Identifying the right sites for turbines, getting consents, maximising yield, and capturing favourable market conditions and exchange rates are the critical factors to make the nation's wind farms economically viable, says a new report.
The report, from accountancy firm Deloitte, had clarified "considerable debate" about the cost of wind energy in this country, said New Zealand Wind Energy Association (NZWEA) chief executive Fraser Clark.
"Until now we have had to interpret how overseas data might apply to New Zealand's specific market and economic environment," Mr Clark said.
"It's great that we can now identify the secrets of the New Zealand wind industry's success."
The report, released by the NZWEA as it began its annual conference today, noted that the long-term marginal costs of specific wind energy projects needed to be compared not only to the expected future wholesale electricity price, but the relevant costs of competing technologies.
The long-term marginal cost of New Zealand's wind energy projects has been between $78 and $105 for each megawatt-hour of electricity generated, the report said.
"The environment in New Zealand for wind project investment remains challenging with recent average wholesale electricity prices well below the level required to justify investment in wind generation," the report said.
The future environment was highly uncertain, with "significant" uncertainty over the impact of carbon prices - driven by the Government's emissions trading scheme -- on future wholesale electricity prices.
"Some projects have been committed based on assumptions that prices will rise to a level which will achieve the required rate of return over the projects' life cycle," the report said.
But there was also uncertainty over the "cost" of increasing generation capacity, and improvements to the Cook Strait power transmissions, and there were alternative technologies which had been viable at lower prices than wind generation had been able to achieve.
"This may hold down prices in the short-to-medium term," the report said.
Mr Clark said wind generation had increased 10-fold in the past six years and wind now supplied 4 percent of New Zealand's electricity.
Over the past 18 months more than $300 million had been invested in new wind farms, and Mr Clark predicted that new wind farm sites across the country would become sources of competitively priced electricity generation when the conditions were right for their development.
Environment Minister Nick Smith told the conference that a record 32,000 gigawatt hours of electricity was produced from renewable sources in 2010 - more than 74 percent of all electricity generated.
Most of it came from hydro-electricity generation "but reliance on high levels of hydro can expose us to issues of security of electricity supply," he said.
"Last year we saw 800 megawatts of new generation consented - 45 percent geothermal, 40 percent wind and 15 percent hydro... and we have the potential to do even better," Dr Smith said.
NZPA