Investigating Mokau

Coal has been mined on and off at Mokau since the late 1800s, however, since 1950 the coal seams have been untouched. Now Genesis Energy has begun studying the region with a view to developing a mine there.   BY NEIL RITCHIE

Government-owned Genesis Energy is investigating the feasibility of developing a coalmine in the north Taranaki region of Mokau.

Late last year it applied for a 5600-hectare coal exploration permit over the Mokau region and, during the next two years, will carry out a pre-feasibility study of Mokau and its vast coal resource that extends from northern Taranaki into southern King Country.

Company public affairs manager Richard Gordon says the application is essentially Genesis “covering its bases” – diversifying its portfolio of possible and probable fuel sources for the future, as well as its likely electricity generation locations.

During the initial phase of this study, Genesis Energy will review all existing research and literature, including 40 geotechnical reports, on Mokau coal and “marry that up with current mining technologies and practices”.

“If pre-feasibility studies indicate further work is warranted, we would move to a full feasibility study of how to mine the estimated 110 million tonnes of recoverable coal at Mokau.”

And, given a positive outcome to the pre-feasibility study, Genesis may also move to discover how to use the fossil fuel resource in carbon-neutral ways – options that could include the construction of a multi-million-dollar coal-fired power station nearby to help meet New Zealand’s ever-growing demand for electricity.

Significant new generation plant will be needed within the next few years, particularly if the country’s demand for power continues to grow at, or near, the current two per cent per annum increase.

Genesis has not decided the likely size of any Mokau coal-fired station, though new gas-fired stations are usually each capable of producing 200-400MW of New Zealand’s total estimated power generation system of approximately 8200MW.

“New Zealand has huge coal resources and these, along with further finds of natural gas, are likely to remain the only indigenous reserves of energy able to offer substantial and economic long term development prospects.

“Solar, wind and other alternative renewable energy forms are unlikely to provide large increments in New Zealand’s electricity supply.

“However, at this stage there are no plans to build a power station in the Mokau area. Resource consenting work is nowhere on the horizon and it would take five years or so from any consent application to first electricity.”

Gordon says any new power station would need to be built at, or near, Mokau because Mokau coal, with its 2.4 per cent sulphur content, is not suitable for New Zealand’s only other power station that uses coal. Genesis’ existing 1040MW Huntly duel-fuelled (coal or natural gas) power station, at 20-plus years, is definitely into the second half of its economic life.

“We already operate Huntly on world’s best practice methods and Mokau coal would not be suitable for Huntly, which was designed to run on Waikato coals, and also now runs on imported coal from Indonesia.

“We will not be building a new coal fired power station at Mokau in the immediate future. It’s more likely to be 10 to 15 years, by which time there should have been significant advances in technologies, including carbon capture, so that coal might even be carbon neutral as a fuel source.

“I doubt that we would ever move to consenting a new coal fired power station without CO2 capture.”

But, with the likely advances in technology related to geosequestration – carbon capture and underground storage – coal should lose its “dirty” image and become more acceptable as a fuel source in New Zealand.

The trio of government-owned entities – Genesis, state coal miner Solid Energy and GNS Science – are currently spending about $2 million investigating geosequestration methods.

Coal is not such a dirty word overseas, with almost half of Australia’s electricity currently coming from coal-fired power stations, he adds.

Gordon says that Genesis will consider the government’s recently released draft National Energy Strategy – which proposes only renewable new electricity generation and an effective tax on big business, including power generators, for carbon emissions.

“Ultimately we accept there will be some form of carbon pricing and trading scheme and Genesis, along with other generators, and large industrial energy users, are working with Business New Zealand to develop an appropriate emissions trading model for New Zealand.

“Decisions to proceed, or not, on developments will be decided on commercial and economic grounds, taking the price of carbon into account.

“We accept the price of carbon will have to be factored into any fossil fuel development . . . this Mokau development is a very long term plan.”

The history of coal at Mokau goes back hundreds of years. Maori were aware of coal at Mokau centuries ago – deep seams of coal could then be seen from the Mokau River – the second longest in New Zealand after the Waikato River.

No one tried to mine it, though, until the 1870s when geologists tested the coal and thought it was better than Waikato coal. Sales of Mokau coal started in 1884 and, over the next 40 years, many companies worked mines along the difficult Mokau River.

However, a disastrous flood in 1915 choked the river with tonnes of logs, effectively killing the coal industry, though several small operations continued until the 1950s. There were also opencast mines near Mahoenui, on the northern edge of the Mokau field, until the early 1990s.

Past governments have considered mining Mokau coal and building power stations to burn the fossil fuel.

More than 20 years ago, the government’s Ministry of Energy started investigating Mokau coal and the economics of building a 1000MW power station to supply electricity to the national grid.

It concluded that sufficient extractable sub-bituminous coal existed at Mokau to cover the expected 30-year life of such a 1000MW power station.

“If further investigations of the Mokau coalfield confirm initial results, and if extraction of the coal proves both environmentally and economically feasible, it is likely to be the source for the next thermal power station required after the turn of the century,” said the ministry’s 1984 Energy Plan.

However, an abundance of relatively cheap Maui gas, plus the switch by successive Labour-led governments away from coal, essentially saw no further investigations into Mokau coal – until now.