The proposed $1.4 billion 630-megawatt wind farm by Meridian Energy, New Zealand's largest electricity supplier, would have produced enough power to supply all the households on South Island, representing a population of more than 1 million.
The first stage for the development, dubbed Project Hayes, planned for the inland Central Otago region of Southern New Zealand, was for approximately 150 megawatts, with Meridian building more turbines as demand increased.
"Despite the potentially large contribution of energy to the national grid, it would be inappropriate to put a huge wind farm in such a nationally important natural landscape," the court said in its potentially landmark ruling.
It said there were other alternatives to the proposed site and chided Meridian for not producing more information about them.
Scenic Central Otago, with a population of about 17,950, is a major draw for tourists. It features mountain ranges, rocky gorges and vineyards. The prospect of 176 wind turbines towering 160 meters in the air and the accompanying 12-meter-wide access roads needed for the project stirred up opposition from local residents.
"This has the potential to create a far greater loss for all of New Zealand by hindering the development of other renewable energy schemes," said Fraser Clark, chief of the New Zealand Wind Energy Association. "New Zealanders value renewable energy, but this decision has the potential to make it more difficult for other renewable projects to achieve consent."
Central Otago Mayor Malcolm Macpherson said the ruling "might set one of the most important precedents for Central Otago, Otago and New Zealand," he told the Otago Daily Times. "I wonder whether this is the end of big renewables of any sort, in this part of the country, at least."
It's a setback, it's a disappointment," said Meridian spokesman Alan Seay. "We'll be going through the decision in some detail and look at our options once we've done that."
Energy analyst Brian Leyland, who presented evidence at the court hearing, said that wind power is costly and does not solve the region's energy shortfall. He pointed out that the wind in New Zealand blows least in the autumn when it is needed most. In spring, Leyland said, the wind is stronger, but that's when the hydro schemes kick in because of melting snow.
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