National Party cannot ‘terminate’ Lake Onslow power scheme, says academic
Wednesday, 6 December 2023
The Government cannot permanently kill off the Lake Onslow power scheme, which is likely to come into consideration again by a future Labour-Green government, according to the academic who first proposed its development.
Waikato University professor Earl Bardsley said that he still believed the power scheme would prove the most cost-effective way to address the country’s “dry year” problem, following the phase-out of coal and gas electricity generation.
Energy Minister Simeoen Brown announced on Sunday that he had “scrapped” the power scheme, with all work on it ceasing and “decommissioning set to begin”.
“On top of its $16 billion price tag, the Lake Onslow scheme would run into likely issues with consenting and it wouldn’t be delivered for at least another decade,” he said.
Despite the reference to the scheme being scrapped, the former government had not made a decision whether to build the pumped hydro power plant, which had not been expected to come online before the mid 2030s if it got the green light.
Bardsley said the National Party had opposed Lake Onslow before its costs became clear, accusing the party of being “in the pockets of the gentailers” which lobbied against the development and being worried about what the investigations might show.
“If you are selling hydro power at the selling price of coal power, you for sure wouldn't want a change in the electricity market.”
Bardsley said that when the government changed, he first thought that would “be the end of Onslow”.
“However, if you think of a 10-year build and 100-plus years of operational life, a three-year setback is not a lot for a scheme that would play a significant energy role for the rest of the century.”
Labour energy spokesperson and former minister Megan Woods said it was too early to say if a future Labour government might revive investigations into Onslow.
As part of its NZ Battery Project, the Ministry of Business, Innovation and Employment (MBIE) had been investigating whether a pumped hydro scheme at Lake Onslow was the best option to ensure the country had sufficient power during “dry years” when hydro generation was low, following the phase-out of coal and gas.
But it had also been considering and appearing to warm to an alternative “portfolio” approach that could involve building standby geothermal power stations and relying in part on burning wood waste when hydro flows were low.
Before the election, Woods had been expecting to make a decision mid-next year on which option to take forward.
Commenting on why it was too soon to say if Onslow might be revived, Woods said she needed clarity from the Government.
“Are they continuing with the New Zealand Battery Project? They are talking about doubling or tripling the amount of renewable electricity produced in New Zealand, largely from intermittent sources and that will require storage.
“Pumped hydro was one option we were looking at. I wait to see what the Government is going to put in place in terms of providing security of supply to New Zealand's electricity system as it increases intermittent generation.”
The results of the investigations into Lake Onslow would be kept on file, rather than destroyed, government officials confirmed.
MBIE policy director Susan Hall did not indicate that it had been instructed to stop work on the detailed business case for the Battery Project’s portfolio approach.
“The information held by MBIE on the Lake Onslow pumped hydro scheme will be retained in accordance with MBIE’s records management policy, consistent with the Public Records Act,” she said.
Hall said MBIE officials would be meeting with Brown to discuss the Government’s “broader work programme” for the energy portfolio.
“The size of the team working on Lake Onslow has fluctuated over the years, and some staff members’ responsibilities have focused on the project more broadly.
“We are currently working through the implications of stopping work on the Onslow option with individual staff, she said.