pillar commercial 3


A lot happens between when a raindrop falls on New Zealand’s Central Plateau and when, 425 kilometres later after flowing down the Waikato River, it enters the Tasman Sea. Along that journey the water contributes to diverse ecosystems, it is enjoyed for recreation, and some is diverted for drinking water not only for people in towns along the way, and the city of Hamilton that it flows through, but for New Zealand’s largest city, Auckland.

Commercial Tracker 2A

From Lake Taupo the water also drops just over 350m to sea level: Slightly more than the height of Auckland’s Sky Tower. That’s where Mercury comes in: harnessing the energy as gravity exerts its force on that water.

Mercury’s hydro generation on the Waikato River can be traced back to the commissioning of the Arapuni Dam (1929), with the ninth and final station commissioned in 1970 (Maraetai II). The Waikato Hydro system feeds electricity to the national grid to meet around 10% of the New Zealand’s electricity needs. The hydro stations, along with our geothermal stations, are also the commercial backbone of our business. Over the past five financial years, hydro has contributed 58% of our total generation. With a view to our overall ultra-long term sustainability we understand our duty of care to this critical infrastructure.

This year our multi-year, multi-million dollar reinvestment in the Waikato Hydro scheme passed several milestones, including completing the successful upgrade of the first of three units at the Aratiatia hydro power station.

The 78MW Aratiatia station, 13 kilometres downstream from Taupo township, was commissioned in 1964. The Aratiatia Rapids above the station, which have functioned as the dam’s spillway since commissioning, are rated as one of Taupo's top tourist sights, showcasing a fraction of the power harnessed by the station's three generating units. From the beginning, extra work and innovation has been needed to optimise the station’s output.

Paul Betschart, Lead Engineer to the project, has been with Mercury for 10 years, and joined the Aratiatia upgrade project in 2015.

“We’re at the point now where a lot of the original equipment has given all that we could have expected in terms of service life,” says Paul. “Replacement of parts was identified as the best way forward for reliability, risk avoidance and efficiency.”

Improving the station’s long-term performance and sustainability motivated the way the project was implemented. The overhaul focused on the huge machinery that harnesses the energy from the water, turning it into mechanical power and then electrical power. After over 50 years of innovation, tweaks and fixes, the project’s aim is to safely restore and reconfigure the station to deliver maximum value from current and expected future operating conditions. This has involved some very creative approaches.

Paul explains: “The generators were getting more prone to faults. That can cost us generation time. The governors that control the speed and output of the turbine (like setting cruise control on a modern car) could be updated with new technology. And the turbines themselves, the spinning water wheels and all the equipment around them, were also in need of attention.”

“I selected my degree at university knowing that I was interested in science and engineering. I joined Mercury as a graduate, and now I’m a Senior Engineer on our hydro power stations. I’ve been here 10 years and I can’t think of anything else that I’d rather be doing.”
Paul Betschart
Lead Engineer

Long term, commercial thinking led to the decision to replace one of the station’s three turbines with a unit specially configured to run at a lower rate of water flow than that sustainable with the old turbine design. This means water use can be optimised when low station flows are required, while still retaining over 90% of the maximum power capability of the old turbines and also delivering a significant increase in energy conversion efficiency. It was decided to defer investment on replacing the other two turbines until 2036, with this long date giving Mercury additional flexibility in its long-term planning.

Effective modernisation and enhancement projects take time.

The contract was awarded to partner Andritz in October 2015, two years of assessment, planning, design, testing and manufacture before the installation of components. Paul and other team members worked with Andritz in Austria to discuss the preliminary design. Manufacturing took place in foundries and factories across the globe: Austria, Germany, China, Czech Republic, Hungary, Italy and India. And once manufacture started the quality assurance process started too.

“This is mechanically and electrically stressed equipment. Safety and performance depends on the design, the materials and the execution. We had reviewed the design, and then we reviewed the materials and execution,” says Paul.

Raw performance in terms of megawatt (MW) output is guaranteed in the contract. A lot of the work throughout the design, manufacture and installation of the machinery goes beyond output, however, Paul says. It’s about long-term performance, making sure this plant will run as long as possible, be easy to maintain, be safe and be as reliable as possible.

Paul explains: “Our project partners are on the same page and focused on delivering a quality product. But we, as the Mercury project team, own the longer-term view. We understand what we want as a whole plant, over a 50-year life. Sometimes our experience and our preferences lead to a different approach. But it was all about teams working together to get the best outcome.”

Installation of the first unit, G2, began in October 2017, with return to service completed in June 2018. Turning the unit back on was itself a month-long project. “Commissioning is pretty full on. It’s both very well planned and managed, and at the same time there’s quite a lot of initiative required when you deal with issues in real time.”

The three-year installation project means there’s not a lot of time to pause and contemplate the progress so far. Each of the three units to be overhauled takes around six months. Balancing complex commercial, consumer and country imperatives mean these stages are timed to avoid having machines out of action during New Zealand’s winter energy demand peak, while working with scheduled maintenance of other stations on the river. Parts for Aratiatia’s next unit to be overhauled arrived in July for assembly. The G1 generator with its new optimised low-flow turbine is scheduled to return to service May 2019, and the final unit, G3, will start its overhaul in spring that year.

“Commissioning G2 was a huge milestone,” says Paul. “Most of us were looking forward to some downtime to recharge. But everyone’s keen to take what we learned and apply it to the next two units.”

The outcome is a well-planned, safely delivered project that returns the generating units to operational service with optimised capability incorporating appropriate technology, resulting in longterm reliability and sustainable operations at Aratiatia for many years to come.


The Aratiatia upgrade project is supported by Mercury teams from our Taupo, Hamilton, Rotorua and Auckland offices. An extra 40 engineers and other specialists will call the Taupo District home while they partner with us on this project, and around 20 businesses in and around the Taupo area supply painting, transport, welding, engineering, machining and catering services. There have been no notifiable incidents.

commercial asset 6

commercial asset 7

commercial bubble 4A