The Environment Court has given Solid Energy consent for a hydro-electricity project in Buller.
In 2010, the energy company's application was turned down by commissioners acting for the Buller District and West Coast regional councils.
Solid Energy now has the opportunity to use water from its Stockton Mine to produce about 195 gigawatt hours of electricity each year - enough to power about 24,000 homes.
Solid Energy says the scheme is good news for the community, as it secures the supply of locally generated electricity.
In 2010, TrustPower was given consent to build a hydro scheme from Arnold River further south.
It expects to start construction this year, and that scheme could supply enough electricity for about 27,000 homes.
Another West Coast hydro plan by Meridian Energy will be heard in the Environment Court in July this year.