Genesis Energy has announced its plan to decommission the last two coal-fired power units at the Huntly thermal power station in Waikato, New Zealand by December 2018.

The decision to close the units comes due to plunging demand and reduced cost of renewable power, it noted.

The company said that the closure of the two units is expected to offer up to $25m of operational and capital cost savings per year and would help in ending large scale coal-fired power generation and associated carbon emissions in the country.

Currently, the Huntly power station is operating two older 250MW dual coal fired units and two modern gas turbines of 400MW and 50MW.

Genesis Energy chairman Dame Jenny Shipley said: "New Zealand’s changing electricity market has seen improvements in the management of dry year events, along with a significant decrease in coal-fired generation, and by 2018 the two coal units will no longer be required unless market conditions change significantly."

Genesis Energy CEO Albert Brantley said the company initially proposed its plan to decommission the four coal/gas fired Rankine units at the power station in 2009.

Brantley said: "The development of lower cost renewable generation, principally wind and geothermal, investment in the HVDC link, and relatively flat growth in consumer and industrial demand for electricity have combined to reinforce the decision to retire the remaining Rankine units, which will deliver further operational efficiencies to Genesis Energy."

The power plant will however continue to generate electricity from the two existing gas-fuelled units.

The coal supply contract with Solid Energy for the units is set to expire in June 2017.

The closure is also expected to contribute to the country’s aim to generate 90% of its power requirement from renewable sources.