Kaiwera Downs wind farm near Gore opens as the South Island’s biggest

Mercury has officially opened the second stage of its Kaiwera Downs wind farm near Gore, completing what is now the South Island’s largest wind farm after a combined investment of about $601 million.

The company said on Wednesday 9 September that the $486 million expansion had added 36 turbines and 155 megawatts of installed capacity. Together with the 10 turbines of the first stage, commissioned in 2023 for $115 million, the Southland site now has 46 turbines and 198 megawatts of capacity. Mercury expects it to produce 675 gigawatt hours in an average year, which it says is enough for about 96,000 homes, based on a home using 7,000 kilowatt hours a year.

Chief executive Stew Hamilton opened the wind farm alongside MPs Penny Simmonds and Joseph Mooney, representatives of Gore District Council, local iwi and hapū, landowners, staff and contractors. In the company’s release he said the team had completed the second stage on time and on budget.

The turbines are already feeding the grid, although the job is not quite finished. Mercury’s project page says the second stage started generating in April 2026 and is expected to reach full generation in November.

The size of the addition is clearer against national figures. The Ministry of Business, Innovation and Employment’s Energy in New Zealand 2025 report records wind generation at a record 3,919 GWh in 2024, from 1,265 MW of installed wind capacity, out of 43,879 GWh of electricity generated across the country that year. On those figures the new 155 MW stage alone equals about 12 percent of the country’s 2024 wind capacity, and its expected 525 GWh a year equals about 13 percent of everything New Zealand’s wind farms produced in 2024. The whole Kaiwera Downs site, at 675 GWh, would match about 1.5 percent of national generation that year, or roughly one unit in every 65.

Those are Newswire calculations comparing Mercury’s expected average output with MBIE’s actual 2024 results, and real output from any wind farm rises and falls with the weather. You can see where Kaiwera Downs sits among the country’s power stations on our NZ Grid Live map, and follow the daily renewable share on our electricity dashboard.

The expansion is tied to the Tiwai Point aluminium smelter. Mercury said its 2024 power purchase agreement with New Zealand Aluminium Smelters gave it the confidence to build the second stage. RNZ reported in June 2024 that Mercury committed the $486 million the week after that long-term supply deal was signed.

Hamilton once ran the smelter himself. He told RNZ most of the work on the deal was done before he took the top job at Mercury. “I was very early, so most of that was actually being done before I moved into the chief executive role,” he said.

Mercury says the build employed 129 full-time equivalent staff, with up to 180 people on site each day at the peak of construction. It estimates the construction put $100 million into the local and regional economy through contractors, subcontractors, support staff, accommodation and hospitality. Hamilton said the company is also in its third year of supporting the Kaiwera Downs Community Fund, which backs local organisations and projects around the wind farm.

The turbines stand on two working farms, one running sheep and the other cattle. Sam Woodford, who manages the cattle farm owned by the New Zealand Super Fund, told RNZ the wind farm had brought benefits. “Going forward, it’s some good income and roading maintained for the whole time as well,” he said.

Gore District Mayor Ben Bell turned the first sod in 2022. “It’s pretty surreal that only four years ago this was just a whole bunch of empty paddocks at the top of a hill and now there’s 46 massive turbines here,” he told RNZ.

For households the bigger question is power bills. Hamilton told RNZ that wholesale prices had fallen significantly over the past six months as new generation was built, and that this would reach residential customers over time. He also pointed out that generation is only part of what people pay, with distribution and transmission costs making up much of the rest. “The electricity component is only about 30 percent of the actual bill,” he said. “But I think as that investment comes through, we’ll definitely see power prices stabilise.”

Kaiwera Downs is one of three Mercury projects coming on stream this year. The company has also started generating from its new Kaiwaikawe wind farm in Northland and from its Ngā Tamariki geothermal expansion near Taupō. “Together, these three projects represent around $1 billion of investment and 1.1TWh of additional annual renewable generation – enough to power around 160,000 homes,” Hamilton said.

Mercury’s next project is Puke Kapo Hau, the $506 million second stage of the Mahinerangi wind farm in Otago. Mercury says it will have 228 MW of capacity and generate about 646 GWh a year, and that Mahinerangi will be New Zealand’s largest wind farm once both stages are complete. Hamilton said Mercury was completing final grid connection studies with Transpower and expected to begin construction later this year.

That project is backed by a power purchase option agreement with Datagrid, which is developing a large data centre in Southland. RNZ reported that the data centre has drawn criticism from some locals over water use, electricity prices, property values and public health, and that Hamilton acknowledged there were legitimate concerns.

Kaiwera Downs may not hold its South Island title for long. Contact Energy has approval for a 55-turbine wind farm at Slopedown in eastern Southland, 1News reported.

Mercury is listed on the NZX and the ASX, and the Government holds a legislated minimum 51 percent of its shares. The company says it has developed five of New Zealand’s last six wind farms.

Will more wind farms like Kaiwera Downs bring power bills down, or will network costs swallow the savings? Tell us what you think in the comments below.

This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂