Contact Energy has been given approval to start work on a generation project at the existing Hawea dam in Central Otago.The project was originally lodged with the Otago Regional Council in 2004, but community concerns prompted a redesign of the scheme to reduce the environmental impact.

Construction of the dam is expected to take at least two years, starting next year. Otago Regional Council has now given consent for work to begin on installing equipment for the project, which is expected to generate enough electricity to power 6000 homes.

Tauranga-based Trustpower has also gained interim approval for its hydro scheme in Marlborough’s Wairau Valley. It wants to divert water from the Wairau river through 46km of canals and five power stations and then return it to the river.