WORDS BY RICHARD RENNIE
The cancellation of the proposed Lake Onslow pumped hydro battery project was a priority on the government’s early “to do” list as it took the reins of power late last year.
The $16 billion plus project would have been the country’s single largest infrastructure project ever, dwarfing even the extensive hydro schemes that dominated the development landscape of the 50s, 60s and 70s.
That cost and the decade long lead time were too large and too long for a government intent on balancing the books and delivering on election promises. So, on 3 December, Minister for Energy Simeon Brown declared Lake Onslow dead.
The project was intended to act as a back-up for New Zealand’s electricity supply, capable of providing electricity over “dry years” when the country’s hydro dam network’s supply is lowered by lack of snow and rainfall.
At present the bulk of the country’s base load supply comes via Huntly power station, a coal fired plant targeted for shutdown or alternative fuel use, given its contribution to 5% of the country’s carbon dioxide emissions.
Low rainfall and lake levels can mean Huntly is called upon to boost supply, as in 2021 when it doubled its gigawatt hour output from coal compared to the 2020 financial year and was four times more than that emitted in the 2018 financial year.
A shortage in gas supply due to pipeline issues meant that despite its dual fuel capability, Huntly had been compelled to spend 95% of its time burning through coal fuel.
Genesis, owners of the plant have been aiming to reduce generation emissions by over a third by 2025, to remove about 1.2 million tonnes of carbon a year from its emissions profile.
Onslow offered a low emissions, “green” alternative to Huntly’s base load supply, with a high capital cost but relatively low operating cost profile, given its use of water rather than fossil fuel.
Water would be pumped from the Clutha river into an enlarged Lake Onslow east of Alexandra in Central Otago when power was cheap. Here it would be stored until required and then released through turbines in an underground power station to generate electricity as needed.
As the country’s largest ever hydro project the lake project would have been capable of generating up to 1,000mW of electricity, or over double the massive Clyde dam’s capability when all four of its turbines are running.
Lake Onslow would also have been capable of storing five terra-watt hours, equivalent to half a year of full production, and double that of Lake Pukaki’s storage.
The Lake Onslow project has loomed over the local community and New Zealand’s entire energy sector for the past five years as its possibility was mooted.
For locals in the small Central Otago community of Teviot there has been the prospect for those farming around the lake their land would be flooded. But the project had also bought hope for new jobs created in an area where seasonal employment in fruit harvesting dominates job options, and most young people leave the area for employment. The project’s construction was alone expected to generate up to 4,000 jobs.
Last year Energy Resources Aotearoa that represents the energy resources sector including oil and gas warned the decade long window to Onslow’s completion was simply too far out, with its presence making it harder for companies to justify investment in other generation assets.
As a switch to electricity from traditional higher emitting fuels continues, the sector could foresee a pinch on base load capacity. This would only be heightened by growth in solar and wind generation, neither which offer base load certainty given the variability of sunshine and wind speeds.
The association has pointed to independent reports showing there were more efficient pathways to deliver reliable, affordable sustainable energy options. A range of solutions across different generation methods and a cut in the red tape to get them commissioned have been the recommendation of the sector.
Early in the new year it appears the government may have in part at least listened to these requests. The government has announced it intends to cut the red tape demands that sit around energy generation consents.
However, an alternative “portfolio” energy proposal also running alongside the Onslow project investigation is also due to cease. This was to investigate geothermal energy, bio-waste, and other power options to reduce future power loss risks.
This proposal included government support for the construction of geothermal power stations acting as “standby” units for short supply dry years, along with the capacity in plants to burn wood waste, replacing coal and gas.
Instead, officials are now due to work with Simeon Brown to determine priorities for a wider electricity system work programme that relates to supply and reliability.
Possible options that could be implemented quicker than Lake Onslow’s 10-year lead include adding grid-scale batteries to smooth out and store the energy flows from variable solar and wind generation, and even the use of EVs’ batteries to supply the grid when not being used.
The continued use of fast starting, gas fired generation plants also provide a good, and relatively quickly built, standby.
Meantime Huntly, New Zealand’s base load stalwart generator has also successfully undergone trials using wood-based fuel in place of coal.
Last year the Canadian sourced wood pellets proved the plant could run on 100% wood fuel with a 90% reduction in emissions compared to coal.
Genesis has stated it wanted to develop a local biomass source for fuel. Its preference for this, along with another big energy user like Fonterra also seeking local biofuel could provide invaluable cornerstone catalyst for a local biofuel industry.
While the cost and lengthy time frame for Onslow has been acknowledged by all, what remains less certain is a clear plan from the new government on how the country’s need for sustainable, low emitting base load power in the meantime will instead be met. In absence of this, uncertainty will continue to hang over the market, as electricity demand continues to creep ever upwards.
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