Regulatory Environment

The Regulatory Environment for Project Development

Many countries have a form of resource leasing arrangement whereby blocks of land become available for development. New Zealand has a form of this for oil & gas and mineral reserves which is covered by the Crown Minerals Act 1991 but that does not cover geothermal resources. Instead geothermal resources are treated as water, therefore not owned by the Crown, and covered by broad environmental management legislation – in particular the Resource Management Act 1991 (RMA).

There is no bidding system for resource development. Rather, any person can seek consents to develop any resource. An application is considered in the light of the sustainable management context of the Resource Management Act, with more detail on how this is interpreted at regional level through Regional Policy Statements and Regional Plans, wider government imperatives, and the response of the public to proposed development.

The Resource Management Act 1991 is the principal regulatory instrument controlling the taking and use of geothermal fluid and energy in New Zealand. Large geothermal projects are now operating under resource consents applied for and issued under the RMA, the first of which were those for Ngawha. For some projects which were in operation before the RMA, and which were operating under older instruments, consents have subsequently been obtained. Water rights previously granted have been replaced by resource consents.

There have been various amendments to the RMA, one of these being implemented through the passing of the Resource Management (Energy and Climate Change) Amendment Act 2004. This defined geothermal energy as renewable for the purposes of the Act, and required councils to consider the benefits to be derived from the use and development of renewable energy (section 7j).

The RMA has come under close scrutiny in recent years. Key problems identified for major projects included: time delays (and the costs associated with those time delays), and variation of the quality of decision-making, particularly in relation to identification and weighing of matters of national importance. Process costs and the quality of public participation are also of concern. As such there were calls for “streamlining” and this has led to a number of improvements in recent years. The NZ Geothermal Association is supportive of the principles of the RMA, but is also supportive of efforts to streamline its application.

A Special Issue Around Exploration and Subsequent Development

It has been argued that geothermal explorers do not have enough certainty to explore because someone else can come in and apply for resource consent after the explorer has invested in exploration in a particular area. However, it is not clear that the lack of a legislative guarantee over the right to develop is a prohibitive concern.

In order to manage risk from competing interests, developers will spend considerable time negotiating exclusive access rights with land owners over the resource as a standard strategy. These contracts define the rights of each party in respect to accessing the geothermal resource and use of land.

An application for resource consent to develop a resource requires the provision of considerable information. Hence, the ability of a new party to gazump an existing explorer to develop for the same use may not be as easy as some assume or suggest.

There have been occasions where multiple competing developers exist on one field, with the competition between Contact and Geotherm on the Wairakei geothermal field being one example. Geothermal system management under the RMA takes account of the capacity of the resource for extractive use, and requires integrated management of the resource as a whole by the active parties. Problems of resource over-use that have occurred in other jurisdictions are less likely to occur under the RMA regime.

The Government can guide the national interest in various resource activities through National Policy Statements (NPS’s) and National Environmental Standards (NES’s) rather than leaving the interpretation of the RMA to regional or district councils to whom decision making has been assigned. NPS’s which could impact on geothermal development include statements on electricity transmission (2008) and on renewable electricity generation (2011), and a proposed NPS on biodiversity. The NPS on Renewable Electricity Generation requires regional councils to “recognise and provide for the national significance of renewable electricity generation activities, including the national, regional and local benefits relevant to renewable electricity generation activities”.

Resource consents are issued and administered by Regional Councils, and District Councils. Regional Councils deal with the effects of the use of natural resources, and District Councils deal with amenity effects under section 31 of the RMA. There are only three Regional Councils whose areas of responsibility include high temperature geothermal systems.

In the north, the Northland Regional Council is responsible for the Ngawha geothermal system, which is the sole known high temperature geothermal system in New Zealand outside the Taupo Volcanic Zone.

The Waikato Regional Council, has responsibility for most of the large high temperature geothermal systems in the Taupo Volcanic Zone and therefore in New Zealand. There are also many undeveloped geothermal resources in this area. Its area includes many low temperature fields. The Waikato Regional Policy Statement and Regional Plan both include a geothermal module which provides guidelines for future geothermal developments.

Bay of Plenty Regional Council has responsibility for the remainder of the Taupo Volcanic Zone. While the only large-scale developments in their area are at Kawerau, there are other potential developments, and there are many smaller direct use applications at a number of geothermal systems in their area, including Rotorua and Tauranga. At Rotorua there is a complex geothermal management situation involving many small direct users that are regulated by the Rotorua Geothermal Regional Plan.

The Councils have developed their own Regional Policy Statements and Regional Plans, following extensive public consultation, to guide the decision making process when consents are sought by a developer. These must be regularly reviewed and revised. Both Waikato and Bay of Plenty Regional Councils are now (2011) proposing their new RPS’s. These Councils have a Memorandum of Understanding to manage the geothermal resource of the Taupo Volcanic Zone in an integrated way. This includes sharing data and resources and alignment of their policy.

Waikato Regional Council has classified the Region’s geothermal systems into five categories with a different management approach for each category. Classification is based on ranking each system’s characteristics and aims to balance development with the protection of highly valued surface features.

Individual geothermal systems are classified by Waikato Regional Council as follows:

Classification Geothermal system
Development Horohoro, Mangakino, Ngatamariki, Mokai, Ohaaki, Rotokawa, Wairakei-Tauhara
Limited Development Atiamuri, Tokaanu-Waihi-Hipaua
Research Reporoa
Protected Orakeikorako, Horomatangi, Taupo, Waikite-Waiotapu-Waimangu,Tongariro, Te Kopia
Small Numerous low temperature systems

Protected systems contain vulnerable geothermal features, and their protected status ensures that underground geothermal fluids cannot be extracted and that the surface features are not damaged by unsuitable land uses. In systems classified as Limited Development and Research, small takes that will not damage surface features are allowed. In geothermal systems classified Development, development is permitted subject to obtaining resource consents and the environmental impact being acceptable. Overall, the classification enables large-scale extractive uses in some systems while protecting other geothermal systems for passive and small uses.

Waikato Regional Council Policy accommodates new geothermal systems that might be found or created (Engineered Geothermal Systems) by classifying them as Research Geothermal Systems. This classification allows for further exploration of the system before possible reclassification as a development, Limited Development or Protected Geothermal System.

Bay of Plenty Regional Council has currently classified its geothermal fields into five management groups. Group  1 is identified for complete preservation and includes Waimangu/ Rotomahana/ Tarawera, Whakaari (White Island) and Moutohora Island (Whale Island). Group 2 specifically relates to the Rotorua geothermal field, with its own operative plan. Group 3 requires protection of certain surface features but may allow limited development of Tikitere/Ruahine, Taheke, Rotokawa/Mokoia Island and Rotoma/Tikorangi. Group 4 is intended for development and includes Kawerau, Lake Rotoiti and Rotoma/Puhi Puhi. Group 5 covers a range of low temperature resources

Streamlining of procedures was mentioned earlier. The RMA does set statutory times for various stages of the consenting process, and includes some alternative paths. Consent applications for large geothermal developments can either be heard by a Board established by the Regional Council, or for projects of national significance could be “called in” by the Minister for the Environment to be heard by a Board of Inquiry or the Environment Court. In practice, individual developers have their preferred paths such that one may follow the conventional path through the Councils, while another may lobby to be “called in”. Either process will be guided by the same policy statements, plans, etc. and will involve consultation with the public and affected interests. The respective paths give developers confidence that consents can be heard and decisions arrived at on these consents in a timely manner.

The following table indicates that time that has been required for some large scale geothermal development consents. Actual dates of lodgement and decision dates are shown. Within the RMA there are periods when the “clock” is started or stopped which leads to a processing time, not shown here currently.

Waikato Regional Council Hearings

Project Company Date Lodged Decision Date Decision Notes
Rotokawa Rotokawa Joint Venture 24/12/92 26/08/93 Granted
Mokai Tuaropaki 3/12/93 19/10/94 Granted
Reporoa Kaimai Energy 18/12/95 16/05/96 Declined
Nga Awa Purua Rotokawa Joint Venture 1/06/07 15/1/08 Granted
Ngatamariki MRP 6/11/09 31/08/10 Granted

Appealed Waikato Regional Council Decisions

Project Company Date Lodged Decision Date Consent Granted Notes
McLachlan Geotherm 30/06/88 1/03/95 28/11/95
Wairakei reinjection ECNZ 1/08/90 1/03/95 30/08/96
Tauhara 1 Contact 18/09/96 29/4/98 14/02/01
Wairakei Binary Contact 9/10/96 17/05/99 17/05/99 appeal withdrawn.
Ohaaki reconsenting Contact 31/03/98 3/11/98 8/04/99
Wairakei reconsenting Contact 30/03/01 19/10/04 3/10/07 Consents were held up 1yr 8 months while Geotherm appeal to Env Court then High court on who should be heard first.
Tukairangi Rd Geotherm 8/08/01 22/12/04 29/03/07

Bay of Plenty Regional Council Hearings

Project Company Date Lodged Decision Date Decision Notes
Kawerau MRP Granted Processing time = 6 months.

Northland Regional Council Hearings

Project Company Date Lodged Decision Date Consent Granted Notes
Ngawha I (first application) Ngawha Geothermal Resource Co Ltd 22/05/92 2/05/94 Granted Delayed by information requests including from Treasury, and addressing iwi concerns.
Ngawha I (consent renewal) Ngawha Geothermal Resource Co Ltd 5/10/03 28/07/04 Granted Ngawha I and Ngawha II consents were processed together. Delayed by further information requests and need for targeted environmental monitoring.
Ngawha II Ngawha Geothermal Resource Co Ltd 5/10/03 28/07/04 Granted
Note: Ngawha Geothermal Resource Co Ltd was originally a joint venture between Top Energy and Tai Tokerau Maori Trust Board but is now 100% Top Energy

Appealed Northland Regional Council Decisions

Project Company Date Lodged Decision Date Consent Granted Notes
Ngawha II Ngawha Geothermal Resource Co Ltd 19/08/04 30/08/06 14/11/06 Delays chiefly due to time for reinjection trials and due to backlog of Environment Court work.

Called in Hearings

Project Company Date Lodged Decision Date Consent Granted Notes
Te Mihi Contact 31/07/07 3/09/08 Granted
Tauhara II Contact 19/02/10 14/02/11 Granted First decision under EPA process.

The Ministry for the Environment has published a wide range of documents on the RMA.

Some simple guides include:

Definition of Surface Geothermal Features Waikato Regional Council Policy Statement

Molten sulphur-producing spring: A hot spring whose water supply passes through elemental sulphur bearing rock at a temperature sufficiently high to melt the sulphur (119°C) and bring it to the surface.
Mud geyser: Any naturally occurring geothermally heated mud pool that occasionally or frequently erupts. The eruption produces an intermittent or continuous discharge caused by the evolution of a phase dominated by steam or other gases. This must be vigorous enough to forcefully raise liquid mud by surging, boiling, throwing, splashing, or jetting it into the air above a static water level. This includes mud volcanoes exhibiting this behaviour. The area covered by a mud geyser includes the mud pool, its banks, and any mud formations built up by the ejection of mud from the pool.
Geyser: Any naturally occurring geothermal spring that occasionally or frequently erupts producing an intermittent or continuous discharge by the evolution of a phase dominated by steam or other gases, vigorous enough to eject forcefully liquid water by surging, boiling, throwing, splashing, or jetting it into the air above a static water level or vent opening. This includes hot water geysers, perpetual spouters, soda geysers, and crypto-geysers. The area of a geyser comprises that of the spring basin and the area covered (perhaps intermittently) by surface water composed of the undiluted discharge from the geyser, and by any sinter deposits created by that discharge.
Sinter-depositing spring: Any naturally occurring geothermal spring that deposits sinter on surfaces covered by its outflow, or any submerged geothermal spring that would be likely to deposit sinter if it were no longer submerged. The area of a sinter-depositing spring comprises that of the spring basin, together with the area covered by any surface water composed of the undiluted outflow from the pool and any sinter deposits created by that outflow.
Recent sinter: Any sinter body that has received natural sinter deposition since 1900 but which is no longer receiving natural sinter deposition. This includes carbonate sinters (travertine). The area of a recent sinter body consists of that of all interconnected sinter in a single occurrence and the land formations underlying it.
Significant geothermal habitat: Any area classified as being of International, National, Regional or District significance in the document “Geothermal Vegetation of the Waikato Region – Revised and Expanded 2003”, dated June 2003, prepared by Wildlands Consultants Ltd for Environment Waikato, or any geothermal area that meets the criteria for determining significant indigenous vegetation or significant habitat of indigenous fauna in Appendix III of the Waikato Regional Policy Statement.
Superheated fumarole: Any naturally occurring vent, including those found underwater, whose main discharge consists of steam and other gases of geothermal origin with a temperature greater than the local boiling temperature of water. The area of a fumarole consists of the vent, any surface accumulating mineral deposits derived from its gases, and any ecosystems dependent on the heat and fluid flowing from the vent.
Geothermal wetland, lake, pool, or stream: Any naturally occurring wetland, lake, pool, or stream, whose chemical or temperature profile is so influenced by natural geothermal input that it either provides habitat for thermotolerant, thermophilic, or extremophilic organisms, or contains water hotter than 30°C. The area covered by a geothermal wetland, lake, pool, or stream consists of the water body, its bed and banks, any mineral deposits derived from the water body or its outflow, and any thermotolerant, thermophilic, or extremophilic ecosystems dependent on it.
Hydrothermal eruption crater: Any naturally occurring crater produced by the explosive boiling of geothermal water without the direct involvement of near-surface magma, and by the consequent ejection of material derived from the rock matrix. The area of a hydrothermal eruption crater comprises that of the crater, its sides, and the ejecta deposited around the crater.
Mud pool: Any naturally occurring basin of turbid water or mud heated (or recently heated) by geothermal processes. The area of a mud pool comprises that of the pool itself, its banks, and any mud formations built up by the ejection of mud from the pool.
Culturally significant feature: Any geothermal surface feature, whether artificial, natural, or modified that is of outstanding cultural heritage significance.

Other Regulators

Publications

  • Lawless, J V 2000: A review of resource consent conditions for large-scale geothermal developments In New Zealand. New Zealand Geothermal Association Annual Seminar, Taupo

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