Meridian moots drilling tunnel into Southern Alps, new dam to raise Lake Pukaki over 5 metres
Friday, 21 November 2025
Meridian Energy has floated the idea of building a new dam at Lake Pukaki, raising the lake - and even drilling a tunnel in the Southern Alps to divert more water into the lake.
Speaking at a conference for investors, head of new ventures Murray Hill described the idea of a significant raise of Lake Pukaki as a possible “long-term” vision for beyond 2028.
Hill made clear the idea was only at the concept stage and did not provide more detail about what drilling a tunnel into the Alps would entail.
Officials from the Ministry of Business, Innovation and Employment (MBIE) noted in 2021 that if the lake could be raised 29 metres, that would increase its storage potential by a massive 5 terawatt-hours (TWh).
That would equate to about 12% of the country’s annual electricity demand and about the same amount of power storage that could be provided by a pumped hydro scheme at Lake Onslow — a venture that a group of power industry veterans are now seeking to revive.
However, a lake raise on that scale would have huge implications, which would include flooding the existing State Highway 80 to Mount Cook.
Hill indicated Meridian’s “strategic goal” was much smaller and involved creating an extra 1TWh of power storage and an extra 1.3 gigawatts of hydro generation, from investments that could be spread across Pukaki, Manapouri and Te Anau.
Each additional metre of water at Lake Pukaki would add 130 gigawatt-hours of power storage to the energy system, according to the information presented at the conference.
That implied a possible raise of “a little bit more” than 5 metres could be part of the vision, he confirmed during questions from analysts.
Hill said raising the lake by a metre or two, retaining its current dam and getting more power out of the lake with “minimal engineering” could also be an option in the nearer term.
“Beyond that, you'll get to some point where the ‘ambition’ triggers a new dam, essentially. So understanding that, as well, is something that we will progress.”
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Meridian had started looking into the possibility of diverting water from adjacent valleys into Lake Pukaki, he said.
“It's pretty obvious why we like that. We've got six power stations that can generate using any water that we can add into that catchment.
“A lot of these opportunities are linked. You can imagine, if you’re raising the lake, some additional water is going to make that project even more valuable.”
Meridian Energy has been dusting off past hydro plans after Economic Growth Minister Nicola Willis announced last month she had written to the company and fellow partly state-owned gentailers Mercury and Genesis in August, encouraging them to increase their investments.
Willis made clear the Government could be willing to participate in a capital raise, alongside other investors.
Meridian chief executive Mike Roan said the company was “getting back into the hydro development game” in part because of an unexpectedly sharp drop in natural gas production, that has reduced power firms’ ability to use gas-powered generation to meet peaks in electricity demand.
Strategy manager Rory Blundell said “we think, for a host of reasons, the better option for New Zealand is to really take another hard look at hydro”.