Babcock & Brown Wind Partners have reached an agreement with NZ Windfarms, an offshoot of Christchurch turbine manufacturer Windflow Technology, to build a NZD 80 million wind farm - Te Rere Hau.

New Zealand has some of the best sites in the world for windfarming. The circumpolar winds of the Roaring Forties blow unchecked by land until reaching New Zealand and the airstream is then accelerated further by their mountain ranges. This translates into load factors of up to 55% - double the norm.

So windpower in NZ has tremendous scope for low cost expansion. Hydropower is the cheapest form of electricity generation (at least levelised over a lifetime or as a production cost) bar none and contributes the lion's share of NZ electricity. In 2003, of 41 billion kWh of electricity generated in NZ, 58% was hydro, 24.5% gas, 7.6% coal, 6.7% geothermal, 2% wind and 1.3% biomass.

With NZ's hydropower potential now fully exploited and imported gas now at record prices, the case for wind in New Zealand has never been better.