Work on alternative to shelved Lake Onslow power project to cease

Friday, 26 January 2024

Officials will stop developing a detailed business case for a project that could have seen the Government invest in geothermal energy, bio-waste plants and other initiatives to reduce the risk of future power cuts and electricity price surges.

The former government had been evaluating two ways to ensure the country has sufficient electricity in “dry years” when hydro lakes are low, following the retirement of coal and gas generation as a back-up.

Energy Minister Simeon Brown terminated investigations into the Lake Onslow pumped hydro scheme, which had become a political football, in December.

At the time, the fate of an alternative “portfolio” proposal that the NZ Battery Project team at the Ministry of Business, Innovation and Employment had been researching as an alternative to Lake Onslow, and which it appeared to be warming to, had been unclear.

That proposal could have seen the Government support the construction of geothermal power plants that would have been held in reserve for times of short supply as well as facilities to burn wood waste and a variety of other measures to fill the role in the electricity system currently played by coal and gas.

But a spokesperson at the Ministry of Business, Innovation and Employment indicated on Wednesday that work on a detailed business case ordered by the former government to assess that option had also now ceased.

“Officials are not continuing business cases for specific energy storage projects or a group of projects,” she said.

Instead, they would work with Brown “to determine the scope and priorities for its wider electricity system work programme related to security of supply and reliability”, she said.

Waikato University professor Earl Bardsley, who first saw the potential in Lake Onslow, said stopping work on both dry-year options would “extend energy policy uncertainty until at least the next change of government”.

“The dry year risk is not going away and we can't have a green transition without a collectively-agreed mechanism for handling low hydro inflows,” he sai