Mercury NZ Limited announced it will add a fifth generating unit at its Ng Tamariki geothermal station, boosting generation output by 46MW (390 GWh p.a.). The details: The expansion will cost $220 million (excluding capitalised interest, geothermal drilling of ~$35 million and sunk costs of $3 million), part of the signalled total commitment of up to $1 billion investment in generation expected in FY24 by Mercury. The fifth unit's net capacity is 50MW.

After reconfiguring the site, the net output for the full station increases by 46MW, increasing generation by ~390 GWh p.a. (equivalent to an additional ~55,000 households). The project has been developed with support from commercial partner Tauhara North #2 Trust. Mercury has executed contracts for engineering, procurement and construction with global geothermal manufacturer Ormat.

Construction will commence in early 2024 calendar year, with first generation expected in late 2025. Mercury has developed the project whilst working with commercial partner Tauhara North No. 2 Trust to ensure the sustainability of the reservoir and management of the surrounding environment.

The expansion is the first of three advanced renewable generation development projects expected to go to Final Investment Decision (FID) this financial year for Mercury. Kaiwaikawe wind farm and stage two of Kaiwera Downs wind farm are both nearing FID. It also follows on from full operation of Turitea South wind farm which commenced in July, and stage one of Kaiwera Downs wind farm, expected to be fully operational next month.

Geothermal energy is an important part of New Zealand's energy mix because it generates 24/7. As a baseload energy source, it helps meet winter peaks and its reliability is an important complement to intermittent renewables like wind and solar.