihi Stream Conservation Area. [258] These concerns have been met by agreements between Contact and parties likely to be affected and are incorporated into consent conditions. We accept that these include conditions sufficient to monitor discharges from the springs. We agree with Mr Bromley that the trigger for injection be based upon a combination of the flow rate of the springs and their chloride contents 151. Effects on Groundwater [259] Contact seeks consent to reinject/inject up to 194 kilotonnes/day of water including geothermal water, steam water, cooling water blowdown, suspended material and added chemicals and tracers into land and underground water through reinjection/injection wells within the consent area. They also seek to discharge up to 6,500 tonnes/day of cooling water blowdown and steam water condensate onto or into land by irrigation in the consent area. [260] A number of submitters expressed concern about the effect of these water discharges on: The reticulated water supply network; The quality of ground water for domestic and stock use; and Freshwater bores. [261] The conditions of consent, which include the Discharge Strategy, address the submitters concerns. The conditions addressing this issue have been iteratively changed through the facilitation and consultation process. Consequently, the 150 EiC at [4.9]. 151 EiC at [9.11]. 73

81 concerns of the submitters have been met and accordingly we received no submissions or evidence at the Hearing challenging the conditions of consent. [262] We read the evidence of the expert witnesses called by Contact who address this issue. In the absence of any evidence to the contrary we accept that evidence, and find that the detailed monitoring required by the conditions of consent and the Discharge Strategy adequately address the issue. [263] Our only concern is with respect to the cooling tower sludge which may contain up to 900 mg/kg of mercury 152 and high concentrations of other metals. If it is proposed that the sludge is to be mixed with reinjection/injection fluid we alert the Peer Review Panel of our concern and would expect the matter to be addressed in the Discharge Strategy. Amenity Effects Visual Effects [264] A Landscape and Visual Assessment (LVA) 153 was prepared by Mr Lister. His report was peer reviewed by Mr McKenzie, a Landscape Architect 154, prior to the lodgement of the application. Key visual effects included: Physical effects of the civil engineering on landforms, surface geothermal features, surface hydrology, and vegetation; Landscape character and values associated with the existing landscape; Visual effects on nearby Mount Tauhara and Maunganamu, and on the Waikato River, which are identified in Plan Change 24 to the District Plan as Outstanding Natural Features; Visual effects of the development such as the new buildings associated with the power station which will be up to 38 m high and the vapour and steam plumes, on views from roads and other public places, nearby dwellings and private property, and from the walking track on Mount Tauhara; 152 Stanfield EiC Exhibit Page 121 and answer to written question from Mr Stanfield at [1.2]. 153 Lister EiC at Folder 8, Above Ground Effects Assessment Report, A 1 Landscape and Visual Assessment, Appendix 3, at

82 Cumulative effects of the project in conjunction with existing geothermal generation and transmission in the surrounding environment; and Temporary landscape and visual effects during construction. [265] Several submissions expressed concern regarding amenity, lighting, landscape and natural character effects. For iwi and hapu submitters, the visual effects were specifically related to Mount Tauhara. [266] Mitigation measures for the flexible elements of the project were incorporated in the Steamfield Design Protocol 155. [267] Mitigation measures for the fixed elements of the project included: Adopting recessive colours, matched to the landscape for the turbine hall, cooling towers and pipelines; Utilising excess spoil to form sculptured earth bunds to screen hard structures such as the power station, well pads, switchyard, separator stations and pipeline corridors; Extensive broad scale group planting and shelter blocks in strategic locations to provide both foreground and backdrops; Location of the power station away from viewing catchments, especially Taupo township; and Aligning the main pipeline corridor to fit the topography and minimise earthworks. [268] Wairakei Pastoral Limited commissioned a report from a lighting consultant, and following amended consent conditions 156 being accepted by Contact, withdrew its submission. [269] Submissions by Ngā Hapū o Tauhara, Tauhara Moana Trust and the Tauhara Middle 11 Trust raised concerns about the effect of the plumes on views of Mount Tauhara or from its summit. An Assessment of Emissions to Air report 157 was prepared by Dr Brady. A vertical plume may rise higher than Mount Tauhara in extreme atmospheric conditions and in instances of no wind. The power station is approximately 2.7 km from the summit, so in any conditions, even extreme, the plume would not extend 155 Daysh EiC at Consent Reference EPA 10/1.001, EPA 10/ Brady Vol. 6 EiC Tab 17, Exhibit One. 75

83 over the mountain. In 90% of the daylight hours the plume is likely to rise less than one third the height of the mountain and the plume prominence will be influenced by the backdrop of the sky. [270] In addition to vapour plumes, there will be potential plumes from steamfield discharges. Under normal operation there will be wisps from condensate traps on pipelines. Large plumes will occur infrequently during maintenance operations or power station outages, and from the power station in response to turbine trimming. [271] The existing environment in the vicinity of the proposed power station is characterised by a rural landscape and is somewhat elevated (110 m above Lake Taupo). The nearest affected dwelling is about 800 m away and the privately owned land in the vicinity is mostly lifestyle blocks. [272] Section 3.b of the District Plan sets out the objectives and policies for the Rural Environment. Objective 1 seeks to protect the existing amenity levels provided by Rural Environments. The Explanation to the Objective and Policies make it clear that policy iv recognises that the Rural Environment contains a wide range of resources that require the location of activities close to the resource. iv. Provide for a range of productive land use activities within the Rural Environment while ensuring any adverse effects are avoided, remedied or mitigated. [273] Objective 3b.2.2 and Policy 3b.2.2.iii focus on limiting the potential for subdivision in the Rural Environment to diminish the rural amenity or character value and increase urbanisation. Further subdivision within the vicinity of the proposed power station will be restricted and could lead to reverse sensitivity issues arising. The Explanation acknowledges that the Plan gives encouragement to electricity generation facilities on geothermal systems such as Wairakei-Tauhara. The Rural Environment is generally characterized by low density development, large open spaces and the use of productive land. [274] The wider environment contains other geothermal power stations and the Taupo Motorsport Park. The Landscape and Visual Assessment Report 158 details the careful design and landscaping of the fixed and flexible elements of the development. We acknowledge the scale of this project and that there would be a decrease of amenity 158 Lister EiC, Exhibit One. 76

84 value in the area and will be partially inconsistent with section 3b, Rural Environment of the District Plan. [275] The District Council submitted that provided the mitigation measures set out in the Landscape and Visual Assessment Report are implemented for the flexible elements of the project, the visual and landscape effects will be mitigated. These mitigation measures are reflected in the conditions of consent in Volume 2 of this decision. [276] There was no further evidence presented at the Hearing. [277] We find that the conditions of consent and the mitigation measures as set out in the Landscape and Visual Assessment Report would adequately avoid, remedy or mitigate actual and potential adverse effects on the visual and landscape values from the Tauhara II Project. Noise Effects [278] A technical report on noise effects by Mr M Hunt is part of the application 159. Mr Hunt also gave evidence. This report was peer reviewed. Key noise sources would comprise: Construction noise and 24 hour operation of a large power station; Central Tauhara first flash steam separation, SGW transfer pumps, two phase fluid gathering and reinjection pipelines to and from the production and reinjection wells, plus transfer pipeline(s) to convey SGW to the second flash separators in the steam separation area adjacent to the power plant; South Tauhara first flash steam separation, SGW transfer pumps and two phase fluid gathering and reinjection pipelines to and from the production and reinjection wells, plus pipeline(s) to convey SGW to the reinjection wells; Cross-country pipelines connecting the South and Central Tauhara Separator Plants to the power station; 159 Above Ground Effects Assessment Report, A2 Noise Assessment at

85 Well drilling, including well pad preparation, 24 hour drilling and flow testing, and other temporary works associated with establishing wellhead infrastructure. The exact number and location to be determined; and Cross-country SGW pipelines connecting the power station reinjection pumps to the north and east SGW reinjection areas, plus a possible site for south reinjection to achieve the desired distribution of SGW to the three reinjection/production locations. [279] The evidence confirmed that: Construction noise will comply with the relevant condition of the Tauhara I consent (in the area covered by the Tauhara I consent), and in the separate Tauhara II areas will comply with the New Zealand Construction Noise Standard, NZS6803:1999 Acoustics Construction Noise; and Operational noise from the Tauhara II Power Station will comply with the District Plan 160 noise limits for the rural area (including night time levels) at dwellings not located on the application site. [280] Noise from emergency steam venting cannot be effectively controlled by the application of general District Plan noise standards. Steam venting occurs during start up and occasionally at other times. Usually, steam venting occurs for a short time only, but on rare occasions may continue for an hour or so. Mr Hunt recommended that the best practicable option be adopted (in terms of section 16 of the Act) to address planned and unplanned steam venting noise. Condition 14 EPA 10/1.001 addresses this issue. [281] The District Council had the application peer reviewed by Mr Hegley, an Acoustic Engineer. That review identified some amendments to the conditions addressing noise from the project. The amendments require reference to the 2008 New Zealand Standard for Assessing and Measuring Environmental Noise. The conditions of consent now address the District Council s concerns. [282] Wairakei Pastoral raised an issue about noise from Tauhara II impacting on their dairying activities with particular reference to future dwellings. Mr Hunt did not 160 Local Authority Report Section 149G Resource Management Act, Contact Energy Limited Tauhara II, Taupo District Council, 14 May 2010, Rule 4b

86 consider that there would be any adverse effects on animals or farming generally as a result of Tauhara II development. The scale of noise effect that might be experienced on Wairakei Pastoral s land would, at worst, be no greater than the noise experienced in farms adjacent to highways. The concerns of Wairakei Pastoral have been addressed in the conditions of consent. [283] A number of submitters raised concerns regarding noise in a general sense. Mr Hunt addressed these in his report. The submitters concerns have been addressed in the conditions of consent. [284] We heard or received no evidence challenging the evidence of Mr Hunt. We find that the conditions of consent and the mitigation measures as set out in Volume 2 of this decision and the Steamfield Design Protocol would adequately avoid, remedy or mitigate actual and potential adverse effects of noise during the construction and operational period for the fixed and flexible elements from the Tauhara II Project. Traffic Effects and Management [285] A technical Transportation Assessment Report 161 and a Construction Traffic Management Plan 162 was prepared by Mr Harries. These documents set out the expected traffic types and volumes, and their likely routes and effects during both construction and operation of the power station and steamfield development. [286] Nine new vehicle access points 163 will be required to serve the construction and operation of the Tauhara II Project. The immediate point of access will be to the power station site from Off Road Highway, an existing private road off Broadlands Road, part of the District Council local road network. Four other access ways from Off Road Highway would accommodate traffic relating to the construction and ongoing servicing of pipelines, switchyard and well pads. An additional two access points are proposed for Broadlands Road and another two from State Highway Five (SH5), Napier-Taupo, to access pipelines and well pads. [287] Mitigation measures proposed: 161 Harries EiC Exhibit One. 162 Harries EiC Exhibit Two. 163 Vol 1, Contact Energy s Updated Proposed Conditions of Consent, 13 September 2010 at 44, Fig

87 Additional rehabilitation and carriageway widening on Off Road Highway to accommodate all construction and operational traffic as well as existing users, including construction of two sealed entranceways to District Council standards, to the power station and switchyard; Construction of the remaining seven new access ways (five on local roads and two on SH5) to relevant District Council and New Zealand Transport Agency standards; and The implementation of a Construction Traffic Management Plan as approved by the road controlling authorities, during construction to ensure all construction related traffic activities are appropriately managed to minimise any potential adverse effects on the surrounding environment. [288] Only three submissions expressed concern about traffic. NZ Transport Agency (NZTA), the District Council, and Tauhara Moana Trust submitted that provided the mitigation measures identified in the Transportation Assessment Report are recognised by consent conditions, including the use of the Construction Traffic Management Plan, the effects would be less than minor. [289] We find that the conditions of consent would adequately avoid, remedy or mitigate actual and potential adverse effects on traffic volumes and safety from the Tauhara II Project. Air Quality [290] A detailed technical report by Dr Brady 164, an Air Quality Specialist, assessed the application as a best practice approach based on modelling, the results of which had a high degree of certainty. This assessment was peer reviewed by Dr Graham 165, an Air Quality Specialist instructed by the Regional Council. Key air discharge concerns are: The increased discharge of hydrogen sulphide; and 164 Above Ground Effects Assessment Report at Tauhara II Geothermal Development-Contact Energy Ltd, Key Issues Report by Waikato Regional Council, May 2010 at

88 Other air contaminants (mercury, radon, ammonia and fluoride) from the power station and associated steamfield activities. [291] Several submissions expressed the following concerns: The cumulative effects of this development with existing and consented discharges of hydrogen sulphide; and Odour effects. [292] The Assessment of Emissions to Air Report contained an extensive set of modelling results covering the predicted effects of the Tauhara II Power Station (in both configurations) in isolation, and in combination with the Wairakei, Tauhara I, and Rotokawa Power Stations. The Report s assessment of hydrogen sulphide odour effects was based on predictions for 1-hour average concentrations, which were compared against the odour-based guideline of 70 µg/m 3. The results were reported as 99.9 percentile levels, which represents the 9 th highest value within a year of hourly results (i.e. 8,760 results). Detailed frequency distribution data was also presented for the following three selected locations in close proximity to the power station: Site 1: A lifestyle block on Centennial Drive, approximately 1.5 km west of the proposed power station; Site 2: A farmhouse on McKenzie Road 1.5 km northeast of the proposed power station. Site 3: The centre of the pit lane at the Taupo Motorsport Park, about 1km northwest of the proposed power station site. [293] The results concluded that the power station emissions, in isolation, are likely to have less than minor effects 166. [294] The modelling results for the potential cumulative effects of the Tauhara I and the Rotokawa Power Stations showed some significant increases in the expected 166 Tauhara II Geothermal Development-Contact Energy Ltd, Key Issues Report by Waikato Regional Council, May 2010 at

89 emission and transient emission rate but still the potential odour impacts were considered to be less than minor 167. [295] The Assessment of Emissions to Air Report identified the potential for cumulative effects with other power stations. This was not expected to lead to any significant level of odour complaints, but Dr Graham observed that H 2 S odours would become more noticeable in the area, as a result of the multiple power station impacts. [296] Hydrogen sulphide has health side effects if inhaled in significant concentrations. The Assessment of Emissions to Air Report confirmed that the concentrations are well below levels to cause health effects, even allowing for the cumulative effects from other sources. [297] The potential effects from other contaminants, including mercury and ammonia, were considered to be well below the Ministry for the Environment Ambient Air Quality Guideline and the Ontario Ambient Air Quality Criteria used in the Assessment of Emissions to Air for the Tauhara Stage II Geothermal Project 168, respectively, and therefore the potential effects would be less than minor. [298] The potential spray drift effects from the wet cooling towers were part of the Assessment of Emissions to Air Report 169 and were found to have less than minor potential and actual effects on the surrounding environment. The only minor uncertainty was the exact composition of the biocides to be used for the treatment of the cooling tower water. [299] It is expected that the biocide to be used would have the same composition as at the Poihipi Power Station where the active ingredients are sodium bromide and hypochlorite. The total droplet deposition rate of mm per day would fall within a few metres of the towers and would have effects that would be less than minor. [300] On a positive note we acknowledge Tauhara II will result in a net reduction of CO 2 emissions when compared to electricity generation using fossil fuels. We accept that in isolation the potential impact from air discharge of H 2 S from the power station would be less than minor for either station configuration. 167 Tauhara II Geothermal Development-Contact Energy Ltd, Key Issues Report by Waikato Regional Council, May 2010 at Assessment of Emissions to Air for the Tauhara Stage II Geothermal Project pages 9 and EiC page 82 and

90 [301] We acknowledge that there would be an increase of H 2 S when the cumulative effects of all the geothermal power stations are taken into account within the Taupo area. An ongoing ambient monitoring programme is accordingly necessary. Dr Graham, suggested a number of changes to the conditions of consent to address the Regional Council and submitters concerns. These have been incorporated into the conditions of consent. [302] We find that the conditions of consent and the mitigation measures would adequately avoid, remedy or mitigate actual and potential adverse effects from the air discharge from the Tauhara II Project. 83

91 CONSIDERATION OF STATUTORY INSTRUMENTS [303] Subject to Part 2, we are required to have regard to the relevant provisions of the relevant statutory instruments. They are: Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 National Policy Statement on Electricity Transmission National Environmental Standards for Electricity Transmission Waikato Regional Policy Statement Proposed Waikato Regional Policy Statement Waikato Regional Plan Taupo District Plan Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 [304] The Act received the royal assent on 7 May By Order in Council various provisions of the Act came into force on 24 September As a consequence the Vision and Strategy for the Waikato River (Schedule 2 of the Act) is deemed to be incorporated into the Waikato Regional Policy Statement. Section 17 of the Act provides that RMA decision makers are required to have particular regard to the Vision and Strategy in relation to applications affecting the Waikato River or its catchment. [305] The focus of the Vision and Strategy is on restoring and protecting the health and well being of the Waikato River. The Waikato River is defined for the purposes of the Act as the river below the Huka Falls. [306] The Act provides for commencement in two ways. First, in section 2(b), it states that different provisions may be brought into force on different dates appointed by the Governor-General in Orders in Council. Section 6 defines commencement date to mean: If more than one Order in Council is made under section 2(b) the date of the last Order. 84

92 [307] As the Order in Council of 7 May 2010 only brought some of the provisions of the Act into force, the application of section 6 means, that notwithstanding that the named provisions are in force, they have no effect until a later Order in Council is made bringing the balance of the Act into force. As a consequence the Act will not apply. [308] In any event whether the Vision and Strategy for the Waikato River applies is of little moment, for the following reasons: i. No new water takes from the Waikato River are proposed; and ii. The only potential discharge identified is potential restoration, at some time in the future, of geothermal water flows at historic spring sites in the Spa area in response to reinjection. [309] As to the latter, Mr Bromley noted in his answers to the Board s written questions, that by the time any potential discharge becomes a reality, reinjection in this area is not likely to be required for subsidence mitigation. Then a judgement would be required in the context of the Discharge Strategy, to weigh the benefits of restored spring flows against concerns of chemical additions to the River. The Discharge Strategy has an objective - avoiding, remedying or mitigating contamination of surface and groundwaters. We also note that any likely potential discharge would be above the Huka Falls. National Policy Statement on Electricity Transmission [310] The National Policy Statement on Electricity Transmission came into effect on 10 April The Policy Statement sets as a matter of national significance the need to operate, maintain, develop and upgrade the electricity network. Only a very small part of the proposed infrastructure (the variation to the transmission lines) would be subject to this Policy Statement. All parties who appeared at the Hearing were satisfied that the project is consistent. [311] From the evidence it is clear to us that the interconnection of the project is likely to make the overall transmission network more secure. We are satisfied that the Tauhara II Project is consistent with the Policy Statement. 85

93 National Environmental Standards for Electricity Transmission [312] The National Environmental Standards for Electricity Transmission came into force on 14 January It was not specifically addressed in the application and associated AEE put forward. We asked all counsel for views on the applicability or otherwise of the standard, and what implications it had for the matters before us. [313] We find that the standard is relevant to the proposal as it relates to the works required to the existing Wairakei-Whirinaki A transmission line. The most restrictive classification of any of the activities to which the Standards relate is discretionary, while the majority are classified as permitted or controlled. [314] All agree that the activities are appropriately assessed as discretionary, based on the bundling of all the activities for which consents have been sought. This means that the application of the Standards does not change the status of any of the activities sought. Regional Planning Instruments [315] The Waikato Regional Policy Statement and the Waikato Regional Plan are the two regional planning instruments that govern the use and development of the geothermal resources of the Waikato Region. [316] The relevant provisions of the Policy Statement became operative on 21 December The Regional Plan became operative on 28 September 2007, except for the Geothermal Module subject to Variation 2, that became operative on 7 November A number of chapters of the Policy Statement and Regional Plan are relevant. Geothermal [317] Under the Policy Statement and Regional Plan geothermal provisions, the Waikato Regional geothermal resource is divided into management units termed Geothermal Systems. Within the Geothermal Systems, specific Geothermal Features are also identified, some of which hold the further classification of Significant Geothermal Features. Policy 3 Classification of Systems of the Policy Statement stipulates that 86

94 five classes of Geothermal Systems can be identified in the Regional Plan, based upon their: System size Vulnerability of Significant Geothermal Features to extractive uses; and Existing use [318] One class of Geothermal System is called a Development Geothermal System, within which development will be enabled because: i) the system contains few Geothermal Features that are moderately to highly vulnerable, or ii) the existing Geothermal Features are significantly impaired by lawfully established large takes, or iii) the system is already subject to large scale energy use and development. [319] Policy 1 Identification of Geothermal Systems in Section 7.4 of the Regional Plan identifies the Wairakei-Tauhara Geothermal System as a Development Geothermal System. [320] Table 7-1 of the Regional Plan sets out the following reasons why the Wairakei- Tauhara System is so classified: The system is already subject to large scale energy use and development. Existing surface features significantly impaired by legally established large takes. No evidence of a flow of subsurface geothermal fluid to or from a Protected Geothermal System. [321] The Policy Statement and Regional Plan policy provisions relate to geothermal systems in general, but also include more targeted provisions that relate to various aspects of the use and development of specific geothermal systems according to their classification. Use and Development [322] The following group of policy provisions from the Policy Statement and Regional Plan specifically address the use and development of Development Geothermal Systems. 87

95 [323] Policy Statement Development Geothermal Systems Objective: Large scale take, use and discharge of geothermal energy and water enabled within Development Geothermal Systems in a manner that: is efficient and allows the controlled depletion of energy so as to provide for the energy needs of current and future generations; remedies or mitigates significant adverse effects on Significant Geothermal Features; and avoids, remedies, or mitigates adverse effects on other natural and physical resources including overlying structures (the built environment). Policy One: Management of Use and Development in Development Geothermal Systems Provide for large scale use and development of geothermal energy and water, promote efficient use of the resource and recognise there will be controlled depletion. Policy Two: Integrated System Management Required for Development Geothermal Systems Each Development Geothermal System shall be managed in an integrated manner through: a. A System Management Plan that defines, by reference to all relevant policies in Chapter 3.7 of this Policy Statement, the objectives for the management of the system and provides as appropriate for: i) operational flexibility and adaptive management including provision for subsequent uses; ii) reservoir modelling and subsidence modelling; iii) a discharge strategy, including provision for reinjection/injection; iv) a mechanism(s) to ensure coordination and promote cooperation between all consent holders for large takes; v) research, monitoring and reporting; 88

96 vi) non-statutory review of the System Management Plan if in the opinion of the consent holders and the Waikato Regional Council, such amendments are minor. b. a peer review panel for the purpose of assisting the consent authority to manage the system so as to achieve the objectives of the System Management Plan; c. resource consent conditions; and d. a system liaison group/forum where appropriate. [324] Regional Plan Objective 1 Where geothermal energy and water is taken, it shall be used and managed efficiently. Policy 3: Management of Use and Development in Development Geothermal Systems Control the depletion of energy in Development Geothermal Systems through stepped production based on reservoir modelling that: considers the capacity of the system as a whole; and considers the reasonably foreseeable needs of present and future generations; and promotes efficient management and use of the system. Policy 4: Integrated System Management of Development Geothermal Systems Each Development Geothermal System shall have an up to date approved System Management Plan that defines the objectives to be achieved in relation to the System having regard to the relevant policies in the RPS. Policy 5: Multiple Operators Ensure mechanisms (multiple operator agreements such as steamfield management agreements and field operation protocols) are in place where more than one consent holder for large takes is to exist within a system. Any such mechanism shall address 89

97 the following matters to the satisfaction of the Waikato Regional Council (Environment Waikato): i) coordination and cooperation between consent holders ii) processes and procedures for assignment of responsibility and/or liability between consent holders for adverse environmental effects iii) identification of potential interference effects between consent holders iv) processes and procedures for avoiding, remedying or mitigating significant adverse environmental effects related to ii) and iii) above v) amendment of the System Management Plan vi) processes and procedures for dispute resolution of technical and consent related matters vii) processes and procedures for changes to the mechanisms, such as changes incorporating consent durations and transfers to new parties viii) siting of wells to avoid interference effects and to achieve efficient use and appropriate reinjection/production ix) monitoring, information and data access arrangements, including the apportioning of costs x) compliance with consent conditions, including joint reporting. There is a strong preference for formal agreement(s) between consent holders but an applicant may demonstrate achievement of this policy by other mechanisms. [325] The project would, through controlled depletion of the geothermal resource, enable the energy needs of current and future generations to be provided for in an efficient manner. [326] The proposal includes measures intended to remedy or mitigate adverse effects on other natural and physical resources, including Significant Geothermal Features and the built environment. This is to be achieved partly by way of a continuation of the existing management regime codified in the consents already held by Contact for the Wairakei-Tauhara Geothermal System and partly through conditions of consent. [327] The Opepe Farm Trust was of the opinion that the proposed take would effectively lock up the geothermal resource such that there would be no possibility of any future energy developments, which presumably in time would include proposals put forward by tangata whenua groups, on the Tauhara Field. The Trust requested conditions of consent that sought to establish a stepped take regime, the 90

98 progression of which would be based on proven mitigation of environmental effects to minor levels. Other tangata whenua submitters negotiated an agreed position with Contact to protect their future aspirations by way of mitigation processes. [328] Fears surrounding the locking up of the resource go to the matter of the sustainability of the proposed take a matter which we have discussed in some detail. The evidence satisfies us that the granting of this application would not lock up the resource to the detriment of others. We have found that the resource is sufficiently large to enable additional development to be undertaken by other parties if they so decide. [329] Regional Plan Policy 5 seeks to ensure that where there are multiple large take holders in a system, activities are undertaken to ensure integrated management of the resource and adequate control of adverse effects. The primary mechanism to achieve this is through a Multiple Operator Agreement, with any associated amendments of the System Management Plan if required. [330] In this case the only other holder of a consent to take a large amount of geothermal fluid from the Wairakei-Tauhara Geothermal System is Geotherm Group Ltd (In Receivership). While Geotherm has consents, it is not currently exercising these consents and we have no evidence as to when, if at all, they will be exercised. Geotherm is not a submitter to these proceedings. In such circumstances there is no activity that requires to be integrated. Discharge and Reinjection [331] The following group of policy provisions from the Policy Statement and Regional Plan specifically addresses discharges from and reinjection to Development Geothermal Systems. [332] Regional Policy Statement Policy Three: Reinjection / Injection For large takes of geothermal energy and water from Development Geothermal Systems, the geothermal water remaining after use is to be reinjected / injected in 91

99 accordance with a Discharge Strategy forming part of a System Management Plan which shall consider the following matters, as relevant to: a) Dispose of waste water; b) Return geothermal water to that system; c) Facilitate further extraction of energy from the system; d) Avoid or mitigate potential differential subsidence, and remedy or mitigate the adverse effects of subsidence, particularly in the built environment e) Reduce the risk of hydrothermal eruptions particularly in the built environment; f) Remedy or mitigate significant adverse effects on Significant Geothermal Features; and g) Avoid, remedy or mitigate contamination of surface and ground waters. Such Discharge Strategy shall also have regard to: i. Any likely benefits to or adverse effects on the system or its productive capacity; ii. The need for adaptive management and flexibility over time. iii. The benefits, costs and adverse effects of the Discharge Strategy; iv. The need to avoid or mitigate potential differential subsidence, and remedy or mitigate the adverse effects of subsidence, particularly in the built environment; and v. The need to reduce the risk of hydrothermal eruptions particularly in the built environment. [333] Regional Plan Objective 7 Significant adverse effects on fresh water and land arising from the discharge of geothermal energy and water avoided. Policy 12: Discharges of Geothermal Energy and Water onto Land and into Fresh Water Ensure that discharges of geothermal energy and water onto land and into fresh water after efficient and appropriate use are limited such that the adverse effects are no more than minor. 92

100 Policy 13: Discharge Strategy for Large Discharges of Geothermal Energy and Water in Development Geothermal Systems For large discharges of geothermal energy and water, reinjection / injection is to be undertaken in accordance with a Discharge Strategy prepared for each Development Geothermal System. [334] The System Management Plan for the proposal, required by the conditions of consent, contains a Discharge Strategy as required by the Policy Statement and Regional Plan. This is subject to the approval of the Peer Review Panel and the Regional Council. The Discharge Strategy addresses the matters that are required to be considered by the Policy Statement and Plan. In particular the Discharge Strategy addresses the need for adaptive management and flexibility over time. [335] The large reinjection area sought would allow flexibility of reinjection locations while the management regime proposed addresses the targeted reinjection that may be required to avoid subsidence effects as required by Policy 3 of the Policy Statement. We have discussed in some detail aspects of the reinjection/injection strategy. We find that the adaptive management approach reflected in the System Management Plan is in accordance with the Discharge and Reinjection provisions of the Regional Policy Statement and Regional Plan. Significant Geothermal Features [336] The following group of policy provisions from the Policy Statement and Regional Plan specifically address Significant Geothermal Features within Development Geothermal Systems: [337] Regional Policy Statement Policy Five: Management of Significant Geothermal Features in Development Geothermal Systems Allow for the efficient take, use, and discharge of geothermal energy and water in Development Geothermal Systems while remedying or mitigating within the Regional 93

101 Geothermal Resource, significant adverse effects on Significant Geothermal Features. [338] Regional Plan Objective 2 In Development Geothermal Systems, significant adverse effects on Significant Geothermal Features arising from the take of geothermal energy and water to be remedied or mitigated within the Regional Geothermal Resource Policy 6: Significant Geothermal Features in Development Geothermal Systems Where significant adverse effects on Significant Geothermal Features in Development Geothermal Systems are to be remedied or mitigated, the remediation and mitigation may include: the take and return of geothermal water being managed to remedy or mitigate significant adverse effects on those Significant Geothermal Features affected, or adverse effects on features of the same or similar type (defined in the glossary) being remedied or mitigated to an extent commensurate with the adverse effect being caused ( like for like mitigation). Policy 10: Adverse Effects of Land Use and Take, Use and Discharge of Water on Significant Geothermal Features Ensure that land use and the take, use and discharge of non-geothermal water avoid significant adverse effects on Significant Geothermal Features. [339] We find that the proposal is consistent with the provisions of the regional statutory instruments that relate to the protection of Significant Geothermal Features. [340] Within the Tauhara Field there are several different Significant Geothermal Features. Among the features are the Broadlands Road Scenic Reserve and the Waipahihi Stream Conservation Area. We were informed by the Department of Conservation at the hearing 170 that the Broadlands Road Scenic Reserve, in addition to its geothermal 170 Ongley opening submission at [3.3 and 3.4] 94

102 features contains one of the most extensive examples of prostrate kanuka in New Zealand. The Waipahihi area contains springs and the Onekeneke Stream that have remained relatively unmodified by the existing geothermal development on the System. The Stream has been affected by other developments. [341] The evidence demonstrated that potential adverse effects on Significant Geothermal Features would more than likely be minor, when compared to those that would occur naturally. It signalled that there is some uncertainty as to the extent and character of those effects and thus what the extent of effects on Significant Geothermal Features may be. [342] To avoid any uncertainty, the Department of Conservation proposed: To extend the current approach of providing off-site mitigation of any adverse effects by physical enhancement or financial contributions to the Wairakei Environmental Mitigation Trust; and Additional monitoring of Significant Geothermal Features and the sharing of information. The Department s proposal was accepted by Contact. These conditions adequately address any uncertainty. Effects of Take, Use and Discharge [343] The following group of policy provisions from the Policy Statement and Regional Plan specifically address adverse effects of take, use and discharge in Development Geothermal Systems. [344] Regional Policy Statement Policy Six: Adverse Effects of Take, Use, and Discharge in Development Geothermal Systems When taking, using, or discharging geothermal energy and water in Development Geothermal Systems, avoid, remedy, or mitigate the adverse effects on nongeothermal natural and physical resources, including overlying structures (the built environment). 95

103 [345] Regional Plan Objective 5 In Development Geothermal Systems, adverse effects on other natural and physical resources including overlying structures (the built environment), such as those resulting from subsidence and land instability, arising from the take, use, and discharge of geothermal energy or water to be avoided, remedied or mitigated. Policy 11: Effects of Geothermal Resource Use on Other Natural and Physical Resources, including Overlying Structures (the Built Environment) When taking, using, or discharging geothermal energy and water in Development Geothermal Systems, avoid, remedy or mitigate the adverse effects on nongeothermal natural and physical resources, including overlying structures (the built environment). Where there is scientific uncertainty and a threat of serious or irreversible adverse effects on natural and physical resources including overlying structures (the built environment) adopt a precautionary approach. [346] The Tauhara Field underlies significant urbanised areas of Taupo township, and periurban areas around the fringes of the town. Four subsidence bowls have developed around Taupo and Wairakei. The System Management Plan provided by Contact records that in most of these areas it is an agreed assumption that the subsidence is caused primarily by activities undertaken by geothermal power development. [347] Policy 11 of the Regional Plan directs a precautionary approach to be taken where there is scientific uncertainty and a threat of serious or irreversible effects on the built environment and other natural and physical resources. In this regard, Contact undertook significant scientific investigatory and modelling work to establish the cause of subsidence, and to predict and mitigate future subsidence. This work was summarised in the evidence of Professor O Sullivan and Mr Bromley. We have already referred to this in some detail. 96

104 [348] In terms of the built environment, Mr Booth 171 has opined that any physical damage can be repaired and has provided a cost estimate for that. [349] The investigatory and modelling work suggests that over time, with the implementation of the proposed mitigation measures, there will be no serious adverse effects on natural and physical resources. With specific regard to the built environment, it is anticipated that subsidence rates in three of the bowls can be managed and possibly stabilised. [350] It is apparent from the evidence that there is still some uncertainty as to what subsidence related effects may occur. A number of submitters were concerned about this uncertainty. [351] We find on the evidence, that the mitigation measures proposed, the monitoring provisions required, the oversight and control required by the Regional Council through the Peer Review Panel and the remediation provisions satisfy the precautionary approach. The take and reinjection will be constrained by conditions of consent requiring an adaptive and detailed monitoring regime. Air Quality [352] The following policy provisions from the Policy Statement and Regional Plan relate to air quality issues. [353] Regional Policy Statement Regional and Local Air Quality Objective: Significant characteristics of areas of: a) high air quality protected b) degraded air quality enhanced c) other air quality maintained Policy Four: Adverse Effects on Human Health Discharges to air managed in a way that is designed to avoid adverse effects on human health. 171 Booth EiC at [12.25] 97

105 [354] Regional Plan Objective 1: Significant characteristics of air quality as identified in Table 6-1 are: a. protected where they are high b. enhanced where they are degraded c. otherwise maintained. Objective 2: No significant adverse effects from individual site sources on the characteristics of air quality beyond property boundary. Objective 3: Cumulative effects of discharges on ambient air quality do not: a. present more than a minor threat to the health of humans, flora and fauna b. cause odour that is objectionable to the extent that it causes an adverse effect c. result in levels of suspended or deposited particulate matter that are objectionable to the extent that they cause adverse effects d. have a significant adverse effect on visibility e. cause accelerated corrosion of structures f. cause significant adverse effects on the relationship tangata whenua as Kaitiaki have with their identified taonga such as air, ancestral lands, water and waahi tapu. Policy 2: Managing Effects of Other Discharges Manage other discharges of contaminants to air through controlled and discretionary activity rules having particular regard to the effects of the discharge on: a. ambient air quality compared to the Regional Ambient Air Quality Guidelines (RAAQG) levels provided in Chapter 6.3, b. ambient air quality compared to internationally accepted air quality guidelines or standards for managing and understanding the effects of contaminants on human health, the health of flora and fauna and amenity values, 98

106 c. ambient odour and particulate matter levels compared to the guidelines for assessment provided in Chapter 6.4 of the Plan for odour and particulate matter d. adverse effects from contaminants that are hazardous in ambient air, particularly with respect to human health, e. the significant characteristics of air quality within an area, f. significant adverse effects of the discharge on the identified values of tangata whenua as Kaitiaki, g. the sensitivity of the receiving environment, h. existing ambient air quality and any cumulative effects as a result of the discharge on the receiving environment, i. nationally accepted codes of practice for the relevant activity. Policy 5: Positive Benefits of Resource Use Recognise the positive benefits to people and communities arising from activities that affect air quality by enabling a range of activities to use the air (including existing activities) whilst ensuring that: a. high quality air resources are protected, b. degraded air quality is enhanced, c. adverse effects on air quality are avoided, remedied or mitigated. [355] We have considered in some detail earlier in this decision, the effects, including cumulative effects, of the air discharges that will occur from the proposal. We are satisfied that the detailed conditions or consent that impose standards and require continuous monitoring would adequately avoid, remedy or mitigate any potential or actual adverse effects. Any adverse effects that may occur are more than offset by the positive benefits of the proposal. Energy [356] The Policy Statement Energy provisions set out the following Objective and Policy of relevance to the proposed activities: Objective: Efficient use of energy within the Waikato Region. 99

107 Policy One: Energy Efficiency and Conservation To promote efficiency and conservation in the production, transmission and consumption of energy. [357] As we have said, the proposal will contribute to the efficient use of energy and is consistent with the policy provisions. Matters of Significance to Maori [358] The policy provisions of the Policy Statement and the Regional Plan relating to matters of significance to Maori reflect the strong directions contained in Part 2 of the Act. They seek to ensure that the relationship tangata whenua have with their ancestral lands, water, sites, waahi tapu and other taonga is recognised and provided for. Particular regard must be had to the kaitiaki role of tangata whenua and opportunities for practical expressions of kaitiakitanga must be provided for. [359] We have found that tangata whenua have a clear relationship with the taonga that is the geothermal resource. The proposals by the applicant in relation to the modifications to the kaitiakitanga provisions in the General Conditions are consistent with these policy provisions. We have discussed this in detail earlier in the decision. Other Relevant Policy Provisions [360] Objectives and Policies in other parts of the regional statutory instruments are also relevant and these are set out in the section 149G report provided by the Regional Council. Integrated Management 172 [361] The provisions of the Policy Statement promote the integrated management of natural and physical resources in the Waikato Region. We are satisfied that the effects on other natural features of the proposed Tauhara II activities are sufficiently mitigated by the conditions of consent. 172 Section Regional Policy Statement. 100

108 Land and Soil 173 [362] The Policy Statement requires that the effects of accelerated erosion, and practices that cause it, should be avoided where practicable, and its adverse effects remedied or mitigated. Discharges of contaminants into or onto land should be carried out in a manner that avoids adverse effects on the soil resource. We find that the range of measures set out in the proposal will achieve the outcomes sought by the provisions. Mauri and Water Quality 174 [363] Tangata whenua concerns relating to the mauri of water need to be recognised and provided for, while a net improvement of water quality across the Waikato Region is sought. These provisions are relevant to ground water as well as surface water. The comprehensive monitoring regime set out for discharges will ensure that any adverse effects on both ground and surface water would be promptly identified. There are adequate adaptive management measures put in place to remedy any identified effects. Biodiversity 175 [364] Biodiversity within the region is to be maintained and enhanced. The Tauhara II activities have the potential to have adverse effects on thermo-tolerant vegetation. Conditions of consent have been formulated that require monitoring of such environments and the characteristics that comprise them. The management of the reinjection/injection activities are constrained by the Discharge Strategy to ensure the protection of such ecosystems. Structures (Infrastructure) 176 [365] Regionally significant infrastructure is to be maintained and enhanced through the avoidance of adverse effects on the safe and efficient operation of such infrastructure. We agree with the Regional Council that the range of management 173 Section 3.3 Regional Policy Statement. 174 Section 3.4 Regional Policy Statement. 175 Section 3.11 Regional Policy Statement. 176 Section 3.13 Regional Policy Statement. 101

109 measures put forward in the Contact applications means that the Tauhara II activities can be carried out in a manner consistent with these policy provisions. Assessment Criteria [366] Both the Regional Plan and the District Plan contain assessment criteria that apply. These criteria are a useful checklist for our assessment purposes. We accept the view of the Councils that the proposal, subject to the conditions of consent, is generally consistent with the relevant assessment criteria. Proposed Waikato Regional Policy Statement [367] The Proposed Waikato Regional Policy Statement was notified on 3 November 2010 in accordance with the First Schedule of the Act. It is appropriate that we have regard to it, subject to its stage in the participatory process. [368] In his evidence 177, Mr Brockelsby said: The geothermal aspects of the operative RPS are of relatively recent origin having been finalised in December I am advised..that feedback received during the consultative phase of the RPS review process suggested there was little community or industry wish for change in this area. As recorded in the s32 document supporting the proposed RPS (p3-67)): Feedback received on the March 2009 Regional Policy Statement discussion document indicated that geothermal policy should be carried over into the Proposed Waikato Regional Policy Statement. This indicates that the regional community considers it both achievable and reasonable. [369] We have analysed the relevant provisions of the Operative Regional Policy Statement. Given that there are no material differences between the proposed statement and operative statements, we are of the view that undertaking a separate analysis against the geothermal provisions of the proposed statement would add nothing to our deliberations. 177 EiC at [5.3]. 102

110 [370] Mr Brockelsby opined that the other non-geothermal provisions of the Proposed Regional Policy Statement, that are relevant to our deliberations, have little or no significant policy shift from the policy directions contained in the Operative Regional Policy Statement. He also told us that the proposed statement contains amendments which are centred around incorporating regional growth provisions as formulated during the development of the Future Proof strategy for the Regional Plan. They are therefore of minimal relevance. Taupo District Plan [371] The District Plan became operative on 11 October We were not made aware of any changes relevant to these proceedings. The majority of the consent application area (including the areas subject to the power station, switchyard, and transmission line land use consents) is within the Rural Environment. A small area of the consent application area is within the Industrial Environment. [372] Section 3 of the District Plan sets out the Objectives and Policies applicable within the relevant Environments and generally throughout the District. [373] Rural Environment Objectives and Policies Section 3b.2 OBJECTIVE 1 3b.2.1 The management of the Rural Environment to maintain and enhance rural amenity and character. POLICIES... iii. iv.... Maintain and enhance the amenity and character of the Rural Environment by providing land use performance standards and subdivision rules to manage the scale and density of development. Maintain the open space and dispersed building character. Provide for a range of productive land use activities within the Rural Environment while ensuring any adverse effects are avoided, remedied or mitigated. 103

111 OBJECTIVE 4 3b.2.4 The efficient and effective functioning of the Rural Environment by enabling the use and development of natural and physical resources, while ensuring appropriate environmental outcomes are achieved. POLICIES v. To recognise the important role of resource use and development in the Rural Environment, by providing for the continued operation and associated development of existing electricity generation facilities and network utilities by allowing their use, maintenance and minor upgrading where all additional significant adverse effects are avoided, remedied or mitigated. OBJECTIVE 5 3b.2.5 The protection of adjoining Environments from the adverse effects of activities within the Rural Environment. POLICY i. Manage the potential for adverse effects of activities in the Rural Environment at the interface of this and other more sensitive Environments. [374] These objectives and related policies seek to protect the existing amenity levels of the Rural Environment while recognising the importance of electricity production. The Plan recognises the enabling aspect of developing natural and physical resources subject to appropriate environmental outcomes. We have discussed the visual and other amenity related effects of the proposal earlier in this decision. We have also discussed reverse sensitivity effects and the effects of the proposal on the rural environment. We have found that the effects on the rural amenity are sufficiently mitigated by the conditions of consent. 104

112 [375] Industrial Environment Objectives and Policies Section 3d.2 OBJECTIVE 1 3d.2.1 The maintenance of the environmental qualities and functioning of the Industrial Environment. POLICIES Maintain the qualities of the Industrial Environment through controlling the bulk, location and nature of activities, to ensure an appropriate scale and intensity of buildings and activities that are consistent with an industrial scale of development; i.e. an appropriate density of activity and level of environmental effects, while allowing the functioning of the area to be maintained. Encourage a wide range of activities within the Industrial Environment, including any activity with nuisance elements not appropriate for any other Environment, while ensuring any adverse effects are avoided, remedied or mitigated. OBJECTIVE 2 3d.2.2 The protection of adjoining Environments from the adverse effects of activities within the Industrial Environment. POLICY i. Control the effects of activities within the Industrial Environment so the scale of development and level of environmental effects does not adversely affect the amenity of the other Environments of the District. [376] The above Objectives and Policies provide for the establishment and operation of activities in the Industrial Environment. They endeavour to provide that excessive off-site effects do not occur, and that the adjacent environment, as well as the amenity of the wider community is protected. 105

113 [377] Any such adverse effects can be appropriately avoided, remedied or mitigated through the design and operation of the proposal, which has to be approved by the District Council. It is mainly geothermal pipelines that will be located in the Industrial Environment. [378] Land Development Objectives and Policies Section 3e.2 OBJECTIVE 4 3e.2.4 Avoid the degradation of Taupo District s lakes, waterways and aquifers from effluent and waste water resulting from land development. POLICIES i. Implement integrated land management strategies in conjunction with Regional Authorities that will avoid, remedy or mitigate adverse environmental effects on Taupo District s lakes, waterways and aquifers. OBJECTIVE 5 3e.2.5 Ensure land development does not detract from the amenity value or qualities of the local environment. POLICIES i. Ensure that proposals for the subdivision and development of land assess the particular amenity values of the area including the physical characteristics of the land and avoids, remedies or mitigates any adverse effects. [379] The proposed power station will not be close to any lakes or permanent waterways. The waterway adjacent to the power station site is ephemeral. Sewage effluent disposal is proposed to be undertaken from the power station by way of conventional and well proven methods. [380] We are satisfied that appropriate conditions can be applied to ensure adverse effects are avoided or mitigated, and as such the application is consistent with Objective 4 and its associated policy. 106

114 [381] The Tauhara II development would generate adverse effects on the amenity values of the local environment, however these effects can be mitigated by way of conditions so that they would not be more than minor. The area is clearly identified in the District Plan as being suitable for geothermal development. [382] Traffic and Transport Objectives and Policies Section 3f.2 OBJECTIVE 1 3f.2.1 The safe and efficient operation of the roading network, and movement of traffic, including cyclists and pedestrians within the District. POLICIES i. Ensure activities avoid, remedy or mitigate any adverse effects on the operation and function of the roading network, including the movement of traffic cyclists and pedestrians, as accordance with the Roading Hierarchy. ii. Encourage activities, including the design and location of new vehicle crossings, to provide for the safe and efficient movement of traffic, including cyclists and pedestrians. [383] This Objective and Policies seek to ensure that activities do not adversely affect the safe and efficient operation of the roading network. The proposal would result in a significant increase in traffic movements during the construction period, but traffic movements would be relatively low after construction. This temporary increase would require upgrading to be undertaken to the roading network. A Construction Traffic Management Plan is also required, and was prepared, to address this. Our view is that the proposal is consistent with the above Objective and Policies. 107

115 [384] Tangata Whenua Cultural Values Objectives and Policies Section 3g.2 OBJECTIVE 1 3g.2.1 Recognise and provide for the cultural and spiritual values of Tangata Whenua in managing the effects of activities within the District. POLICIES i. Take into account the principles of the Treaty of Waitangi (Te Tiriti o Waitangi) in the management of the natural and physical resources of the District. ii. Ensure activities have regard for the cultural values of Tangata Whenua as Kaitiaki of their culture, traditions, ancestral lands, water and other taonga. iii. Ensure activities on or near Sites of Significance to Tangata Whenua are undertaken in a manner which provides for the cultural and spiritual value and significance of the site. [385] These provisions reflect Part 2 of the Act and the Regional Policy Statement and Plan. We have already found that the interests of tangata whenua have been adequately addressed. [386] Natural Hazards and Unstable Ground Objectives and Policies Section 3l.2 OBJECTIVE 1 3l.2.1 Protection of activities, development and life from the adverse effects of natural hazards. POLICIES i. Control the design and location of activities and development within identified natural hazard areas, or areas which have significant potential to be affected by a natural hazard, to avoid or mitigate the effects of the natural hazard. ii. Manage the location, design, and type of new activities and development to avoid or mitigate the adverse effects of flooding, erosion, ground rupture and 108

116 deformation, hot ground and land instability on development and the community. OBJECTIVE 2 3l.2.2 Activities and development do not create, accelerate, displace, or increase the effects of a natural hazard. POLICIES i. Ensure that activities do not alter or change the nature of a natural hazard event, increase the intensity of a natural hazard event or increase the risk of the event occurring. ii. Ensure that activities and structures do not increase the risk to the community or the environment from the effects of natural hazards. iii. Ensure that where development occurs within areas subject to the effects of natural hazards, property owners and/or occupiers are informed of and manage the risk. iv. Control the location and presence of hazardous substances in areas subject to natural hazards to ensure that there is no increase in the effects of the natural hazard or risk to the community from hazardous substances. [387] The Plan identifies two fault lines traversing the site. Submitters raised the potential for the take and reinjection/injection activities to induce seismic activity on the faults, and also to induce hydrothermal eruptions. Differential subsidence was also an issue. [388] We have discussed in some detail the potential effects of the proposal on differential subsidence, reinjection/injection and its potential effects on seismic activity and the possibility of hydrothermal eruptions. The proposed activity has the potential to cause differential subsidence and changes to surface activity. We are satisfied on the evidence that the management measures under the conditions of consent adequately mitigate these issues. 109

117 [389] Hazardous Substances Objectives and Policies Section 3m.2 OBJECTIVE 1 3m.2.1 Protection of the environment and the health and safety of the community, from the adverse effects of hazardous substances associated with hazardous facilities. POLICIES i. Ensure that hazardous facilities are appropriately located to avoid or mitigate adverse effects on the environment and unacceptable risks to the environment and community. ii. Ensure that hazardous facilities are designed and managed to avoid or mitigate adverse effects and unacceptable risks to the environment and community. [390] This Objective and Policies seek to ensure that the storage and use of hazardous substances are undertaken in a manner that does not present a risk to the community and potential adverse effects are avoided, remedied or mitigated. The conditions of consent require the applicant to prepare a Hazardous Substances report which includes procedures for the management of the hazardous substances that will be used on site. This has been completed. The conditions of consent are consistent with the Objective and related Policies. [391] Network Utilities Objectives and Policies Section 3n.2 OBJECTIVE 1 3n.2.1 To enable the operation, maintenance and upgrading of existing Network Utilities and the provision of new Network Utilities. 110

118 POLICIES ii. Provide for the establishment of new Network Utilities in a way that, as far as practicable, recognises the characteristics and amenity of the different Environment areas. iii. Have regard for the technical and operational requirements of Network Utilities and the contribution they make to the functioning and well being of the community. OBJECTIVE 2 3n.2.2 Network Utilities are designed and located to avoid, remedy or mitigate adverse effects on the environment and protect the health and safety of the community. POLICIES i. The establishment, operation, maintenance or upgrading of Network Utilities does not compromise the health and safety of the community ii. Avoid, remedy or mitigate the potential adverse effects of the location and siting of new Network Utilities on significant landscape features and the amenity and character of the District. iii.... iv. Encourage Network Utilities to avoid, remedy or mitigate adverse effects on the environment by co-siting or sharing facilities where this is technically practical and feasible while having regard to the best practicable option for the siting or sharing of facilities. v. Recognise that Network Utility services can maintain and enhance the social and economic well-being of communities. [392] The Objectives and Policies recognise the need for network utilities but identify that consideration must be given to the amenity of the area in which they are located, the health and safety of the community and measures to ensure that adverse effects are mitigated. As part of this application, a minor realignment of the existing 220 kv transmission line is proposed, to connect the power station into the national grid via the switch yard. Given that the transmission towers are an existing feature of the 111

119 environment, we consider that the realignment will largely maintain the current character of the area, and sufficient separation is provided between the lines and public areas such as roads. The proposal is consistent with the above Objectives and Policies. [393] Geothermal Activity Objectives and Policies Section 3o.2 OBJECTIVE 1 3o.2.1 Enable and manage the effects of land use activities associated with geothermal resource use and development. POLICIES i.... ii. To enable land uses associated with the use of geothermal resources in a manner which avoids, remedies or mitigates adverse effects on the environment. iii. To control the land use effects associated with the use of geothermal resources by way of environmental performance standards in rules and conditions on resource consents. [394] A reading of this Objective and Policies in conjunction with the Explanation and Principal Reasons for Adoption, makes it clear that the District Plan anticipates the development of Development Geothermal Systems subject to appropriate constraints. The detailed conditions of consent, which include a suite of Management Plans, would adequately constrain the development from adverse effects on the environment that are more than minor. 112

120 Overall Conclusion on the Relevant Planning Instruments [395] In considering the proposal against the relevant provision of the planning instruments, we are assisted by the careful and detailed analysis presented to us by Mr Chrisp. We agree with his overall conclusion 178 that the project is consistent with the relevant Objectives and Policies for the following reasons: (i) The proposal is an activity that is specifically provided for in the Objectives and Policies of the Regional Policy Statement, the Regional Plan and the District Plan; (ii) The proposal is subject to a System Management Plan, which includes a Discharge Strategy, as is required by the relevant statutory instruments; (iii) (iv) (v) The proposal would result in the efficient use of a geothermal resource which is identified as a Development Geothermal System; The power station site is located in a rural area but the effects on the rural amenities are constrained and there are other compatible land uses in the vicinity, such as a quarry, forestry and a motorsport park; and The agreements made with the Maori parties address the provisions relating to Maori in the statutory instruments. 178 Chrisp EiC at [1.4]. 113

121 PART 2 OF THE RESOURCE MANAGEMENT ACT 1991 Section 5 [396] In deciding the application we have regard to Part 2 of the Act. Section 5(1) establishes the purpose of the Act as being:...to promote the sustainable management of natural and physical resources... [397] Section 5(2) defines sustainable management : (2) In this Act, sustainable management means managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural wellbeing and for their health and safety while (a) (b) (c) sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and avoiding, remedying, or mitigating any adverse effects of activities on the environment. [398] Section 5 of the Act requires a broad overall judgement on whether or not a proposal promotes the sustainable management of natural and physical resources. The approach allows comparison of conflicting considerations, their scale or degree and their relative significance. Section 6 [399] We are required to recognise and provide for the following matters of national importance: (a)

122 (b) (c) (d) (e) (f) (g) the protection of outstanding natural features and landscapes from inappropriate subdivision, use, and development: the protection of areas of significant indigenous vegetation and significant habitats of indigenous fauna: the relationship of Maori and their culture and traditions with their ancestral lands, water, sites, waahi tapu, and other taonga: the protection of historic heritage from inappropriate subdivision, use, and development: the protection of recognised customary activities. Section 7 [400] We must also have particular regard to the relevant matters set out in section 7. These are: (a) kaitiakitanga: (aa) the ethic of stewardship: (b) the efficient use and development of natural and physical resources: (ba) the efficiency of the end use of energy: (c) the maintenance and enhancement of amenity values: (d) intrinsic values of ecosystems: (e) [Repealed] (f) maintenance and enhancement of the quality of the environment: (g) any finite characteristics of natural and physical resources: (h)... (i) the effects of climate change: (j) the benefits to be derived from the use and development of renewable energy. 115

123 Section 8 [401] In considering the proposal we are required to take into account the principles of the Treaty of Waitangi. Section 8 states: In achieving the purpose of this Act, all persons exercising functions and powers under it, in relation to managing the use, development, and protection of natural and physical resources shall take into account the principles of the Treaty of Waitangi (Te Tiriti o Waitangi). Assessment [402] We now assess our findings against the framework of Part 2. The overarching purpose of the Act, as set out in Section 5, is to achieve sustainable management of natural and physical resources. The purpose, as expressed in section 5, is informed by the hierarchical precepts promulgated in sections 6, 7 and 8. [403] The proposal will enable people and communities to provide for their social, economic and cultural well-being and for their health and safety by the provision of electricity. Additionally, a number of positive effects, identified by us earlier in this decision, will augment that enabling factor. These include: (i) (ii) (iii) The contribution the project will make to addressing climate change; The contribution the project will make to achieving the nation s targeted renewable energy goal; and The expected local, regional and national economic benefits. [404] We are satisfied on the evidence before us that the project does not give rise to any issue in respect of the life supporting capacity of air, water and soil. The evidence of Mr Bromley addresses the effects of the proposed reinjection/injection of separated geothermal fluid, and concludes that, with proper management within the framework of conditions, the life supporting capacity of the geothermal system can be adequately protected. [405] Key issues before us are, the extent to which potential adverse effects of the proposal would be appropriately avoided, remedied or mitigated. This was the 116

124 subject matter of much of the evidence that was put before us, and we have considered in some detail the measures put in place to address the potential adverse effects. We have found, that while there would be some effects adverse to the environment, they can be appropriately mitigated. [406] The proposal will not give rise to any issues in relation to sections 6(a) (d) and (f) (g) of the Act: (i) (ii) (iii) (iv) (v) No new development is proposed in proximity to the coastal environment, wetlands, or lakes. The only activity in the vicinity of the Waikato River (geothermal pipelines potentially being attached to an existing bridge) is a permitted activity under the Regional Plan; There are no outstanding natural features or landscapes affected by the proposed activities while there is some effect on the landscape values of Mount Tauhara we are satisfied that they have been adequately mitigated by the conditions of consent; Areas of significant indigenous vegetation and/or significant habitats of indigenous fauna will be either avoided or managed in accordance with the relevant geothermal policy regime; Public access to and along the margins of the coastal marine area, lakes and rivers will not be affected by the proposal; no area of historic heritage that we are aware of will be adversely affected by any of the proposed development; and There are no customary activities, other than Maori cultural matters that we address elsewhere, that would be adversely affected by the proposal. [407] With regard to section 6(e), the submissions representing Maori interests raised concerns about the potential effects of the proposal on Maori. We have already discussed these issues. Many of them were addressed from an environmental perspective by a number of witnesses. In particular: (i) (ii) (iii) (iv) Mr Williamson in relation to land and ground water quality issues; Mr Bromley and Mr Bixley in relation to surface geothermal features and subsidence; Dr Brady in relation to air quality; Professors O Sullivan and Horne and Mr Carey in relation to geothermal resource sustainability; and 117

125 (v) Mr Lister in relation to visual effects. [408] Notwithstanding the technical environmental matters addressed by the expert witnesses, we have found that the proposal would have substantial adverse effects on Maori and their taonga. These adverse effects would be mitigated by conditions of consent, agreed to by the majority of Maori submitters. Heads of Agreement that address the possible future utilisation of the resource by Maori have also been signed between Contact and many of the Maori parties. We have discussed in some detail these mitigation measures earlier in the decision. We have found that to the extent possible under the Act, Maori concerns have been addressed. [409] Under section 7(b) we are required to have regard to the efficient use and development of resources. We have found on the evidence that the proposal is an efficient development of the Tauhara Field and will not hinder future possible developments of the resource. As for section 7(ba) relating to the efficiency of the end use of the resource, that is a matter over which we have no control. [410] The maintenance and enhancement of amenity values and the quality of the environment are pertinent considerations. We have discussed the evidence relating to the effect of the proposal on the neighbouring amenity. We have found that with respect to noise, discharges to air and landscape, the effects of the proposal as constrained by the conditions of consent, will not be more than minor. [411] Having regard to all the above we find that the proposal, subject to the terms and conditions of consent, set out in Volume 2, meets the single purpose of sustainable management as defined in, and informed by, the provisions of Part 2 of the Act. 118

126 EXERCISE OF DISCRETION [412] We summarise the main matters and findings of fact that underlay our decision: (i) The Minister s reasons: The matter involves, or is likely to involve, significant use of natural and physical resources: Geothermal systems are a natural resource limited to a relatively small area of New Zealand. The Tauhara II proposal for a power station with a generating capacity of 240 to 250 mega watts will involve significant use of the Wairakei-Tauhara geothermal resource. The Tauhara field represents probably [the] largest developable geothermal resource in the Taupo Volcanic Zone. The matter affects or is likely to affect or is relevant to New Zealand s international obligations to the global environment: The proposal is relevant to New Zealand s international obligations to the global environment under the Kyoto Protocol because it will develop a renewable energy generation resource that will reduce the emission of green house gas per unit of electricity produced in New Zealand. (ii) We have identified a number of potential positive effects that will result from the proposal all of them uncontested; (iii) There is the potential for a number of adverse effects. However, the conditions of consent will adequately avoid, remedy, or mitigate those effects for the reasons set out in our decision; (iv) The proposal is generally, and in some cases specifically, consistent with, and in accordance with, the relevant provisions of Part 2 of the Act for the reasons set out in our decision; and (v) The proposal is generally, and in some cases specifically, consistent with, and in accordance with, the relevant statutory instruments for the reasons set out in our decision. 119

127 [413] In the exercise of our discretion we are required to balance and weigh our findings within the framework of the statutory directions contained in the Act and the relevant statutory instruments. We have found that the proposal, subject to the conditions of consent contained in Volume 2 of this decision, will: (i) (ii) (iii) (iv) (v) Have no adverse effect on the environment that is more than minor; Provide for the enabling of the communities economic, social and cultural wellbeing; Sustain the potential of the Tauhara Field for future generations; Safeguard the life supporting capacity of air, water, soil and the ecosystem of the Tauhara Field; and Maintain amenity values and the quality of the surrounding environment. [414] The Minister s reasons for exercising his discretion to refer the matter to this Board of Inquiry reflect the statutory directions contained in sections 7(i) and (j) of the Act to have particular regard to the effects of climate change and the benefits to be derived from renewable energy. [415] A proposal of this size, scale and nature cannot help but have some adverse effects on the environment. The participatory process identified a number of areas of particular concern to submitters. The same process facilitated a tightening of the conditions, which sufficiently mitigated those areas of concern to the extent, that only four submitters who attended the Hearing remained opposed in whole, or in part, by its end. [416] After a careful assessment of the evidence within the framework of the Act we find that the proposal, subject to the conditions of consent contained in Volume 2, as amended by this decision, will adequately address the concerns raised by the submitters. We exercise our discretion and grant the consents sought subject to the conditions of consent in Volume 2 of this decision, as amended. Lapse Periods [417] The standard lapse period for any resource consent issued under the Act is five years. That is, a consent holder has five years from the date on which a resource consent is granted within which to give effect to it. 120

128 [418] Section 125 of the Act allows for an applicant for a resource consent to seek a longer lapse period. In this case, Contact has applied for a 10 year lapse period for all of the resource consents sought, apart from the variations to consent conditions. [419] We find that it is appropriate to grant the requested 10 year lapse period for the following reasons: (i) The implementation of the project may be delayed by international economic influences that are beyond the control of the consent holder; (ii) National energy demand has flattened out in the last four years. Accordingly any new generation facilities, particularly of the maximum generation capacity of the proposal, may not need to be implemented until such time as the national demand increases to sufficient levels to make implementation of the additional generation economic; (iii) No party to the proceedings raised any objections to the requested lapse period; and (iv) The scale and significance of the proposal is such that an extended procurement and pre-planning phase may be required. Section 127 [420] Contact has applied under section 127 of the Act to amend a number of the General Conditions attached to the resource consents for the Wairakei, Te Mihi and Tauhara I Geothermal Power Stations, and to include an additional condition on an existing resource consent held by Contact to take water from the Waikato River for drilling and testing and other purposes 179. [421] Applications under section 127 must be assessed as if the application were for a discretionary activity. Our decision on the section 127 applications must take account only of the effects of the changes requested. We are not required to revisit the decisions on the existing consents. [422] The additional condition proposed for consent clarifies that the water taken from the Waikato River is to be used for activities associated with either the Tauhara 179 Waikato Regional Council consent authorisation to take up to 10,000 tonnes per day of water from the Waikato River for drilling and testing and other purposes. 121

129 I or Tauhara II projects. The amendments to the General Conditions simply align them with the updated System Management Plan for the Wairakei-Tauhara Geothermal System as proposed in the Tauhara II proposal. [423] We have found that none of these changes would cause more than minor adverse effects on the environment. The changes are consistent with the relevant policy provisions to which we must have regard. [424] Accordingly we find that the purpose of the Act would be achieved by granting the applications made by Contact under section 127 of the Act. 122

130

131 Appendix 1: Plan of Tauhara II Geothermal Development Project 124

132 Appendix 1: Plan of Tauhara II Geothermal Development Project 125

133 Appendix 2: Comments received pursuant to s149q from Contact Energy Limited 126

134 127

135 128

136 129

137 130

138 131

139 132

140 133

141 Appendix 3: Comments received pursuant to s149q from Taupo District Council 134

142 135

143 136

144 Appendix 4: Comments received pursuant to s149q from Tauhara Moana Trust 137

145 138

146 Appendix 5: Comments received pursuant to s149q from Mr Jack Waters 139

147 Appendix 5: Comments received pursuant to s149q from Mr Jack Waters Hi Jenny Not to miss the deadline - just a quick response to your 29 October letter. Re volume 1, [85] on page 29. I have been identified, among others, as one of the submitters who "remained opposed to the proposal". This is factually incorrect. I have never been opposed to the proposal - my submission was neutral. Therefore, for the record, I suggest this mis-statement should be corrected. Regards Jack Waters 140

148 Appendix 6: Wairakei Naming Conventions 141

149 Appendix 6: Wairakei Naming Conventions Te Mihi North Temihi Western Borefield Eastern Borefield Aratiatia Outfield Poihipi West Poihipi Southern KARAPITI Otupu 304 Infield Injection 310 Area Wairakei South TH2 Tauhara

150 Appendix 7: Tauhara Naming Conventions 143

151 Appendix 7: Tauhara Naming Conventions 144

152 Appendix 8: Map of Proposed Development Areas with Indicative Production & Reinjection Areas 145

153 Appendix 8: Map of Proposed Development Areas with Indicative Production and Reinjection (RI) Areas 146

154 Appendix 9: Diagram of Dual Pressure (Double Flash), Condensing Steam Turbine Plant 147

155 Appendix 9: Diagram of Dual pressure (double flash), condensing steam turbine plant 148

156 Appendix 10: List of Witnesses 149

157 Appendix 10: List of Witnesses Table 1: Contact Witnesses Name Mr James Kilty Mr Lindsay Stanfield Mr Robin Stewart Mr Tom Zink Mr Andrew Gough Mr David Drysdale Mr David Hunt Dr James Renwick Mr Sean Bevin Mr Craig Stephenson Mr Gavin Lister Mr Brett Harries Mr Malcolm Hunt Dr Rod Clough Dr Bruce Burns Dr Ian Boothroyd Dr Terrence Brady Mr Jon Williamson Dr Mike Dunstall Mr Michael Rosenberg Mr Paul Bixley Mr Brian Carey Evidence Topic includes: Approach to sustainability, energy context for the project, background to geothermal development, internalising adverse environmental effects and tangata whenua engagement Project description, introduction and fixed elements of Tauhara II Grid connection Description of how Tauhara II will be managed to a successful conclusion, Environmental Management Systems, Steamfield Design Protocol Civil engineering - discharges to land associated with construction and operation, stormwater management plan, erosion and sediment control Carbon Footprinting and "Life Cycle Assessment" Expected benefits from a national perspective Climate change Economic assessment Environmental management system, consultation Landscape character and amenity Traffic Noise Archaeology Ecology Aquatic ecology Emissions to air Discharges of separated geothermal water and condensate to ground Subsidence Geological sequence and structural features Overview of geothermal resource, production philosophy, logic underlying the proposed management and monitoring Consent applications lodged in 1996 and 1997, hapu consultation and geothermal resource sustainability 150

158 Professor Roland Horne Review of "Wairakei-Tauhara Modelling Report" dated February 2010, prepared by Professor Michael O'Sullivan and Mr Angus Yeh Professor Michael O Sullivan Mr Stephen Currie Professor Michael Pender Mr Christopher Bromley Dr Richard Allis Mr Derek Booth Mr Graeme Beattie Mr Mark Chrisp Mr Stephen Daysh Computer modelling studies of the Wairakei - Tauhara geothermal system on behalf of Contact Building levelling surveys, ground level surveys and horizontal surveys Subsidence Scientific information and interpretation associated with resource consent applications by Contact External reviewer - Subsidence investigations Subsidence - actual and potential building and infrastructure effects Review of DBCon report titled "Contact Energy Tauhara Stage II Geothermal Project; Building and Infrastructure Effects Report" Regulatory and policy framework under the Resource Management Act 1991 Proposed resource consent conditions Table 2: Witnesses for Submitters Submission Number Submitter Witness Evidence Topic includes: 5 Ian A Thain Mr Ian Thain Efficiency 6 Opepe Farm Trust Mr Temuera Hall Dr Charlotte Severne Maori cultural matters 16 Taupo District Council Mr David Greaves Planning 21 Energy Efficiency and Conservation Authority Mr Robert Harper Energy 29 Department of Conservation Ms Pauline Jenkins Ecology 32 Ngā Hapū o Tauhara Mr Mataara Wall Mr Lennie Johns Mr Geoff Rameka 52 Christine Karaitiana-Kidwell Ms Christine Karaitiana-Kidwell Maori cultural matters Maori cultural matters 151

159 53 Harvey Karaitiana Mr Harvey Karaitiana 54 Arthur (Jack) Waters Mr Arthur (Jack) Waters Maori cultural matters Subsidence remediation Table 3: Regional Council Name Mr Mark Brockelsby Dr Malcolm Grant Evidence Topic includes: Statutory instruments and conditions of consent Reservoir in answer to written questions from the Board 152

160 Appendix 11: Stratigraphy 153

161 Appendix 11: Stratigraphy Summary comparison of stratigraphy of the main geological units drilled in geothermal wells at Wairakei and Tauhara fields 154