The 44 megawatt gas-powered station provides electricity and steam for Fonterra’s nearby dairy factory, with surplus power sent to the grid.

Contact said the station will close in June 2023, when its current supply agreement with Fonterra expired.

The dairy giant would acquire the plant’s boiler to be used beyond next June, but the gas turbine at the power station would be retired.

Contact chief executive Mike Fuge said closing Te Rapa was in line with the company’s strategy to decarbonise its business and the country.

“We are committed to ramping up our development portfolio to help meet the anticipated demand for renewable electricity, complemented by reducing our portfolio of thermal assets.”

The closure would reduce Contact’s long-term carbon emissions by 20 percent or 200,000 tonnes per annum.

“The gap in generation created by the closure of Te Rapa next year will be replaced by new, renewable generation that is set to come on stream over the coming years,” Fuge said.

Contact had 16 people working at the Te Rapa station.

Fuge said it would be business as usual until the site closed.

“After the power station closes, there will be some opportunities for people to move across to Fonterra’s Te Rapa team or be redeployed elsewhere within Contact.”

But not all the jobs would be guaranteed.