Meridian Energy Limited has halt development of its 260-MW North Bank hydroelectric project, the New Zealand-based renewable power generator said.
Meridian announced the controversial US$840 million plan in 2006, which included the construction of a 21-mile-long tunnel along the north bank of the Lower Waitaki River.
The project was granted four water resource consents by Environment Canterbury in December 2008 which would have allowed Meridian to divert, take, use and discharge water from the Lower Waitaki.
The decision received several hundred appeals from land owners and environmental groups concerned by the project's impact, however, before an Environment Canterbury-appointed panel upheld the earlier consents.
This second round of consents were subsequently appealed in the Environment Court of New Zealand, which in turn granted an interim decision allowing Meridian to begin geotechnical investigations for land-use consents in September 2009.
The geotechnical work caused the company to revise its original tunnel plan to include an 8-mile long canal section in its center, though Meridian was still optimistic that construction could start in 2015 with completion before 2020.
Meridian now says New Zealand's stagnant market is to blame for the latest delay.
"We've made a decision to suspend the land negotiations because of the current flat demand for electricity, which means fewer new generation projects will be required in the short to medium term," Meridian CEO Mark Binns said in a release. "As a result, further work on land access is being suspended."
Binns added that the company could reconsider resuming work on the project once market conditions improve.
HydroWorld.com reported in May 2012 that Meridian had also backed out of the 100-MW Mokihinui hydropower project.