Lake Onslow pumped storage

Comment by Earl Bardsley, University of Waikato, June 2023.

There are many misconceptions about pumped storage at Lake Onslow, like it is in the wrong island and it will have a negative energy effect. A listing can be downloaded here, along with responses.

The current government investigations of pumped storage at Lake Onslow originated from the 2019 report Accelerating electrification by the Interim Climate Change Committee, which was tasked with looking at 100% renewable power generation options for dry years. Overbuilding renewable generation capacity was rejected because constructing new generating capacity doing nothing for most of the time would result in high electricity prices – estimated as a 14% power price increase for residential users, 29% for commercial users, and 39% for industry users.

As a possible alternative, the Committee recommended further investigation into pumped storage. Focus was on Lake Onslow in Otago, which was first identified for its pumped storage potential by earlier work by Waikato University. The government then established the NZ Battery team within MBIE to study the Onslow option in more detail, along with other possible dry year alternatives.

The Onslow pumped storage scheme would be the world’s largest in terms of its energy storage capacity (5 TWh).

A video overview can be found here.

In addition to energy storage, the Onslow scheme also offers the possibility of climate change adaptation by acting as a drought buffer in Otago. Further details and other water resource possibilities can be downloaded here.

The Lake Onslow reservoir on February 21, 2023. Energy storage would be achieved by raising the lake to have an upper level about 80 metres above the present level. Credit: Yasaman Karaminik.

Approximate extent of raised Lake Onslow for 5TWh of energy storage. The current Lake Onslow is shown in black. The blue outline is the minimum water level for the new lake, the yellow outline is the maximum level, and the red line is the approximate position of the new Onslow dam. The raised lake would most probably be linked to the Clutha River by a 16 km tunnel. Google Earth image.


Three dry year alternatives are under present consideration by NZ Battery: (1) Lake Onslow pumped storage (1000 MW), (2) Lake Moawhango pumped storage (570 MW), and (3) a portfolio of technologies not involving pumped storage. The Moawhango option is largely unknown because little information has been released. Both the Onslow and portfolio options have significant construction costs of $15.7b and $13.5b respectively, with the latter having a higher operating cost.

An announcement will be made in July as to whether the Onslow scheme will advance to more detailed study, which would incorporate its total value to the nation over a 100-year operating lifetime. That study would be terminated if the National Party wins the election in October. In that event, pumped storage at Lake Onslow would not be considered again and there would then be a shift back to hydrocarbon exploration.

If it was constructed, the Onslow scheme would be the greatest national impact achieved by a research concept originating from a New Zealand university. Although at the other end of the country from Lake Onslow, the University of Waikato can take some pride in being both the initiator of Onslow pumped storage studies from 2005. In this regard, I would like to acknowledge the work of my University of Waikato former research students, Sarah Bear and Mohammed Majeed:

Sarah Bear (2005). Hydrological evaluation of pumped storage in the Onslow-Manorburn basin (MSc).

Mohammed Majeed (2019). Evaluating the potential for a multi-use seasonal pumped storage scheme in New Zealand’s South Island (PhD).

Where would the energy come from?

It is sometimes asked where the energy would come from to fill Lake Onslow. There are times in New Zealand when the wind is blowing and hydro storage is close to full, so power sells almost for nothing all over the country. The prices below are per MWh.