Govt told to hasten work on whether it'll go ahead with Otago's pumped hydro scheme

Public Policy / news

Calls for faster decision making on a new scheme to support renewable electricity have been joined by the Electricity Authority

16th May 23, 3:30pm by Eric Frykberg

The Electricity Authority (EA) is calling for faster decision-making on firming up the supply of electricity when poor weather conditions limit the availability of electricity.

Their concern is with the so-called NZ Battery Project, of which a pumped hydro scheme in Central Otago is the most prominent option.

This project would supply power when calm weather limits output from wind turbines and arid conditions dry up hydro dams.

At present, coal and gas-fired power plants make up that gap, but the government wants to end this practice.

However, some in the energy sector have said slow decision-making on the battery project is deterring them from their own energy investments.

That is because if the pumped hydro scheme goes ahead, then the large-scale volume of its output could displace demand for their own product.

In a report, the EA appears to support this claim, in a reference to "investment-impeding uncertainty" around the project.

"We invite the Ministry of Business Innovation and Employment (MBIE) to bring forward the completion of the.....NZ Battery Project," the EA says.

"Reduced uncertainty would contribute to more renewable generation investment, and so to lower prices, sooner."

The Otago scheme would work by pumping water uphill in the early hours of the morning when electricity is plentiful and demand is low.

That water would then flow back downhill through turbines to generate electricity in the early evening when demand is high.

The process would then be repeated the next day.

The project is centred on Lake Onslow, about 20 kilometres East of Roxburgh in central Otago. MBIE has made it clear that similar schemes run overseas. But its sheer size and effectiveness could be a problem.

Its potentially chilling effect on rival projects is clear from comments made to the EA, which says; "submissions generally agreed that uncertainty was an issue."

And while those submissions say it is important not to rush the project, in order to get it right, they add "it is crucial to provide clarity how the NZ Battery Project would integrate into the wholesale electricity market ."

At present, New Zealand electricity is 85% renewable on average. The remaining 15% is generated from burning coal or gas. The Government wants to move to 100% renewable, but needs to smooth over the 15% gap first.

The Lake Onslow project is intended to do this, though the Energy and Resources Minister Megan Woods insists there are other options besides Lake Onslow.

MBIE material lists those as hydrogen, biomass such as wood chips, more geothermal electricity or better management of the demand side of the energy equation.

The Lake Onslow project would cost $15.7 billion according to the latest numbers. A feasibility study has been done and the next stage is a full business case.

At this stage, Lake Onslow faces an uncertain future, for political as well as technical and economic reasons.

The National and the Act Party have made clear they oppose the project. The Government wants to continue the process of stage by stage analysis of the merits of the scheme. The Greens are withholding judgement until all the reports are in. Te Pati Maori also wants more information before making a call.

Meanwhile, Megan Woods says any calls to hasten a decision on Lake Onslow are premature.

"No decisions have been made in the New Zealand Battery Project about which option will go forward, so that is a premature discussion."

*Also see this episode of the Of Interest podcast: Could a pumped hydro scheme in Otago free NZ from fossil fueled electricity & help enable a green transition?

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105 Comments

by Erant | 16th May 23, 3:44pm 1684208658

It is absolutely right to say that "it is crucial to provide clarity how the NZ Battery Project would integrate into the wholesale electricity market".

If there is no change to the market structure then the project is unviable to its investors (i.e we the taxpayers) because existing generators in the South Island would capture all the value (if any). If change to the market is coming to make the project viable to taxpayers then all other proposals to invest will not be commercial until this critical uncertainty is resolved.

The situation is a mess and needs urgent resolution one way or the other.

by bw | 16th May 23, 4:14pm 1684210489

ReNationalise the whole lot then.

Privatisation of a utility is asking for trouble, and we have it.

by Uninterested | 16th May 23, 6:16pm 1684217773

Too late. To raise the debt required with the cost of debt so high would bankrupt the country.

by james108 | 17th May 23, 10:14am 1684275299

No it wouldn’t, not even close, very hard to bankrupt a company that issues its own currency.

by Colin Cameron | 17th May 23, 8:32am 1684269130

So true and we the tax payer got told by deregulation we will have cheaper power (Max Bradford Nat). Hydro is one of the least, easiest maintained infrastructure. Costs to set up but once done very little to keep going yet prints money pity Douglas and Prebble didn't understand that when they flog off our assets yes we were in debt (how are we now and political parties of all colour are saying we should have more debt) but now we don't have the assets. Those think big projects are all still going and earning yet all that dividend is shipped off shore. These power companies are like Enron in how they manipulated the California power grid to drive up prices.

by powerdownkiwi | 16th May 23, 6:37pm 1684219072

It's NOTHING to do with markets.

It's EVERYTHING to do with being future-resilient.

And there the debate should be centred.

Also, this ISN'T about removing the 15%; it's about the near-term adjustment to the unavailability of fossil energy. ramifications thereof.

by J.C. | 16th May 23, 6:55pm 1684220143

It's NOTHING to do with markets.

It's EVERYTHING to do with being future-resilient.

This is where you make sense Power.

by IT GUY | 16th May 23, 8:42pm 1684226568

same re Marsden point....

by npc | 17th May 23, 8:50am 1684270226

At this price, would a nuclear plant not make more sense?

by powerdownkiwi | 17th May 23, 8:59am 1684270798

It's NOTHING to do with markets .......... At this price

Interesting cognition skills.

It's NOT about price. It's about long-term societal resilience - and in those terms, even the existing grid is moot.

We really did paint ourselves into a corner when we chose to represent the real with the artificial, didn't we?

by npc | 17th May 23, 10:10am 1684275058

Na I think it's about the markets. They'll allocate resources efficiently.

We have potentially limitless energy and resources. Solar, nuclear, wind, hydro - maybe fusion at some point. There's still plenty of coal and oil to burn up. Only the constraints we impose on ourselves are artificial.

by powerdownkiwi | 17th May 23, 1:26pm 1684286809

You did economics, didn't you?

And stopped learning about then?

Politely; bollocks.

by Colin Cameron | 17th May 23, 2:32pm 1684290730

Finland just commissioned the largest nuclear power plant in EU even thou the other EU countries complained. Denmark just built and commissioned a new plastic/waste to energy plant even built a ski field on. It Germany and England fired up their mothball coal fired power plants as Russian gas too exspensive. Isn't it strange that the Greens love to talk up the Nordic countries Finland, Denmark, Norway who is in the top ten oil producers) as were NZ needs to be with their welfare and tax systems but yet don't want us using our resources even trying to stop a waste to energy plant in Glenavy.

by powerdownkiwi | 17th May 23, 8:47pm 1684313247

Waste energy? No such thing. Inefficient retrieval of initial build energy, sure. But that still requires whatever was burnt, to be replaced. Using more energy.

It's flat-out illogical - just like hydrogen from hydro-electricity is illogical. The only way forward is to reduce waste to zero BEFORE it even becomes a waste-stream.

Sigh.

by kiwichas | 16th May 23, 3:55pm 1684209345

The Otago scheme would work by pumping water uphill in the early hours of the morning when electricity is plentiful and demand is low.

That water would then flow back downhill through turbines to generate electricity in the early evening when demand is high. "

is this actually true, do dams magically refill fromlow levels overnight, every night??

by ShoreThing | 16th May 23, 4:01pm 1684209706

Unclear on what you are actually asking here. It's not magic, the water is pumped into the reservoir. The idea is that there are times of the day when we generate more power than we need, so power is "cheap". At those times, we can use some of that power to run the pumps and effectively store that extra power.

by kiwichas | 16th May 23, 4:27pm 1684211251

It may be cheaper but is there actually a true excess of hydro that can be used that can be used.Recall the original scheme was to smooth out price fluctuations, not hydro supply per se..

Say your dam is half empty at the end of the day, does it overflow at night? You have to propose that there is generally so much water at night that it's actually been spilled at night rather than stored or used directly for hydro.

by morepork | 16th May 23, 4:46pm 1684212379

Electricity usage in the middle of the night is typically half of what it is around peak times, so there is usually water that would otherwise sit in one of the existing reservoirs or be spilled, particularly if there is wind at that time.

Check out the transpower dashboard: https://www.transpower.co.nz/system-operator/live-system-and-market-dat…

by Pragmatist | 16th May 23, 5:06pm 1684213561

And water sitting behind the existing dams acheives way better results than feeding it thru a turbine to generate electricity to pump water up behind a different dam elsewhere after all the losses along the way. Its only when the existing hydro is full and being spilled that it make sense to run a turbine to pump water up a hill elsewhere. And there isn't much of that most years.

by Uninterested | 16th May 23, 6:30pm 1684218653

When hydro is spilling it will always be generating flat out. If there is a danger that it will spill in the near future then it will be running flat out 24/7.

The operation of the market is too complex to describe in a short post.

Personally I would like it to go back to central planning. That way there would be much more certainty. Way less duplication of effort by disparate generating companies. The only unknown then will be industry. eg Tiwai and others. And does the govt encourage them to come, stay or go.

Personally I think Onslow and its transmission lines is way way too expensive for a generation source that is not net +ve.

Keep a few gas stations as backup. Much cheaper.

by morepork | 17th May 23, 9:41am 1684273293

The water doesn't get lost in the process. When demand is low you pump water up from reservoir A to higher reservoir B. When demand is high you generate power as it flows through your dam back to reservoir A, where it can still feed through the rest of the system. Even with losses, as prices can easily be 5x as high during periods of high demand vs low demand there is clearly economic sense in it.

by Chris Morris | 17th May 23, 4:34pm 1684298064

You don't understand the merit order stack.

At current conditions, up to about 3500MW, the price is very low <$20MWh, it ramps up quickly to about $150 at 4500MW and is about $1000 at 6000MW. Almost all water not used at low demand/ low prices is stored behind the dam and used for generation when power demand and price goes up. Very little is spilled or wasted unless no capacity at station to generate or there are transmission constraints. Run those hydros more at night and burn more coal during the day to make up missing power and energy.

by rastus1 | 16th May 23, 4:48pm 1684212521

I can see it now.......

Sorry folks, we are turning off the river at night. We will also turn it off when no one wants our power or if the price has dropped due to too much power from other suppliers. It not your river anymore, it now belongs to a corporate and we determine what flows down it based on what our cash flow is.

You have lost your river to the cashflow stream of the damn owners.

So that's the enviro bit. Nek minute......

Factor in the inevitable Maori ownership claim on the water

.....and this project ain't going anywhere in a hurry!

by blobbles | 16th May 23, 5:46pm 1684215966

Dams work by spilling more water when they don't need it via a spillway that goes into a river.

During the night, demand for electricity drops significantly, meaning all the wind/water turbines and thermal stations have to back off their supply of electricity (go here and click on the "NZ Loads" tab). This "spinning down" is a wee bit costly long term, essentially they are lowering their ROI for the assets as they are sitting idle for much of the time. Imagine, if you will, that during period from 12-5am, those powerstations continue to generate their power... something has to use it. That's something is the pumps at Onslow that refill the lake which is something like 600m above the intake, which is a hydro lake itself. During times of peak load (again refer to the graph) or dry years when the hydro stations aren't producing as much, Onslow can generate water and also spill it into the Clutha water scheme to "refill" it for further power generation.

by kiwimm | 16th May 23, 6:30pm 1684218627

Onslow mostly provides storage for dry seasons and years. You fill it up when there is an excess which allows you to store 80% of the power you otherwise would have used 0% of. It can also be filled by wind and geothermal at night.

by blobbles | 16th May 23, 9:55pm 1684230934

Uhhh, that's what I said. Except I believe it will be used for both load smoothing and dry year, no reason to be only one.

by Peter Olorenshaw | 26th May 23, 10:12am 1685052738

Yes actually three uses in one as Simon Upton put it in supporting it: Of course it does the dry hydro year thing, but importantly it puts a floor under the power price paid to solar and wind generators, but it also puts a cap on the maximum prices in the power system as it would then start generating.

by Uninterested | 16th May 23, 6:33pm 1684218819

Alas, lake ROX is pretty much silted up!

by Chris Morris | 16th May 23, 7:33pm 1684222437

Roxburgh hasn't silted up. They also do bottom flushes in floods .

by E46 | 16th May 23, 4:20pm 1684210820

Pumped Hydro.

by Grattaway | 16th May 23, 4:12pm 1684210348

So we are yet again held hostage to a govt unable to make a decision - except for the appointment of a working group

Result is higher costs to Nzers in the form of power prices above where they could be

Great outcome Megan

by Hardly | 16th May 23, 5:15pm 1684214137

People making comments on here need to do some research and realise that pumped hydro is a very effective scheme that works very effectively overseas. It also can make money by arbitrage - store water when the price is low and generate power with it when it’s high. This happens in a 24 hour timeframe and over months. When water is plentiful you’ll see relatively small amounts used up and down. When there is a major drought it will dip into its deep storage capacity. The economic benefits for anyone using wholesale power - ie business - will be massive.

by Hardly | 16th May 23, 5:18pm 1684214288

It’s important to note that it doesn’t only store water, it also increases the total simultaneous generation capacity possible via hydro.

by Uninterested | 16th May 23, 6:38pm 1684219111

And reduces the total simultaneous generation possible with hydro when filling up. ie If it goes ahead then you need to build MORE additional sources of generation than you would have done otherwise.

by Hardly | 16th May 23, 6:46pm 1684219618

You would need to build more generation capacity without onslow. Why? Well why does Huntley only run sometimes but the asset sits there in case it’s needed? Because the other sources are unreliable.

You have to build generation capacity for the 0.01% scenario. Which means a lot of wasted capacity.

Rather than building power plants you don’t need 99.99% of the time, it makes sense to build a big lake. When you build the big lake you need less surplus capacity.

by Uninterested | 17th May 23, 9:31am 1684272662

Ok. To be able to fill it up your need more. Without it you need more.

Kind of depends how it would be operated. eg If it uses "surplus" eg surplus solar power and generates on a daily basis, that may mean that it isn't full when a dry winter occurs. Or if it uses "surplus" power to fill it up over the long term then that power really was surplus for more normal weather conditions. (Snowfall, rain, wind and sun).

by ChrisOfNoFame | 17th May 23, 10:28am 1684276133

For future reference, can we say "the other sources are not continuous". The word unreliable implies all sorts of implications that are not justified.

by Chris Morris | 17th May 23, 4:43pm 1684298584

Unreliable is the correct term for their performance They cannot be relied on to meet dispatch (like all other generation has to) even on a two hour ahead schedule, left alone the 48h which the SO wants and is needed to get cold thermals away. .

Remember in August 2021- the power cut event - it happened because they lost 300MW of wind unexpectedly when it was too late to start Huntly. They had to use their reserves so when Tokaau had a problem, there was nothing spare left.

As Australia is finding out, wind and solar are very good at generating when their power isn't needed. There, the lack of predictability has caused massive costs to consumers. Look at domestic power prices in Adelaide.

by kiwikidsnz | 16th May 23, 5:42pm 1684215774

The Snowy river pumped hydro project in Oz is said to be years behind schedule and billions over budget.

Just run transmission from Manapouri to the NI & boot Rio Tinto out for a fraction of the cost in a fraction of the time.

by kiwimm | 16th May 23, 6:32pm 1684218767

Better to be able to produce green aluminium which is effectively a store of energy

by kiwikidsnz | 16th May 23, 6:47pm 1684219622

That's just continuing our massive subsidies to RTs profits

by kiwimm | 17th May 23, 8:00am 1684267218

I would call Rio Tinto’s bluff and start raising rates. They need to generate green aluminium to meet climate targets.

by Colin Cameron | 17th May 23, 8:35am 1684269350

Once Rio leaves Tiwai is planned on becoming Hydrogen production.

by Erant | 16th May 23, 6:09pm 1684217394

It sounds good at the hand-waving level of project investigation to say "store water when the price is low and generate power with it when it’s high", but if the very design of your project and its interaction with the market increases the price of power during the storing period and decreases the price when the water is being released, you will not have a commercial project for your investors: -its value will be taken by others in the market.

by ChrisOfNoFame | 17th May 23, 10:34am 1684276486

You need to do the maths on what you said. Take the hint and do it because then you'll not regurgitate such nonsense. (Hint: the storing process would barely make a dent in the energy consumption at low price levels. Further hint: total generation capacity must be built and be available for any peak loads in a 365 day period.)

by ACB | 16th May 23, 6:56pm 1684220160

If the project is worth doing, let the private sector take the risk, not the taxpayer. Surely we've learnt this lesson? Just ensure appropriate regulation and pricing of externalities to get the right outcomes.

by Hardly | 16th May 23, 7:18pm 1684221501

Lol if roads are worth doing let the private sector build them. If a fire service is worth doing let the private sector do it. If an army is worth having let the private sector do it.

The reason the private sector won’t build it is because:

(A) it reduces the profits by removing hugely inflated prices during shortages

(B) the benefits accrue to consumers and businesses through more stable prices and a private sector provider cannot capture revenue based on those benefits.

by Erant | 16th May 23, 8:28pm 1684225735

If the current electricity market regime applies, no rational private sector entity would invest because of the difficulty in capturing the economic value for its shareholders. So if the taxpayers are not investing either, there will be no project.

by ChrisOfNoFame | 17th May 23, 10:43am 1684276992

This is not true.

Wind generation - currently the cheapest form of generation per kW - can't simply turn on when prices are high. Instead that make make power when the wind blows which obviously varies throughout the day, week, season and year. I.e. When they generate power they generally have to accept whatever price is going.

And a slightly higher price when human-driven-demand is low, but pumping needs from the pumped hydro Onslow scheme are operational, the slightly higher price, actually makes non-continuous generation like wind, solar, tidal, etc. even more viable - and profitable !!!!

by Chris-M | 16th May 23, 6:46pm 1684219575

This guy clearly hasn't a clue how the NZ electricity system works.

There is next no surplus renewable energy wasted or available at this stage to store in the Hydro battery. Non renewable generation fills in the gaps in periods of renewable shortfall. Otherwise water is taken out of the present storage lakes (batteries) to met demand. As we increase our supply of renewable energy the existing storage lakes will be able to provide significant battery like energy storage. At some point further down the track as we add further renewable energy, particularly volatile wind and solar generation our capacity to smooth demand with the existing lakes and load management will not be sufficient to avoid wastage. I would guess that it is some way down the track before we get to needing this. Given the lead time for these types of projects it is wise to be considering these issues, but it is not an urgent we need it tomorrow situation. If we close the aluminium smelter, then this will increase the urgency.

As others have noted our current fractionated competitive generation system is a nightmare to migrate sensibly. When all the current governing political parties were in opposition they were vehemently opposed to the sale of the power generators (as were many right wing groups), but once in power they did nothing to reverse the situation. If the public vote to give you the power to change things then that what you should do. Use or loose it and otherwise you don't deserve the mandate.The other thing that it calls into question is "who is actually running the country?"

by blobbles | 16th May 23, 5:50pm 1684216208

Yeah, we have to be honest, any delivery is at the minimum, 15 years away. But I still think it's a good thing to do and make decisions on pretty fast, the intermittency of renewables is a thing that isn't going away anytime soon.

Only real decisions that would make it a pointless system is for us to go nuclear. Which is a total pipedream given local skills and entry to that market is even further away.

by finite | 16th May 23, 5:53pm 1684216423

The EA said "it is crucial to provide clarity how the NZ Battery Project would integrate into the wholesale electricity market ."

I've said this from the start.

Why bother with all these studies unless this issue is resolved.

by Hardly | 16th May 23, 6:10pm 1684217403

It’s pretty easy to explain how it would integrate. Here I will do it.

The government will pay for the project upfront. Yes it will cost $16B but that is small in the scheme of things.

They will create a new SOE to own and manage the asset when it’s built.

The top 30% of the capacity will be used for short term smoothing of demand - ie the company owning the asset will be charged with using the capacity to smooth prices - pumping water to produce power when prices spike (likely around breakfast and dinner and during, when the wind stops etc - look up the duck curve, happens every day like clockwork). And storing water when prices are artificially low.

This benefits both businesses and generators. Especially productive industries that are absolutely wrecked by unpredictable wholesale power prices.

This activity will produce a profit (sell high/buy low) which will be used to meet the running costs and pay dividends to the government generating a return on the investment.

The bottom 70% of capacity is to be reserved for infrequent dry periods where the scheme will be required to continually pump water to generate power. This will drain the capacity which can be refilled after the dry period is over.

The scheme is not a threat to power producers because it uses more power than it produces. It is about ensuring power is available at the right time - that is a valuable commodity. It actually helps renewable energy producers because without the scheme, renewable energy is prone to getting very low rates because all wind/sun is generating at the same time. This will smooth that effect and can guarantee them a minimum price.

It’s so obvious how this works. There is a big battery in south Australia that prints money doing this. Now this is much bigger and more expensive, but the principle is the same.

by finite | 17th May 23, 9:19am 1684271996

If the whole electricty system was nationalised it would be a great addition.

BUT in this so called free market that we have, the question is how it fits in economically without distorting the market and deterring future investments

by ChrisOfNoFame | 17th May 23, 10:46am 1684277169

Maybe because the issues can't be resolved with the studies? ;-)

by lastlegs | 16th May 23, 6:17pm 1684217865

the otago scheme sounds like an out-of-date solution,it would have been perfect 50 years ago when the U,K built theirs in Wales,but now that australia is installing 850 MW batteries maybe we can learn from them as they do get on with it and likely will have it in service before we call for tenders.

by Hardly | 16th May 23, 6:26pm 1684218414

My understanding is that the economics of this is superior on a $ per kWh basis and it supports multiple use cases. Batteries are good for short term smoothing, especially for grids with a high percentage of renewables to manage instability. New Zealand needs some demand smoothing but not on the same scale - we will always have very high hydro/geo baseload. New Zealand has to cover the dry year risk and only pumped hydro can address that.

by KH | 17th May 23, 6:50am 1684263014

Distributed generation goes a long way to solve the dry year problem. Pumped hydro is not the only option. I would like to see the comparison.

by kiwimm | 16th May 23, 6:34pm 1684218865

Onslow is a battery and 1/1000th of the cost of Li-Ion for the same capacity.

by mfd | 16th May 23, 10:26pm 1684232783

Not only that, but onslow is capable of storing that capacity for a period of months or years while losing only a small amount of stored energy to evaporation. Chemical batteries are designed for short term storage.

Furthermore, in a hundred years Onslow would still be there doing the job, with some replacement hardware and maintenance. The battery farm will have been completely replaced perhaps 5-10 times over this period, at a cost not much less than the initial install.

by Chris Morris | 17th May 23, 6:00am 1684260004

It will lose a lot more than that by leakage. Even currently, they reckon a third of the water from the area drains out through cracks. Schist is a notoriously highly fractured rock. How are you going to seal up all those?.

by powerdownkiwi | 17th May 23, 7:51am 1684266708

I smell a vested competing interest.

Mud tends to do that quite quickly....

by Chris Morris | 17th May 23, 4:21pm 1684297269

I work in the industry, That gives me access to a whole lot of relevant facts and data that people don't realise the significance of or understand. But all the stuff I quote is public domain. It was an EnergyWatch article that alerted me to the schist leakage and it was confirmed by an engineering geologist working down there. A big problem. And no, mud doesn't seal it, the muddy flow actually indicates it is getting worse.

My "vested" interest is similar to that of academics or consultants, except I actually know how things work.

by powerdownkiwi | 17th May 23, 9:00pm 1684314039

Yes, I remember your techno-optimism fro a long time back. And we will need people like you, in spades, in the future.

But that future will be very different to the recent past. The problem I have is that we need folk like you (and Bardsley, who I admire for having the foresight) to understand what the future will be like, and THEN tell us whether this, or anything, is appropriate. Currently, you - last I heard, I stand to be corrected) didn't buy into human overshoot, the Limits to Growth, or anything other tha a mutation of BAU. Correct?

And the trouble is that appraisals made through that lens, need to be filtered. Which the Minister has zero chance of doing. I think water-at-height is the most benign battery around and my question is not about that; it's whether we cn maintain the grid at all, post near-term collapse?

Getting the question posed and answered, seems to be near impossible.

Go well

by Chris Morris | 17th May 23, 9:41pm 1684316501

What I do and don't believe in philosophically is irrelevant. I'm insignificant in the scheme of things, having just one three millionth of the voice of NZ and NZ has no influence in the world. Even my daughters' cats don't listen to me.

What I do firmly want to see is NZ having cheap reliable power with minimised impact. To that end, a big wind farm on the top of a ridge (think Titiokura Saddle) is worse in almost every respect than a similar power OCGT.. With regards to operation of a grid, we need reliability and dependability as critical parameters. Certainty of supply of electricity is the lifeblood of modern society. And we are moving ever further away from that.

Water at height has a lot of issues. Vajont killed more people than all the nuke power stations have, including Chernobyl. The latter wasn't even really a power station. It was designed as a plutonium manufacturing site with electricity as a by-product.

by powerdownkiwi | 18th May 23, 7:55am 1684353339

'is the lifeblood of modern society'

See what I mean? We need you teccy types to appraise what can be kept, post-collapse (Limits to Growth, ramification probabilities thereof).

But you won't contemplate such a scenario; to you 'modern society' is not negotiable. Bardsley too, I suspect.

https://open.umn.edu/opentextbooks/textbooks/980

Read it Chris - come back with a rebuttal.

Then let's all have the discussion as to what it is that will be being serviced, in the triage years.

by KH | 17th May 23, 12:35pm 1684283709

Distributed generation is a different concept to Li-ion.

by Colin Cameron | 17th May 23, 8:38am 1684269480

Aus is building the largest hydro pumped battery system in the world.

by Chris Morris | 17th May 23, 4:23pm 1684297418

Their "biggest" is having 5X cost overruns and at least ten years behind program. One of their tunnel drilling machines was supposed to be finished by now and is stuck only 200m in. Is that what we should emulate?

by PineTreez | 16th May 23, 6:34pm 1684218870

The forecast cost was somewhere along the lines of $5K for every man, woman and child in NZ. It would have to do an awful lot of moderating of generation demand (and prices) to give us all payback.

However, the further we have to go towards carbon zero the better the economics will stack up. Coal and gas have to go sooner or later. Biofuels might go someway to fill their gap wrt balancing the grid.

Keep in mind, Onslow generates ZERO extra energy (inefficiencies, leaks, evaporation mean it's a net negative), but makes use of water and energy that would otherwise have just been spilt downstream for zero gain. So we might generate 3MWh to pump water into Onslow, only for that water to generate 2.5MWh when it gets used, but if the water was just going to be ditched anyway, then we're still better off by 2.5MWh

by powerdownkiwi | 16th May 23, 7:36pm 1684222572

We need to be past that kind of comment, and thinking.

This is not a case of economics, or payback. Sorry about that, but the first world has pumped an artificial proxy-system so much, that it now has no relevance for true accounting (simply put, if you can print unlimited money as debt, who says it is a valid marker within a limited sphere of operations?

Only economists, and those who gather under their pulpits

by Hans Brink | 16th May 23, 7:35pm 1684222523

Pretty much always been my thoughts on this project also PDK. Seems to me future proofing is something vital for NZ self sufficiency.

by kiwimm | 17th May 23, 8:02am 1684267320

Build it now and it will get 7% cheaper each year thanks to inflation :)

by james108 | 17th May 23, 10:43am 1684277021

I actually think it will tap a small amount of extra energy, I read it on one of the reports. Can’t remember why but possibly we are diverting and tapping some extra water into the lake.

by Chris Morris | 16th May 23, 7:44pm 1684223051

People are unable to distinguish between power and energy. They are NOT the same

NZ has a significant shortfall of the former over the peaks and an even bigger one of the latter. Typically thermal is 500-1500MW over the daily double peaks (currently its over 1000MW and wind 65MW- Any solar would be zero) and about 7TWh a year. Maybe 10TWh in a dry year..

Having a pumped storage may "solve" your power requirements but will make energy shortfall worse. Generating more from the hydros at night means there is less water during the day for the peaks, increasing the fuel burn.

by Chris Morris | 16th May 23, 7:46pm 1684223170

Together with the thermal burn, the DC was near flat out so any Onslow couldn't get their power to the NI - especially as there would be no reserves.

by Hans Brink | 16th May 23, 7:50pm 1684223418

Yeah I get more confused the more I read about this but my gut feeling is that it's a good idea.

by Hardly | 16th May 23, 8:22pm 1684225332

You build wind and solar which are the cheapest form of power at the moment and combo them with the storage power of lake onslow. That way you have the extra power and the storage system ensures it’s available when you need it.

by Chris Morris | 17th May 23, 6:09am 1684260576

So you need to add all that overbuild, plus the transmission lines to service them, costs into the cost of Onslow. 10 TWh is about 20 windfarms the size of Waipipi and that was 0.5B - At least 20% more expensive now as the costs have gone up - read the trade papers on manufacturers losses where they are bleeding red ink. That Waipipi cost is about $130/MWh to break even and Onslow is arbitrage so it needs at least $150/Mwh to pay for it. Add in the other charges adds about $150/Mwh for the consumer. How much do you want to pay for power? How many billion are you budgetting for the capital spend??

by dunnock | 17th May 23, 8:33am 1684269207

pumped storage is at best 70% efficient. Nothing comes for free. The inter island bottleneck is a problem. Moving power 1000 km loses 7% of power. Onslow would be great if it was in the Waitakeres. This is a decision that needs to be considered not rushed. Tiwai needs to be paying a real amount for its power at least 20c per kwh . People commenting who know nothing about efficiencies need to do some background research before mouthing off.

by Chris Morris | 17th May 23, 6:13am 1684260808

If you take into account actual generation and transmission costs (the capital was paid off long ago), plus economies of scale, plus demand response Tiwai provides, the 5c a unit is about the price to give a profit to Meridien and Transpower.

by redcows1 | 17th May 23, 8:40am 1684269657

"the capital was paid of long ago".

And this is how Tiwai and Rio Tinto also do their accounting. Yea didn't think so.

by ChezD | 17th May 23, 11:17am 1684279056

Yes - the storage needs to be near the peak requirement - Auckland no doubt. Maybe we should shift Auckland to the South Island. Most of the discussion seems to miss that the need is for extra generation capacity for peak demand with some hard to determine dry and/or sun/wind lows that will stress the system anyway. Doing storage in the South where the major demand is in the North is daft. Hooking Manapouri to the grid might be a better idea for the extra capacity or at least charging Tiwai properly will help develop better resilience - I won't hold my breath on this as EV's need aluminium.

by blobbles | 17th May 23, 11:57am 1684281435

This is an important point. Now is not the future. If we build this and start accounting for electrical transmission costs and efficiency, it may be that we make power close to the dams cheaper. Which would very much influence decisions about where to put high power using industries. Canterbury/Southland may become more than just big farms, instead major industry/technology hubs. This is not to be ignored, the potential future benefits of the project are very unlikley to be included in the analysis as they are too dependent on politics and what if scenarios. But still huge potential.

For instance, AI and video rendering facilities are most likely going to be huge server farms in the future using a lot of power. As they can be anywhere given high speed internet tech/infrastructure, its best for them to be in a location that is fairly cool, to decrease air con costs, has plenty of electricity for cheap and with climate change, has green electricity. Thats a lot of boxes that Southland/Canterbury/lake districts tick.

by KH | 17th May 23, 6:46am 1684262794

Is there evidence projects are being delayed. A specific list of the delayed would give a better understanding.

by KH | 17th May 23, 6:52am 1684263120

Distributed generation goes a long way to solve the dry year problem. Pumped hydro is not the only option. I would like to see the comparison.

That comparison is not being published.

by dunnock | 17th May 23, 8:18am 1684268313

Distributed generation can also help to solve voltage drop and reduce the need for lines capacity increases but in general it only works when that generation is working. Both solar and wind are intermittent so cannot provide stability to the distribution network.

by powerdownkiwi | 17th May 23, 9:03am 1684271017

We need to step back further, and question whether we will be capable of maintaining the existing network.

by Roger the dodger | 17th May 23, 8:22am 1684268520

Anyone considering Cook Strait cable capacity?

And the project should co-locate solar with Onslow.

by QuickFox | 17th May 23, 8:39am 1684269599

An interesting point is that NZ currently loses 25% of the generating capacity from moving the electricity from the South Island to the North Island. The generation capacity should be situated in the North Island where it is consumed to get the best overall result for NZ generally. Can this project be done in the North Island, where the transmission lines currently exist, instant savings of 25%.

by dunnock | 17th May 23, 8:51am 1684270301

Yes there is a proposal for pumped storage at lake Taupo in the mix I do not know the details .

by powerdownkiwi | 17th May 23, 9:08am 1684271284

Bardsley appraised the whole of NZ, back around 2005, from memory.

Onslow is the best option, all things being equal.

by QuickFox | 17th May 23, 9:15am 1684271706

Was this peer reviewed appropriately??

by Beanie | 17th May 23, 9:14am 1684271654

Raising the level of lake taupo 20m should do it 🤣

by Hardly | 17th May 23, 6:06pm 1684303601

From memory if you were prepared to drop Taupo by 6m it would work as a good storage lake.

by Hans Brink | 17th May 23, 10:06am 1684274780

Maybe shift industry to the south Island, plenty of easy land in the Mackenzie basin. Why are investors of renewable energy so reluctant to start projects until a decision is made on Onslow. Must have merit.

by rastus1 | 17th May 23, 9:51am 1684273913

Let us not forget - Jenny Shipley and then John Key created this bloody power coy mess!

Thankyou National - whats your next disaster idea gonna be?

Sell Transpower complete with the Cook Straight cable perhaps?

I don't like Labour but National has been a disaster over time.

by Final Account | 17th May 23, 1:33pm 1684287225

If it goes ahead, as long as NZ designers and contractors are appointed and tax payer funds are not syphoned offshore to some foreign retirement or investment fund.

The government procurement office cannot fall for another international consortium dropping its pants for the tender proposal, only to rape and pillage the contract once engaged.

by Bryan Leyland | 17th May 23, 1:20pm 1684286458

Onslow does not work on the daily cycle. During a normal years it pumps any symptoms energy available during the floods to the other lake and, when we get a dry hydro year, it releases the water to make up for the loss of power from HYDRO schemes during dry years. This means that it has to have huge storage lakes which is most unusual. Most pumped hydro scheme can generate or pump for between six and 10 hours. Onslow operates on a scale of years.

by Erant | 17th May 23, 3:22pm 1684293738

A key problem in responding to a dry year is knowing that the country is actually in a dry year. There is a risk of letting go a lot of inventory in Feb/Mar/April only to find in May that there is excess wind or rain- so that what looked like a dry year proved to be pretty ordinary.

If there are these misleading cases, where inventory is dropped only to need building up again at cost with no real benefit, the economics of the project could suffer quite badly

by mfd | 17th May 23, 5:33pm 1684301610

I think you are misunderstanding. Onslow is intended to operate on more than one cycle. Yearly, tend to build up reserves when wet and draw down when dry. Daily, pump up when the wind and solar are pumping and release for the evening peak. Perhaps a seasonal cycle as well? The cycles will be superimposed on one another. In a wet year, the daily inflows can be expected to be larger than the daily outflows.

The year-on-year operation will never pay the bills, the daily load balancing arbitrage will generate useful income. The added advantage is the daily load balancing allows us to build significantly more intermittent generation than our grid could currently handle, without risking black outs or backup thermal generation.

by Peter Olorenshaw | 26th May 23, 10:18am 1685053109

Onslow could and should be working on a daily cycle as Simon Upton points out as well as doing the dry hydro year thing. In this way it puts a floor under what wind and solar generators get in times of surplus and a cap on the max. price that generates can charge. However Onlsow may be the wrong choice to do this - perhaps the Tekapo-Puakaki twin would be a better scheme for radically less money but with half the storage (you pump water up to the canal from Pukaki, run it backwards along the canal and pump it up to Tekapo from the other end of the canal - which has been laid so flat it can in fact flow backwards I believe)

by nzforall | 17th May 23, 2:28pm 1684290504

And what pray will the government do with manapoiris power when rio tinto pack their bags and bugger off.

Its a water to hydrogen plant that the country needs.

by powerdownkiwi | 17th May 23, 9:11pm 1684314709

Please do a little physics studying, before making such sweeping comments.

Hydrogen is an energy store, not a source. If you're using hydro electricity, you are better using it directly rather than via hydrogen. And you're better storing it in lakes; nothing really contains hydrogen, and that's made worse because it tends to need pressurised for volume/energy reasons.

A good study is of Energy Return on Energy Invested (EROEI). All life, all society needs to be in positive EROEI territory. When something is a loss - battery-charging/discharging, energy-form transition - you need to be very sure the loss is worth whatever you get out of it. We have been used to a massive energy-surplus, but that is reducing fast now.

by Peter Olorenshaw | 26th May 23, 10:38am 1685054337

A lot of people are under the misapprehension that fossil fuel generators are used just for peaking - this is what should be happening but is not in NZs distorted market system. Here gas generators are often kept running through the day and night to keep the price high. Here all generators get the highest price that any generator offers for the next half hour. By keeping some of their hydro back and running their fossils they get windfall profits on their cheap hydros. This is why we need something like Onslow that will buy surplus solar and wind power at a reasonable price and sell power back into the market to block out the fossils at times other hydros are being held back - as well as dong the dry hydro year thing.