Construction has started on a solar and battery energy storage project on New Zealand’s Stewart Island/Rakiura that is forecast to deliver a more resilient energy network, cut power prices, and slash the island’s diesel use by up to 75%.
Stewart Island, New Zealand’s southern-most point, is home to about 490 residents. The island is wholly reliant on diesel generators for its electricity supply with households and businesses currently paying more than $0.70 (NZD 0.85) per kWh for electricity, more than twice as high as on the mainland.
That is expected to change in the near future with work now underway on a 2 MW solar farm comprising about 3,000 panels, a 4 MW battery capable of storing at least six hours of the island’s average energy needs, as well as upgrades to the electricity supply network.
The project is being delivered by the Southland District Council through the Stewart Island Electricity Supply Authority, which owns and operates the island’s electricity system. New Zealand solar engineering, procurement and construction specialist Infratec is leading the build which is expected to be completed in early-2027.
While diesel-fueled generation will continue to serve as back-up, the solar and battery energy storage facility is expected to reduce diesel consumption on the island by up to 75%, displacing about 200,000 litres of diesel a year. The project is also expected to cut power prices by up to $0.29 (NZD 0.35) per kWh.
New Zealand’s Associate Regional Development Minister Mark Patterson acknowledged that living in remote areas like Stweart Island does come with a cost but said the project “responds directly to the challenges” identified by the community, “including high power costs, supply risk, and long-term resilience.”
Southland Mayor Rob Scott said he expects the project will deliver a more reliable, sustainable, and affordable energy supply for Stewart Island, and stimulate the local economy.
“This project isn’t about fixing something that’s broken,” he said, “it’s about building on what’s already here.”
The project is expected to support about 40 fulltime-equivalent jobs during construction, with long-term benefits for tourism, aquaculture and other local industries as energy costs come down.
Southland District Council secured a $12.65 million (NZD 15.35 million) loan through the New Zealand government’s Regional Infrastructure Fund to finance the project.
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