By Gareth Vaughan
In 2005 Earl Bardsley wrote an article published in the Journal of Hydrology highlighting the possibility and potential of a pumped hydro storage reservoir at Lake Onslow in Central Otago.
Fifteen years later Energy and Resources Minister Megan Woods announced $30 million had been allocated to develop a business case to tackle New Zealand's dry year storage problem. This is mostly focusing on a pumped hydro storage project at Lake Onslow.
Bardsley, Honorary Associate Professor at Waikato University's School of Science, talks about the Lake Onslow pumped hydro concept in the latest episode of interest.co.nz's Of Interest Podcast.
Should it go ahead the scheme would be a massive public infrastructure project taking years to complete, impacting the local environment, and costing billions of dollars. Effectively it would involve storing energy like a battery, Bardsley says.
Water would be pumped up to a high elevation from the Clutha River and stay there until it's needed.
"So the energy is stored in the form of gravitational potential energy," says Bardsley.
The potential volume of water held, the capacity for generating electricity, and the actual energy stored would be massive. And the project could have a major impact on electricity supply and prices.
"I think the key selling point would be that it's an enabler to get rid of fossil fuel power generation, and secondly more than that it's an enabler of the green transition. So we can actually go ahead and move into EVs, maybe green hydrogen, because it's just not obvious to me that there are other mechanisms around by which we can actually do that," says Bardsley.
Part of the NZ Battery Project under the oversight of the Ministry of Business, Innovation & Employment, advice on technical, commercial and environmental feasibility studies of the Lake Onslow option is scheduled to be provided to Cabinet in December.
There's more from Bardsley on the Lake Onslow proposal here.
235 Comments
Viable in which way?
Financially, we are already well over the edge; too much debt-overhang (not to mention pension expectations) already.
So the only valid question is: Will this be seen as a valid move from the vantage-point of, say, 2070?
The answer - sadly for me, as I have run on micro-hydro for 15 years and love the technology - is probably: NO.
This will be a commitment of our 'last heave', surplus-energy-wise. It should only be done when we've ascertained that, beyond fossil fuels, we can even maintain the existing grid. It should also only be done, after we've ascertained whether anything even remotely resembling BAU (go out on the highway and count the trucks... all carting stuff for consumption/discarding, all fossil-driven, fossil derived) is a valid target. I think Admiral Rickover - no slug energy-wise - was right; expect to be doing about 15% of current activity. So what and whether cities? And what/whether the stuff we (wrongly) call ' work'?
I'm coming to the POV that we will be better with a lot of smaller schemes (water-at-height is indeed the most benign battery, storage-wise) spread up and down the country. Not as efficient on paper, perhaps, but far, far less vulnerable.
And probably more cost effective to implement to.
I can't see this as being anything other than a huge money grab for whoever is awarded the contract. These huge projects have a way of going over budget when it's the government involved.
Personally, I'm all for interconnected micro-grids (was even going to do a phd in it, but alas, study doesn't feed children).
My husband's father was an engineer working on construction of the Manapouri scheme all those many years ago. Like this scheme, I suspect folks back then thought it bigger and more complex than anything done before. They way I look at it - Megaprojects - are better done earlier, rather than later. I guess what could happen to this one, if started could be disrupted through total collapse of the monetary/exchange system as we know it today. But, I suppose the last thing we should give up on is ambition.
But leading up to Manapouri, the birth rate was a fair bit higher than today. Since those times, it's been falling.
https://ourworldindata.org/fertility-rate
What's the plan? (IMO,I don't think there really is one).
Kate - The idea is practical if there is a surplus of unused energy say at night which currently there may be but as general useage increases and more EVs hit the roads that surplus will diminish and disappear over time - Trawfynnd in Wales works because Nuclear is run flat out so the nearby station almost always has excess generation - will NZ ho Nuclear - long term probably. There are other solutions which our Govt experts either don't know about or are ignoring on purpose.
@PDK. The engineering concept being viable. Bit like Transmission Gully (you should come up for a visit and drive it!) I was part of the 'just build it' brigade for over 30 years! Now it's there - It's a wonderful asset. No time like now for the 'right' kind of infrastructure.
Sorry Kate - Transmission Gully is to facilitate cars, and is presumably paved with bitumen.
I don't call that an asset - from our grandchildren's perspective, I call it a liability. Why did all those folk think they needed to squander energy on a daily basis, to do what, exactly? They'll think us nuts.
Make some time to listen to Nate Hagen's The Great Simplification.
Go well
Yes, but it is a far more resilient route than the coast road will or ever would have been. Old SH1 had no alternate route aside from heading to Welly via the Wairarapa - and don't forget there's no Manawatu Gorge these days. We'll always need a means of passage whether by car or teams of oxen!
Interestingly, a month or so ago with all that rain, a slip on the old SH1 at Pukerua Bay closed the old highway for over a month - such a big slip they even had to re-track some of the rail above;
Financially viable? Possibly, under edge case scenarios.
Best option? Hardly
What is viable is fossil fuels. Period. Cheap, plentiful, reliable and great energy.
All you catastrophists want to do is replace nearly all our existing energy systems with expensive intermittent sources like wind and solar, or whatever else you can dream up.
Fossil fuels have made the world a far better place to live and will continue to do so. Drill baby drill.
CS - think it through; energy underwrites money, 100%. No energy = no work. No work = nothing done, nothing produced. And money would then be worth? Nothing (well, you could trade existing stuff for ever-bigger numbers, but you couldn't buy anything new).
Thus we should be counting in calories or joules, not dollars.
But I tell you what (and I've been off-grid longer than anyone here, I'm guessing); renewable energy will never build renewable energy (the EROEI is too bad), so don't expect them to be 'cheaper'. They're more correctly rebuildables, than renewables.
And we've burnt the best half of the fossil energy; it's gone already.
Fracking, digging deeper, exploring that is why known reserves continue to rise. Gotta give it to the yanks, the more fossil fuels you consume (and they are abundant), the better your life, cleaner your environment (needs work), people live longer and enjoy a better standard of living. Keep fracking, who knows oil may keep replenishing.
Bollocks.
In 2019, annual production was only 2 million tonnes — 150 times lower than the 1913 peak
And you fail to mention: at what rate rate of usage.
So an invalid post - can you tighten it up please if you're going to contribute? We're kind of wasting time at that level.
That was the UK Govt estimate when the last mine was closed and probably based on use at the time, currently less coal fired stations so probably longer than 1000 years at current rates. You missed the point in that there is a readily available supply in UK & NZ but produces CO2 so surely the effort to find a cleaner way to burn like Fluid Sand combustion deserves investigation unless you want NZ to powerdown whilst we argue until the lights go out
No discussion is occuring on the better alternative.
Distributed generation being one.
For example I already generate 2 - 3 times more electricity than I use. In our rural road of 30 houses, using our batteries, including the cars, together in a groupusing the right IT we could be mostly self sufficient, giving the national grid much more even load than now. With minimal stress in the bad years.
And with the smaller groups combined into larger systems problem is solved.
We need to set up the right IT, and legal systems to do this. And it's cheap.
Instead we we get another big corp setup with overcharged captive consumers.
Onslow is a much more price effective battery that whatever you have.
The storage of Onslow is equivalent to something like 30 Tesla power walls per house in NZ, and would cost $1 trillion dollars to replicate with power walls.
Your idea is reasonable, but much easier if we centralise the battery in Onslow.
Ah, but you forget. I send 2-3 times more units out the gate than I bring in.
So what does that mean? 1. Every spark that goes out keeps a litre in Pukaki. 2. In these dry years I am not the drain on New Zealand. Quite the reverse.
Now, work that that out if 50% of NZ houses did similar. No national issues supported by the valuable big gen we traditionally have built.
Actually it's not about the storage, it's about the generation. I don't really need the battery. But got it to keep us in operation at the zombie apocalypse. (joking about the zombies, more like a national collapse induced by Grant Afterpay Robertson)
50% of houses putting up solar panels at $10k a pop would cost double the price of Onslow, about $10 billion. You'd have to repeat that cost approx. every 25 years as panels reach the end of their life.
Better to spend half on Onslow and build balanced generation with the rest (geothermal, wind, solar both grid scale and residential). Less requirement to overbuild generation if you have a mix of sources - your 'big solar' solution would require an awful lot of generation that would sit idle for most of the summer and run most of the winter.
In the same way that your household needs a battery to efficiently use solar, the country would need a battery if we were to go heavily for solar. The generation does not match our consumption which peaks in the morning and evening.
Solar can only ever be part of the puzzle unless it is coupled with an enormous battery, and Onslow is the best battery option we currently have. In fact, it probably isn't even enough to buffer a million rooftop solar installations - you might need Onslow and a bunch of other short term storage to make use of that peak load.
It is about both. The government's main driver at the moment is the dry year problem, but the daily smoothing allowing massive renewable over-build is how it will actually make an income. Very little money to be made in buying electricity and holding on it to it for 5 years waiting for a dry year.
In a normal year, I'd expect Onslow to be a net-accumulator of energy but with big daily (or weekly, monthly?) swings as it buys electricity when it is cheap (surplus) and sends it back out when it is expensive. Beautiful system.
2nd hand batteries are everywhere; every ICE vehicle carries one, many carry two. They may be past their best, but their build-energy has already been sunk - might as well use them. And weight doesn't matter in static applications. We haven't bought a new battery in over 20 years off-grid.
Otherwise, if the chips were down I'd dig a pond uphill, one downhill, use an old-school windmill to do the pumping, and a micro-hydro on the drop. Topography (as with Onslow) is everything.
Re your second comment ------- get out! :)
Very very standard rooftop solar fluffy. Aided by that we live in a low using electricity house. (again not an unusual structure) and in Central Otago sunshine hours.
But the real point of my post was combining into units so as to level the bumps by sharing the storage. Needs IT and legal structures.
For this to work, it needs everyone to invest in a battery (home or car). This is a hugely expensive exercise for the amount of energy returned. To use li-ion instead of pumped hydro increases the cost 1000x for the same level of output.
If you want to use your EV for this, then then wear on the battery will cost more than you make selling the electricity.
Most power consumers don't live rural and therefore don't have the land/roof area for generating their own energy. If everyone lived rural and could generate their own power, we would have another stack of infrastructure problems, namely needing to build massive highways to get them to work etc. Which would mean more time spent in cars for all.
Blobbles - no, you make the classic assumption; work.
Ask yourself what it is? What it will be sans fossil energy?
I see much less-to-no travelling. And none of the surplus-energy-supported nonsense folk do in cities (mostly sitting in front of screens tapping keyboards). Most folk will be involved in local food-production.
Bobbles: Most live urban and do indeed have adequate rooftop. What were you thinking.
For the very few who live in high rise apartments there is always that big flat industrial rooftop down the road.
The point of my post is we lack mainstream structures to make such setups possible and easy. And free us from being captive and overcharged by big corps.
Not all and if you are generating enough for your neighbours too then you have a lot of roof and are likely facing the right direction without shade. I would hazard a guess that there aren't that many houses that fulfill all these criteria. I am a big fan of solar and want to put it on a new house we are building, but after talking to the installers, it isn't for every house and even ours is going to be marginal.
Then even if everyone can generate enough for themselves, they also need a battery (max load is after the sun goes down during winter and even during summer at poor generating hours). But do they also have the means to pay for a solar and battery installation too? And then what happens when we have a winter like we just had? They all need to take power from the grid as their solar isn't cutting it, which means the grid still needs to be able to handle peak load from all households. And if the grid is to handle peak load, then you may as well build a peak loader or a shared battery, which would support all forms of renewable, not just rooftop solar. It would be simpler to operate for a small country rather than a few thousand different interchanges for electricity to be shuttled around the country, we could more predictably use the green energy and pump or drain the pumped hydro lake. And it's probably as efficient (if not more so) than all the households having inverter/battery combinations, given the losses and complexity.
Thanks to the wonders of a centralised grid, I have no electricity bill for running my house and EV. I have roof top solar that sells back to the grid enough to cover all my energy bills. (I have no gas or wood - all electric).
It's much cheaper to reduce your energy usage or add more solar panels than add a battery.
For me, the biggest unknown is how it will integrate with the existing players in the market. Who owns it and how it is operated to affect prices will result in yet more layers of pseudo regulation and complexity.
If the whole lot was nationalised then it is a no brainer.
We still own over 50% of the generation capacity, from the major players, I believe. Agree though, its the implementation with current market mechanisms and additional regulation (which will be required) which will shake things up. Hopefully our energy companies will have to run more competitively if they get this stuff right.
When InfraCom NZ was announced, I assumed there would be a multibillion dollar investment portfolio allocated to the agency to fund key infrastructure projects.
ICNZ turned out to be just a policy & planning shop, much like the agency across the Tasman used as the benchmark. However, Australia has a considerably larger funding network than NZ, including state governments and not-for-profit super funds.
So NZ will continue to rely on elected officials to have the risk appetite for funding complex projects that will likely be completed under a different government. Tell me if that doesn't smell funny to you.
You didn't read my comment upthread?
https://thegreatsimplification.libsyn.com/energy-blindness-frankly-by-n…
Money is merely a proxy. Ask yourself what for?
Then keep asking..... :)
OK, so do you propose that they overbuild? And have renewable plant sitting around doing nothing most of the time?
I can imagine what our power bills would be like if all power companies did that. The bills would have to be set whereby the power companies which have these unused plants, still get a good rate of return overall.
Also, once oil/gas/coal plants are gone, the market clearing price will be set with project finance/ maintenance costs being the required rate of return. It may be no cheaper than the fuel costs of old. Imagine what those would be for Onslow. If it is hardly ever used, sure it won't have much in the way of pumping water uphill costs (which actually will make power in NZ more expensive in itself), but it would have all sorts of rate of return financing costs to recover.
No way is this going to be cost effective. If approved, it will be a political decision. Just like the Ak train tunnel project was.
why do you think Onslow would be hardly ever used? I imagine it will be used constantly. It will take midday solar and deliver it in the evening peak. It will take excess wind and deliver it when the wind aint' blowing, and it will massively arbitrage day/night rates. Depending on the generating capacity they install at the bottom, it could even eliminate the generation cost contribution to peak day/night rates (You'd still have transmission/distribution network peak charges).
One has to spend money to see if one needs to spend money. My concern is the report would be engineered via models to show a goer. Any report on it would need to be carefully reviewed and not by politicians. Too easy to pull the technical wool over their eyes. I don't know what Nationals view is but I suspect Labour are using dry years because of their belief in man made CC and so the need to justify Onslow on that basis. I'm sure there are alternatives to Onslow that haven't been examined nearly to the extent that Onslow is being investigated.
Also look at the composition of the board . At least two political appointments. Amanda Larsson, Lead Climate and Energy Campaigner, Greenpeace (2017 – present).
Isla Day Member, Wellington City Council Environmental Reference Group (2019 – present) Founding member, School Strike 4 Climate New Zealand (2019).
Hoani Langsbury Ngāi Tahu and Te Rūnanga ō Ōtākou Former Chair, Otago Conservation Board (2005 – 2010)
Could be another brown elephant. As people have said the ever growing home solar and wind systems will probably bring New Zealand into spare capacity. Imagine if there were subsidies available as well!!!.
Meanwhile Rio Tinto either puts up with a true market price for its electricity or its used to make green hydrogen, a product which will be in as much demand as oil very soon.
Hydrogen-powered trucks apparently. Hyundai is producing hydrogen-powered trucks and Hiringa is planning to use the existing gas infrastructure to move green hydrogen around and pump them into the vehicles.
Fonterra has signed up to trial this on a small scale with their raw milk collection fleet.
NZ Post, Fonterra launch alternative fuel trucks | Stuff.co.nz
Correct me if I am wrong.
This uses energy to pump water up hill. When it come back down gain it generates energy....but less than what it took to pump it up there in the first place.
So the gain is a 'timing' issue re use of this energy?
Seems more like a waste of energy to me and far from green.
What can we learn from France exactly? Nuclear in France is falling apart. https://oilprice.com/Energy/Energy-General/France-Prepares-To-Nationalize-Its-Struggling-Nuclear-Industry.html
Choose your poison carefully What are the safest and cleanest sources of energy? - Our World in Data
Also, per unit of energy, coal emits 100x more radiation than nuclear. 43035329.pdf (iaea.org)
I have heard the same. Most reactors are 1GW which is just too large for the country - we would struggle to provide the backup to stop us having blackouts every time the reactor or the lines running from it have a fault.
If and when smaller reactors become proven tech we should absolutely look into them for baseline generation.
"The low-, intermediate-, and high-level waste stream characterization presented here reveals that SMRs will produce more voluminous and chemically/physically reactive waste than LWRs"
Using it on a daily basis doesn't affect it's capacity. pump up off peak, generate on peak, at the end of the day the water level is where it was at the start.
The capacity could fluctuate a fraction day to day and week to week depending on wind and solar production, but across a whole season that should even out leaving you most of the capacity for dry year insurance.
The dry year problem is really only a dry winter problem - that is the time when NZ experiences peak electricity demand. Onslow if built can buy up excess summer solar production to increase its storage capacity for a potential dry winter. Onslow because it is a seasonal storage battery will improve the economic viability of solar in NZ.
Economic viability is not a valid measure, at this point in the global ponzi.
Energy viability, though, is everything.
15-20 years ago, Onslow was a no-brainer. Now, I'm not so sure. I'm not even confident we will hold the grid together, sans fossil energy arriving on ships. And that system is dependent on 'others', in many senses of the word.
When you have excess hydro and wind generation, then Onslow can buy that renewable generation at a low price (but at a higher price than it could otherwise be sold at) and then release it at a higher price when there is a shortage of wind or lake storage. Yes there is a net waste of energy from pumped storage but it smooths out the peaks and troughs that renewables typically create.
The trough when the wind isn't blowing that night and the hydro lakes are low because it's been a dry year. And to top it off more and more EVs are plugged in for charging.
And no I would never allow my EV to put electricity back into the grid to smooth short demand peaks because it would cost more for wearing out the battery than they would likely pay.
Onslow would allow us to massively overbuild our cheapest generation options of wind and solar, and manage their main drawback of intermittent generation.
The added benefit is Onslow will provide a willing buyer of electricity even when all the generation is pumping - at the moment when wind is generating too much, the price paid is lower due to basic supply and demand. Onslow will put in a floor price (and a corresponding ceiling price as it will step in and generate when needed)
Wind power and Solar power will in the future potentially generate energy in excess of what the national demand is. How do you store the excess energy? Pumped Hydro is one solution. You can either store 80% of the excess energy as water held at altitude or you can waste the excess energy.
The price of this wind and solar excess energy is wear and tear on the wind turbines or use of the solar panels.
If the ownership structure is a majority state owned company then the state has the option to lower prices when energy becomes overly expensive, enable the changeover to renewable lower carbon energy modes as well as saving foreign currency reserves for New Zealand's other import requirements.
If the pumped hydro works, and I've seen articles on examples at La Muela
https://www.hydropower.org/news/iberdrola-leading-the-way-on-the-energy…
then it's a good idea.
Overview of pumped hydro options and effectiveness in a New Zealand context
https://m.youtube.com/watch?v=HkaV2BB1T58&feature=youtu.be
Lake Tekapo pumped hydro could be better than Lake Onslow for far less public investment, assuming Meridian and Contact were legislated to volunteer their dams at the top and bottom of the pumped hydro scheme.
This pumped hydro option could possibly reduce the dry year scalping if their majority shareholder (govt) was more assertive, but it wouldn't be popular with short term shareholders
I hope they consider the fact that we could all have big batteries plugged into our houses soon. Storage of electricity might not be an issue given the right economic incentives. If my car is sitting at home 100% charged and they will pay me a decent rate to get their electricity back at peak or during shortages then I’m sure to oblige. Or alternatively I could choose to power my house from my car and lessen the peak demand if electricity is priced correctly.
I guess the question is whether we need this to balance peak demand or for dry periods.
Also a good case for just bringing on more renewable energy sooner, spending money on this rather than huge amounts on pumping water uphill.Total demand for energy is unlikely to decrease, so spare electricity to pump water uphill may be rarer than you think, especially in prolonged droughts.
I agree on premise, and I too think energy storage is the way of the future, however putting the expectation for consumers to get their own energy storage simply won't work unless the cost/benefit is worth it for consumers or the government incentivises it by means of subsidies like they did with the healthy homes and subsidising underfloor insulation etc (my brother got his underfloor paid and installed free thanks to a community services card). I would love to see advancements in wind generation for places like wellington where folks could simply anchor one into their house and store the energy from it, however noise is the downfall in that area which hinders it's adaptability to the city.
Before we consider plonking a nuclear plant upwind of your place we should be reducing the demand and vast amount of electricity wasted.
Anyone who lives off grid soon learns to be careful so they don't run down their batteries needlessly. The amount we use now is a third of what we used when we were ongrid in town, and would give a bill of about $40 a month plus the connection fee. Hot water is solar/wet back, passive solar/thermal mass and logburner for heating the house, gas and/or woodrange for cooking. All electrical items especially fridge and tv are selected for their efficiency and durability.
It's really, really high, that's why it's a good place for a battery. Aqueducts basically wouldn't be possible to it, unless we also do the Manorburn Dam in the same range which is nearby (and I think in a better position than Onslow, closer to Lake Roxburgh), or the Loganburn on the other side (which is more of a shallow pond when I have been up there). Both would require a lot more work up there.
Rainfall at Lake Onslow is about 0.6 metres per year and lake evaporation will be a little more. We estimated an upper bound of 1.5 cubic metres per second for additional water that would need to be introduced to an expanded Lake Onslow to maintain the mean flow of the Teviot River flowing out of the lake. This would come from pumping a little more water up than comes back down, with perhaps some winter water being diverted by gravity flow through a short tunnel linking to the Taieri River. Our paper was published earlier this year.
I would really like to see some engineering and economic figures to see how this would work out. My questions are:-
1. Where is the power that is going to be stored being generated
2 How much renewable power is wasted with the current arrangement.
3. What is the break down of the different sources of this wasted power
4 How well is the generation managed at the moment so that renewable power generation is minimized.
5 Has any work be done on a proposition to build a pumped storage system between Lakes Wanaka and Hawea. They are very close at the neck and there is a significant head difference between the two which could be increased by raising Hawea a bit. It's capacity is no where near as much but it would be a lot cheaper and may be a useful and relatively fast starting point.
6 Who is going to own and operate it. I believe that the present incumbent generators should definitely not. I thing it should be run by either Transpower or a separate government entity. It should be run something like the Resereve Bank with the power to trade in the electricity market and perhaps offer the facility to store energy for other parties for a fee.
7 Given that wind and solar power are volatile. How much of each can we add to the present system and still manage to avoid significant wastage. How much extra solar and wid generation could we add if we built this project.
With these and probably a bunch of other questions that I have missed, what configurations and economic scenarios are economically viable.
Can you really cool the earths core by installing geothermal plants? I think the scale you are talking about is off the charts, not currently human effort achievable. And we wouldn't want to anyway, I believe our magnetosphere which protects our atmosphere from being blasted away (see Mars) would be under threat. Wait, is this a joke?
Here's a high level engineering view, and some commentary on the economics too
I'd be more in favor of rail storage over pumped storage. Storage could be closer to generation and distribution assets, distributed across the grid with greater redundancy, reduced demand from HVDC inter-island link, higher energy density, less geohazard risk, lower greenhouse gases, and increased efficiency. Just my 2c as an Electrician/Electrical Engineer/Mechanical Engineer.
Rail storage could be great as a sustainable alternative to a big battery in the North Island. The relative economics might turn out to be good too because Contact Energy has recently cancelled its intended big battery because of rapidly rising world costs for the materials. Possibly the best location for rail storage would be the lower southern slopes of Mount Taranaki. This provides about 20 km of gentle slope between the park boundary and the sea, with 500 metres of elevation difference. It wouldn't be an Onslow alternative though because there are multiple orders or magnitude difference in the respective energy storage amounts.
There is the existing railway lines that could be used. The Raurimu spiral is already electrified , ready to go . Otira tunnel too . The rotorua branch could be reinstated , with storage helping to pay the costs .
there is also some talk of using abandoned coal mines , i don't know if any in NZ are that deep .
Is Onslow scalable ? Is there an option of a mini Onslow?
Rail storage? Is this an uphill railway to nowhere type thing with regenerative braking power generation?
I have an idea. If it is such a thing, how about have it as a weight loss retreat. Overweight people walk up the hill and have a free trip down it on a daily basis!
If constructed, Onslow pumped storage would not produce any increase in transmission loss to anywhere in the North Island. Also, it would be energy-positive due to reduced spill loss. From the link in the article, a file can be downloaded giving more detail on common misconceptions.
Hi Earl, are there any responses to the engineering and economics concerns raised in this? https://m.youtube.com/watch?v=HkaV2BB1T58&feature=youtu.be
MBIE have evaluated the need for a dry year buffer of 5 TWh of additional hydro power energy storage capacity. That is, 5 TWh in addition to the (about) 4.5 TWh that we now have. Lake Tekapo cannot be considered as a 5 TWh alternative to Onslow because it would require raising the lake 50 metres above its present upper operating level. This would flood Lake Tekapo township and impose an operating range in excess of 50 metres on one of our most scenic lakes. It would not be a pretty picture at maximum drawdown. Lake Hawea would be even worse because the lake would have to be raised more than 100 metres. This would flood the Lake Hawea township and impose a lake operating range in excess of 100 metres.
Onslow would have an operating range in the order of 60 metres but, unlike Hawea and Tekapo, this would be over a bedrock shoreline. Hawea and Tekapo would be dustbowls at maximum drawdown if they were used for dry year backup.
Evaluating the energy storage potential of the Onslow basin does indeed require nothing more than elevation data pasted into a spreadsheet.
Simulating Onslow pumped storage operation is a larger task and was carried out in the Majeed PhD thesis. As the supervisor of that thesis, I guess I know its contents fairly well. The small Hawea / Wanaka pumped storage option was never a possibility for a dry year buffer, which is why it appears only as an Appendix in the thesis. Also, Onslow was not proposed as an alternative to the existing hydro storage capacity in New Zealand, which would certainly be a bizarre concept. Nor could there be any possibility of power being somehow shifted backwards and forwards between Onslow and distant locations. Rather, the thesis simulated how Onslow operation might enable better management of existing hydro lakes by avoiding both high levels (flood and spill risk) and low levels (unsightly mudflats). To do this properly would have required simulating the complex NZ electricity market. What we did instead was to impose a hypothetical rule such that the hydro lake levels were simulated as operating consistently toward always seeking a target level around the mid-point of their respective operating ranges. The simulations indicated significant spill reduction, sufficient to enable Onslow to make a net mean positive energy contribution. That is, effectively becoming a small power station as far as the national electricity energy balance in concerned.
Onslow operating in the electricity market would have a similar effect to our target levels. High lake levels mean lower electricity prices and lake water would be released to provide the power for Onslow pumping. For low levels, Onslow generation would take advantage of the high prices for generating so the levels would tend to rise.
Perhaps some of the readers of this post were impacted by the 1998 Taupo / Waikato flood. I suspect that they would have preferred not to have had that impact, despite being that told the flood was well-managed. The point is taken though with respect to the plotting of the Waikato River discharge data for Cambridge. We should check that data but the conclusions remain unchanged.
Far from costing millions to pump water up to the Onslow operating level, the Lake Onslow initial fill operation is most likely to return a profit to the Onslow operators. This is because it will not be a one-way water level rise. There will be times during the fill process when high electricity prices make it profitable for some of the water to be released back for generation. There will still be a net rise in the fill process but will be interspersed with falls to generate net income over the period of filling. The fact that Onslow is in a dry part of the country is irrelevant to this process.
It is true that most of the pumped storage schemes in the world operate over short time scales. For example, to cover daily fluctuating power demand in association with constant-rate thermal stations. However seasonal and longer term operation is not unknown. The pumped storage schemes in Norway operate largely in seasonal mode.
There is nothing inherently bad about pumped storage schemes operating in open loop mode (not using the same water twice). Water released from Onslow is not "wasted" any more than water flowing through the Benmore dam is wasted. In fact, the open loop nature of Onslow is an environmental advantage because low Clutha River flows (high power prices) will be augmented by water released from Onslow. Similarly, high Clutha River flows (low power prices) will be reduced a little by Onslow pumping.
The concern about northward transmission line capacity is no longer an issue. With the threat of closure of the Tiwai aluminium smelter, Transpower moved quickly to upgrade line capacity. The Roxburgh-Livingston upgrade was completed earlier this year.
The small streams flowing into Lake Onslow are certainly different to the large river inflows to the main South Island hydro lakes. That is, Onslow would be a "pure" pumped storage scheme as opposed to a pumped storage / hydro hybrid scheme. This is an advantage. Given the construction cost of Onslow, we would wish it to be operative for a very long time without the risk of silt accumulation from a large river inflow - as is occurring presently with Lake Dunstan.
Earl - MBIE?
I have promoted your study in a couple of magazine articles, and think this debate is important, indeed overdue.
But we are facing a Limits to Growth scenario, which will almost certainly mean that the financial system we have known - won't be happening. Indeed, whose currency is worth what vis-a-vis whose, and whose energy is worth what to whom, is falling out now. Which means all bets - and that's all that money is, keystroke-issued debt, which is a forward bet on the future availability of resources and energy - are off.
The measure will be whether stuff is maintainable - whether entropy can be parried - and has been triaged as to priority. The planet WILL fight over the remaining, lowering EROEI fossil energy; the only alternative is a collapse. How long can we maintain what? is the question. That eliminates BAU - including current peak demand - as a given.
MBIE are hell-and-gone from getting that; as are most siloed specialists..... :)
https://www.thegreatsimplification.com/
Does any of this come into your own thinking?
Thanks for the response. I understand the desire for extra storage, but I have yet to find any of the guidance documents for the 5TWh nominal storage size. Is there a reference or substantiationfor that value?
It seems suspiciously similar to 30 days' continuous power at 7GW load assuming no other generation to address the cold 1992 year. Or put practically relative to Onslow, 210 days at only 1GW continuous generation, with the rest of the power supplied by the other sources.
Big schemes seem reasonable when we're simply aiming for a storage number, but it would be great to understand that better.
Would the same effect be possible if there were smaller storage options than Onslow, but those facilities were cycled more often?
Let's please be pragmatic about lake levels. I'm not suggesting to raise lakes above townships
I see that the initial fill of Onslow to get the minimum level would cost $$$, but you're quite right that any additional fills to get towards maximum height could exploit the night vs day wholesale rate, but would need to have a large enough difference between the two such that it makes energy and market sense to keep filling.
One of the things that nobody has addressed here is the perverse incentives that tip the balance in favour of daily profit vs cold year resilience.
And demand reduction??
Hi makechange - regarding the 5 TWh requirement, the most useful document is:
https://www.mbie.govt.nz/dmsdocument/23346-update-on-the-new-zealand-ba…
The original dry year storage requirement was specified in 2020 as 5 TWh, modified in the above document to 3-5 TWh. It looks as if the NZ Battery team still has focus on at least 5 TWh given their current text:
"...we are specifically investigating Lake Onslow given its ability to store up to 5-7TWh for dry year support"
Storing even 3 TWh that is distributed around existing hydro lakes is either going to flood shoreline townships or create massive mudflats / dust at maximum drawdowns that would never be consented. It would be better to go the other way and use the large energy storage capacity of Onslow to enable Lake Hawea to be restored.
It would be difficult in practical terms to find sufficient new suitable sites with their own large upper reservoirs big enough and high enough to sum to the massive Onslow energy storage capacity. Each would have to be consented and each would have their own environmental impacts and requirements to purchase pump /generating plant. Cycling them more often wouldn't help with dry year reserve. NZ Battery may well put forward additional non-hydro dry year support as well as Onslow (if Onslow proceeds). Also, Megan Woods is on record as saying that she does not see Onslow as a single silver bullet for dry year security. Genesis has raised the possibility of a large new energy storage lake near the volcanic plateau. It will be interesting to see if anything more comes of it.
It could also happen that the more traditional small storage / large installed capacity pumped storage schemes will be constructed in the North Island for firming purposes in the absence of fossil fuels.
In the South Island, Tekapo / Pukaki pumped storage really is a non-starter, if for no other reason than one lake is managed by Genesis and the other by Meridian. If there is to be any small pumped storage scheme in the South Island, it is most likely to be Hawea / Wanaka.
There is no contradiction between daily Onslow operation and its dry year reserve role. Daily operation will just induce minor fluctuations in the water level. Onslow would not be ideal for short-term operation and would require a large surge chamber. However, if it is constructed then it should be used to its fullest extent. Keep in mind too that it is not just Onslow acting alone that provides dry year insurance. It would work in the electricity market by the existing hydro lakes being drawn down at lesser rates during low inflow times.
Demand reduction in the sense of electricity demand trending down is not going to happen in New Zealand. However, load shedding could play a supporting dry year role, as mentioned in the NZ Battery web page.
The one thing I get from all the comments I've read is that if we don't change the way we do things Onslow and any other big addition to our energy production is a waste of time. So much talk of peak loads and where we need it along with an assumption of the need to commute , all centered on BAU. What we need is a shift in lifestyle so we're not all getting home at 6pm or traveling 12km to "work". But society HATES change.
It's a Systems thing; society is set up to do what society does. So it will do it until it can't.
And when that happens - which seems to be happening now, globally - all other assumptions are moot.
Yes, we will change. Drastically. And 'the first one now, will later be last' - to quote the song....
Let's rough out a timeline for this. Start now.
- Consenting. It will be contentious, lawfared up the wazoo, would probably need an empowering Act to cut through the Gordian Knots. Say, 12 years. 2034.
- Construction. Lotta earthmoving if the dams are involved, loss of head if they are not. Lotsa diesel for the machinery, care to extrapolate fuel costs in 2034?? Say, 7 years all going swimmingly. 2041.
- Filling and remediation of leaks and of all the issues glossed over in the initial rush to Nirvana. Say another 7 years, SWAG based on a comment above. We are now at 2048......before many electrons get sent downhill....
That's way too late - as I said upthread, good idea 20 years ago, marginal a decade ago, not sure we'll even got to first base now.
https://thumbs-media.smithsonianmag.com/filer/Futurism-Got-Corn-graph-1…
Check the 3 inflections, right about now......
As I said upthread - in the face of a certain future that does not include BAU (this is a fact we must accept) - the last thing we should lose is ambition. Which is different than having a "hope" to retain our current lifestyle. But, also certain (bar nuclear holocaust or meteor strike), is that life itself will endure and my guess is that 100 years hence, more cooperative societies will emerge and endure.
As you've suggested, triage will become a large part of the decisions all societies will be faced with in future. I agree (for example, in 50 years time I imagine we would abandon the old SH1 between Paekakariki and Pukerua Bay).
But the fact is, that implementing triage (maintaining the essentials) too will require energy. Hence, my feeling that getting on with the investigation and proof of concept work on Onslow is the 'right' kind of infrastructure project to be seriously considering for NZ's future.
Good post. I was unsurprised that Earl avoided answering my question (I always fish to check, but techno-optimism tends to avoid).
The reality is that - as Dr Krumdieck used to point out - by 2100 we will be running on real-time solar (hydro being a solar derivative).
The reality is that we won't be making hight-tech renewable energy infrastructure, using renewable energy infrastructure (actually, they're both rebuildable, rather than renewable).
So we won't be 'doing' much of what were were doing, when there was so much surplus energy around. As you agree; triage.
We will be food production first, water obviously, and other-than-food energy next. How much culture we manage to keep/keep alive, is moot.
So what are we powering with in 2100? Is Auckland still intact? Could we maintain the grid (Benmore/Heywards/Otahuhu)? The problem is that thiat is a Systems question, and the Bardsleys of this world need to be meshed into a Systemic debate. For which we are probably too late...
We have to ask the same question of tertiary education; churning out ever-more debt-encumbered siloed complexity-believers, may not be optimal...
https://www.goodreads.com/en/book/show/3014984-approaching-the-benign-e…
Go well.
The reality is we will be using fossil fuels to build renewables. But that's better than using fossil fuels to build more fossil fuel infrastructure. Change won't be fast enough, but will happen, the longer it takes the more people suffer. People still think we can have our cake and eat it.
Working in the industry, I have access to a lot of numbers and calcs that most don't know or understand. I ran it through the models.
I assumed $100/ MWh arbitrage. 80% round trip efficiency Industry O&M costs. Filled over 5 years, emptied over a winter. Money available at Government bond rates. Results came out that the plant was uneconomic if it cost more than $1.2B. And that was not taking into account the extra transmission lines needed plus the "cheap" overbuild needed to supply the surplus power to fill the lake. You have to get the Onslow power to Whakamaru. The present system can't. Needs extra 1GW transmission near the length of country.
If it tried to do day to day trading, it could be a bit less uneconomic, but there was guarantee of dry storage. Nor if we get two dry years in a row. Seven or 8 wet years also loses money.
Note that the current windfarms being built are priced at about $130/MWh and the yearly spot price about $100/MWh. Year ahead futures price was cheaper. So to build for the $1.2B Onslow and be economic, the power price would have to double yet costs remain the same.
Waymad - Chris didn't use an actual model that others can check and critique - we do not know how biased or unbiased his figures are. Chris produced some back-of-the-envelope calculations based on some very specific assumptions that may or may not be true. For instance does it really takes 5 years to fill Lake Onslow to cover a dry winter event. That seems fake - both the time length - and that even if Onslow is only partially full it still can provide some dry year supply generation.
Brendon - Chris is introducing a diversion in proposing a private enterprise framework for Onslow evaluation. The NZ Battery group has been tasked with finding the best option, or combination of options, for taking us through a dry year without the use of fossil fuels for power supply. "Best" is in terms of national good measured against national cost, taking all aspects into account. None of the considered options would pass an evaluation in narrow private enterprise terms. Measured in national terms, Onslow pumped storage may or may not be determined to have sufficient merit to be part of the solution. It does have some nice multi-use advantages but we have to await the final decisions. It should all be clear by this time next year. The good thing is that Onslow is being given proper evaluation. It is at some expense but it is better to spend millions on evaluation now rather than risk spending billions on too quickly moving to construct a scheme that we come to regret later.
Hi solardb. That's the little Teviot Power Scheme, operated by Pioneer Energy. The engineering group evaluating Onslow are not looking at a hydro cascade option in the Teviot gorge. The series of small lakes would create additional environmental impact in the scenic gorge, and the dams would have to be quite high. Onslow pumped storage, if it went ahead, would be of some help to Teviot Scheme operation. This is because the large Onslow dam and expanded lake would allow managed water release down the Teviot river to better match the needs for their hydro operation and also eliminate spill. It would also be of help with drought-proofing the Teviot irrigation scheme. These are little added extras of course but may be taken into consideration in the overall Onslow evaluation.
I have built a number of models for Onslow, including BAU which assumes the thermal stations remain and are replaced as they reach the end of their economic life, and for the scenarios set by the Government for 100% renewable. In all cases Onslow is economic to run, but more so under the 100% renewable scenario. When looking at Onslow in isolation it earns around $200M pa in each case, but under the 100% renewable scenario wind and geothermal returns are maximised by having Onslow in the mix.
Think back to July last year when Hamilton suffered blackouts because there was insufficient generation to meet the power demands, and that was with thermal generation available. Onslow would have prevented that from happening. Similar events have almost happened on a number of occasions this winter, but we have scraped through due to Transpower requesting networks to shed waterheating load. Now take thermal plant out of the mix and without a suitable storage scheme power cuts are inevitable. So what value does that put on Onslow?
No Kate. CBAs need to be done in conjunction with any objectives. That sets the bounds of the "solution". We do it on new highways and relatively minor capital projects. At work, the lower limit is $100k. When you are spending $100M on investigations, do you not think that $100k on a CBA might be sensible. I will do it for free.
Turning the question around, how much extra are you prepared to pay for your electricity to get "green" energy security? We have it at present with the fossil fuels. And how much extra do you think the majority of voters will be prepared to get the greenwash? Overseas polls indicate the median is less than $1/ week per household. If you doubt that, why did the government take some of the duty of petrol when the price went up? The green energy security will be higher costs, otherwise it would have been done already.
Sure we do it on roads, but the CBA on Transmission Gully, for example, if I recall correctly, never did stack up (it was done time and time again and a necessary project delayed as a result). I made a habit of writing to the DomPost editor everytime we had a death on the old SH1 route between Pukerua Bay and Paekakariki.
The need to build safety and resilience won out eventually.
And it's not a matter of what I would pay in addition, or you would pay (or even our grandchildren would pay) in addition for our electricity/energy.
Instead it is a matter of whether our current generation wishes to work toward future generations having access to a secure, reliable energy supply. Have we forgotten what our ancestors who fought in two World Wars did for us - and all those to come
I find it hard to believe so few people are willing to invest in intergenerational equity these days - when it was such a feature in our ancestors past. $1 dollar a week per household - it's an embarrassingly small sacrifice in comparison.
And the government reduced the duty on petrol because they are weak, in combination with having made poor decisions/commitment to public transport expenditure in the past.
No matter what happens, I suspect energy costs are going to be high in the future - much higher. And energy conservation will become the norm. Some government may well need to reverse the industry privatization of the past as well in the future.
I cannot understand why you pine for renationalisation of the energy system. I did a fair bit of my career under the old system. It was a lot worse than what we have now. There was massive overpadding. There was a lot not done because of public service rules. Stupid capital decisions were made by politicians who ignored professional advice. We are still living with those consequences.
Going on what you have written in other comments, what you are suggesting won't give secure, reliable and inexpensive (as in not crippling costs) energy. If you think your suggestions will work, tell us where overseas it has.
I don't pine for re-nationalisation of the electricity sector. What I'm saying is that energy is likely to become so expensive in future - its use and distribution is unlikely to have room for profit margin and sale to the highest bidder. You will be familiar with the need for rationing during each of those two world wars, are you not? What makes you think societies going forward will not need to re-implement rationing in order to achieve a more humane and collaborative way of distributing what will become scarce resources?
Try turning your mind off to privatization and financialization for a moment - and think instead about the possibilities for a better way for societies to function and flourish.
I'm not an engineer. I admire people who do understand these things. But understanding without imagination is a bit of a useless pursuit. I have no idea whether Onslow will or won't work from an engineering perspective, but the last thing I'd be judging its usefulness on is a cost benefit analysis used as an excuse to stop investigating and 'imagining'. .
You do need to check your history Kate. There was still rationing and power cuts in the 50s (Hugh Watt declared the power emergency was ended in early 1959, because the Black Budget had run out of money to build more stations, but they had massive ripple control use for next twenty years) and I remember area wide power cuts in the South Island in the 70s.
I work in the real rational world and make no apologies for it. That is why the utilities are full of people like me, many well past retirement age. We can keep under-resourced things running. People reimagining society I find have no understanding of how things actually work and its interconnectedness. They don't comprehend the hidden energy consumption. They cannot point to an example of their utopian world for us to emulate. An easy example of this confusion is your statements above. If it doesn't work from an engineering perspective, it is useless. The CBA is just a guide as to how useless it is. Resources are finite. Wasting them on useless work prevents more important stuff being done.
A secure reliable electricity system is not a nice to have. It is an essential. Society collapses very quickly when the lights go out. That is why there needs to be massive conservatism. 99.99% reliability (expressed as grid minutes) means just under an hour without power a year for everyone. In reality, the spurs get a lot worse than that hour and the core gets nothing. You personally think you might be able to live with that level of security, but the country can't.
Prove something is better and I'll support it. Until then, talking in nirvana-like platitudes just causes me to take the phone off the hook.
Onslow would absolutely do day-to-day trading. You are missing out the main source of income.
But yes, given the uncertain build costs and skinny returns no private company looks like they will step up to the mark. This would have to be a government initiative. The government is able to do things that have benefits other than raw financial return - in fact, that is the case with almost everything it does.
You seem to be saying it is a solution looking for a problem. And it isn't a production dam. It is pumped storage. There are big differences
Most of the capital cost of the project would be in the powerhouse and tunnels - that won't change. As an aside, lot more concrete will be needed in there than they budgeted for. Whether usable storage is 50GWh or 5000, the capital cost doesn't scale similarly. And you forget the 3000GWh worth of dead water needed to fill the lake up to a usable level.
If you read their documents, it doesn't seem they are doing a study on how it will impact power generation development, the grid and market. Several companies have already said they are holding off development decisions until the future of Onslow is decided. So it would already be holding up growth.
To fill in offpeak, you have to overbuild. Who is going to do that when the price they get for the power is less than what it costs to service the debt?
Nice to hear from you again Chris. It's a long time ago now since our first public discussion on Onslow. I seem to recall that back then you expressed concerns that Onslow would pump the Clutha River dry and there would be landslides around the lake margins - although I believe you had not visited Lake Onslow at the time.
An interesting thing about Onslow is that it stimulates strong views at all levels right up to the experts. It depends very much on where you are coming from. You do have something of a record of not exactly being fully supportive of renewable power sources - "the unreliables" as you like to call them.
Given known NZ/Austalia/Indonesia coal reserves, there is no question that, in pure business terms, the most economic long-term dry year solution is having a big pile of coal at some refurbished equivalent of Huntly. That would also suit the gentailers because, as you know, the NZ electricity market is structured to keep power prices high from renewable power generation when there is a small component of fossil fuel in the mix. One of the most encouraging aspects of the Onslow discussions has been the unanimous and strong opposition from the gentailers. These good folk know the market very well and they have clearly come to the conclusion that Onslow in the market coupled with 100% renewable power will lower electricity prices.
With respect to expert opinion, more note should be taken of those with no associated baggage. In this regard, those interested might track down the public comments by Keith Turner (former Meridian CEO). Also, a useful technical discussion on Onslow can be found at
https://nzissues.com/Community/threads/a-primer-on-the-lake-onslow-pump…
As you note, private enterprise would be foolish indeed to spend billions to construct Onslow and expect to turn a profit. On the other hand, you can take the bigger-picture view in terms of national economics and the global environment. That's the role of government. For better or worse, it's their task to act for the benefit of New Zealanders generally, as opposed to the gentailers' function of maximising income to their select group of shareholders by keeping electricity prices high. Lower power prices in dry years will be of economic benefit to just about everyone - from our electricity-intensive exporters competing on a world market to households in energy hardship. In the first half of 2021, the price of electricity was so high that NZ Steel could not not output product at a purchasable price, despite the massive steel demand in the country. Yes, the huge burn of coal at Huntly at the time was great for Genesis income and kept the lights on, but there was a big economic price for it too. There is also our global moral obligation to play our role in reducing emissions as part of our green transition. There is an economic aspect there too. "Proudly made in New Zealand with 100% renewable electricity" is a nice tag to put on your product. And there will also be competitors out there who will be very willing to slap tariffs on our products at any hint that our emissions are greater than they might be.
You have often raised the issue of Onslow requiring massive transmission upgrades. Part of that has been done already by Transpower as part of the need to get Manapouri power north in the event of Tiwai closure. Also, any Onslow-specific transmission upgrades will not be needed until 2030 at the very earliest. In this regard you would have seen the item in Tuesday's Energy News about Transpower seeking $4b of CAPEX for the 2025-2030 period.
A couple of your figures could be queried. Could Onslow really be economic in the pure business sense for as little as $1.2b construction cost? I would have thought the figure would be quite a lot higher. Also, you state that there will be a requirement for 3 TWh of dead storage at Onslow. This is wildly incorrect because it implies that the lower operating level for Lake Onslow would be about 730 metres asl. It is much more likely to be near 700 metres asl, which equates to about 0.5 TWh of dead storage. Those interested can check Fig. 1 in one of the downloads available via the link in article. That figure was constructed from available elevation data. NZ Battery have since obtained more accurate elevation information from a Lidar survey but it is not yet public.
Much of the discussion around Onslow is because we are lacking big-picture information about Onslow in the economy and in the grid, other than a few short newsletters from NZ Battery. A lot will be clarified in Dec/January when the sustainable dry year options firm up in more public detail. The three possibilities are: Onslow by itself, Onslow with others, just others. My guess is for the middle one. Whatever the outcome, maybe then you could take a drive down from Taupo for a coffee at the University of Waikato Chris, we seem to have been discussing a long time without ever meeting up.
I am not a "coal" person. I am very much a cheap reliable stable electricity system. As the overseas experience shows, the unreliables offer none of those. Australia this year has shown that. The unreliables plus pumped storage at Onslow offer some reliability and stability but at a very expensive cost.
Belated apologies for some of my original wording Chris - which might have been taken to mean that you were part of the coal industry. A good thing about Interest posts is that they can be edited - now tidied up. I'm sure many would be interested in your thoughts about how NZ would best achieve a cheap reliable stable electricity system.
I have always been upset by those who do historical editting. It can make subsequent comments unintelligible.
I think the best way to understand the system is a detailed look at what the electricity industry was like 10-15 years ago and costs/ prices associated with it. Then look at the current. What is different? Occam's razor can generally determine the difference. Then look at places like California, Germany and South Australia to see if the evidence still fits. They have very good grid connections to surrounding areas. Why have their energy system and energy prices turned to custard?
See above, Chris.
The problem is that all 'pricing' is done on the basis of BAU - which wasn't AU. It was a temporary, high-EROEI blip, base on non-renewables (in the original sense of the word.
Renewables are nowhere near the EROEI of Fossil energy (although ex build-energy, hydro is pretty good). The rest don't go anywhere near. So of course they don't support 'profit' and 'return' like FF did; those were possible only in a high surplus-energy scenario. Globally, GDP has need more debt that it claimed positive $$$$$s, and it's already a count that avoids stocks (material, not the betting kind) and concentrates myopically on flows.
That said, we have to go there before we can't. Which means the profit criteria is invalid.
Oh, and 'growth' is well in the rearview mirror. Just sayin'...
Well ... if we go back 10-15 years, that includes the 2008 dry year. I believe that was when NZ industry first started to see the advantages of more hydro storage to get away from situations like the high electricity prices at the time. That was long before climate issues were of public concern. I recall that Pan Pac industries (pulp and paper) made a submission then in favour of evaluating Onslow because electricity prices made up a fair portion of the total cost of their product. What is different now? Not a lot. The 2021 dry time created a massive economic hit, just as 2008 did. I guess the critical thing is the need for low-cost baseload to take us through the dry times. But on a positive note - you have a lot of history in the game Chris. Please do share your thoughts on how you would go about setting up your cheap reliable stable electricity system, because we certainly don't have that a present. And these days we need to add "zero-emission" and "sustainable" to the descriptors.
PanPac have their own steam turbine on site but it rarely runs. When I toured there some years back, I asked why. They said the wood waste needed was more valuable to them than the electricity it would generate
""Please do share your thoughts on how you would go about setting up your cheap reliable stable electricity system, because we certainly don't have that a present. And these days we need to add "zero-emission" and "sustainable" to the descriptors"
Quite simply You can't get cheap reliable stable zero emission energy for NZ. If it could be done. It would have. The schemes being proposed at present will make it expensive, unreliable and unstable. Others overseas have come to the same conclusion
.
Going through the lines in my model in more detail, the big killer is the front end cost. Dinorwig took 10 years to build and a lot of those costs were early on in the project. Onslow won't be any faster or have a later cost spread. There are also the consents needed. I used $40M over two years. That is very optimistic. I haven't included the $100M to get to a decision.
Day to day trading has minimal effect on the economics. At average rates,1 GWh is worth only $0.1M. The average thermal input is about 10-15 GWh/ day. I'd like to see the economics of the batteries in SA. Very expensive storage for a very cheap commodity. They would need to have massive arbitrage to pay off ther capital costs. Though they do have negative pricing, wind dispatched off (but subsidised to do that by the government - a very skewed market) and massive price spikes at dawn and dusk. As I write this, the price in Eastern Oz only about $300/ MWh, wind just 3% of total generation, solar 11%, and 6MW from battery. SA is importing about 20% of its demand from coal stations.
The big elephant in the room is who will build the plants to run at a loss to fill the lake. Look at the prices announced for windfarms currently under construction. Their costs are greater than the generation value. Like all the plant owners, they see the cost of power rising in real terms. That means overbuild won't happen unless government subsidises it or the power price has a large increase.
There appear to be some fundamental flaws in the arguments here:
"Quite simply You can't get cheap reliable stable zero emission energy for NZ. If it could be done. It would have."
Is it logical to expect the gentailers to spend billions so that they can produce reliable, cheaper, and zero emission electricity through dry years, thus reducing the income distributed to their shareholders? The New Zealand electricity market offers no reward for provision of lower-cost dry year reliability.
"Day to day trading has minimal effect on the economics."
This would appear to be simply untrue. See the comments downpost by Tamerlaine.
"The big elephant in the room is who will build the plants to run at a loss to fill the lake."
Why do we need new plants to fill the lake and why would they run at a loss? From time to time we have massive spill loss that Onslow can avoid. The Waitaki scheme alone over 2009-12 had the same amount of spill loss as the total Onslow storage capacity. There will also be the component from reduced wind spill in wet years as wind energy develops further. In addition, given the tendency for lower prices to correlate with high lake levels, there may well be support for a public power savings campaign to aid the initial fill up to Onslow mean operating level "Switch off now for cheaper cleaner electricity".
Chris has forgotten the fact that energy underwrites money, and that the western/global system is going deeper and deeper into debt, as energy EROEI goes he other way.
So whether something stacks up financially, or not, is not - repeat not - the question here. That system is in its death-throes; the question is what we do beyond that point, and that question is an overall systemic one.
So many people, otherwise quite smart enough, assume so much (usually that BAU will continue to be U).
Chris, Your analysis assumes that Onslow is only to be used for dry year cover. Although that is the way many media articles portray it, that is not the way it would work at all. Indeed if that was its only purpose then it would be not worth considering.
Instead, look at how the electricity market operates and place bids for pumping at various tranches from $60 down to $0.01. Then place offers for generation at various tranches that currently reflect the thermal station offers, reflecting the governments decree that the electricity industry will be 100% renewable by 2035.
Now run those bids and offers over a full calendar year and see what results you get.
I have done that very modelling more than once, using different parameters and different years, and the least amount that Onslow earns in any given year is in excess of $200M, and that is while building up the stored water in preparation for a dry year.
Perhaps another question you should consider is the difference between energy and power. Once the thermal stations are shut down where does the grid get its power from when the wind isn't blowing?
Edit: I would second Earl Bardsley's comment about coming to Waikato and talking to us directly.
Thanks to all for their comments, covering a variety of views as always. It's a matter of waiting now for the big-picture review from NZ Battery at the end of the year. If Onslow does finally get the green light then public attention will shift to getting as much out of it as possible as a large multi-use scheme in a regional setting. Emphasis here will be on water resource possibilities and also potential environmental offsets and mitigations. I do have an (unfunded) PhD student working in this field. Time will tell whether that study will be a useful contribution or turn out to be more of an academic exercise.
https://www.rnz.co.nz/audio/player?audio_id=2018861396
Need for a master plan .
Just looking at Topomaps again, And wondering how much could be gained form pumping from the head waters fo the Taieri river , and /or the loganburn resevior.? If this is a 1 in 5 year dry year insurance could enough be gained from the high flow times of these and other nearby sources.? Or even from just storing the Teviot hydro scheme water for dry periods ony.
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