Government policy is for New Zealand to transition toward a low-emissions economy, including 100% renewable electricity to replace fossil fuel use in transport and industrial heating. Hydro will remain a significant component of the required increased power generation. There is thus a need to buffer any transformed economy against future dry years, given limited national hydro storage capacity of less than 4.5 TWh. Dry years happen from time to time and public calls for reduced electricity consumption were made in 1992, 2001, 2003 and 2008. Pumped storage at Lake Onslow is presently one favoured option for providing backup power in future dry years. Onslow and other possible dry year alternatives are under current review and the next step is for a decision to be made on the preferred option – see the NZ Battery web page set up by MBIE.
The NZ Battery team will evaluate the dry year alternatives as referenced against Onslow pumped storage. However, the options outside of fossil fuel backup do not appear very encouraging. For example, building a surplus of renewable generation (renewables overbuild) has been estimated by the Interim Climate Change Committee to cause a 14% increase in household electricity prices and a 39% increase for industrial users. Establishing a large hydrogen plant in Southland to be switched off in dry years (currently under investigation by Meridian and Contact) seems unrealistic because switching off cannot add water to already low lake levels. Battery purchase for dry year buffer would cost trillions of dollars and the batteries would still have to be replaced from time to time. Hydrogen generation and storage would be hugely energy-inefficient and it would be difficult to store the volumes needed. Allowing massive lowering of existing hydro lakes (cheapest option) would have a dramatic visual and environmental impact.
In addition there are rumours (possibly no more than that) that Mercury is considering an option of lowering Lake Taupo in a dry year and Genesis is contemplating forming a large lake in the upper Moawhango River near the Desert Road, with a long pumped storage tunnel connecting to Lake Taupo.
2. Onslow energy storage potential
Energy storage at Onslow would be achieved by building an earth dam at the Teviot River outlet and raising the present 8.3 km2 Onslow reservoir to a higher level than its present 684 metres. Water would be pumped up into the Lake from either the Clutha River or Lake Roxburgh. The capacity to store energy (gravitational potential energy) depends on how much the lake water level is raised above the existing Onslow level of 684 metres. Fig. 1 shows the energy storage for an expanded Lake Onslow, for varying water level elevations. Fig. 2 shows the shoreline of Lake Onslow if raised to 680 metres. The NZ Battery web page shows the lake outline for 660 metres. The effective energy storage is also a function of the minimum operating level because it would be unlikely for environmental reasons to have drawdown right back to the original lake level.
A further energy increment could be gained by constructing a short tunnel linking the upper Manorburn basin to the expanded Lake Onslow, coupled with increasing the height of the existing upper Manorburn Dam to 780 metres (existing upper Manorburn dam replaced with a 60-metre concrete dam). Combining Onslow and Manorburn, there is possibility for about 8 TWh of effective storage. There are two possible options by which Manorburn water could be coupled with Onslow pumped storage. One is for the tunnel to have two-way transfer of water through the linking tunnel, so that Clutha water enters the Manorburn-Greenland reservoir.
The other option is to have only one-way transfer of water (via a valve control) from the Manorburn-Greenland reservoir to Onslow. In the latter case the Manorburn-Greenland higher water level is achieved by inflowing local streams only. This water is only ever released to Onslow as reserve in the event of a significant New Zealand dry year for hydro power. The advantage here is that existing water quality is maintained in the Upper Manorburn, while at the same time increasing its volumetric quantity, perhaps enhanced by some stream diversion. A further advantage is that the upper Manorburn energy increment, which is in excess of Lake Taupo energy storage capacity, would be achieved without energy expenditure. The negative aspect is that fill to the new higher level would take some years from local stream inflows, so the water would only be used for electricity in an extreme dry year.
Fig. 1. Energy storage potential of the Onslow Basin as a function of water level above the existing Onslow reservoir. From Majeed (2019). Note: 1,000 GWh = 1 TWh.
Fig. 2. Lake Onslow extent if raised to 780 metres elevation. From Majeed (2019). A connecting tunnel is shown here linking to Lake Roxburgh. An alternative would be to have the tunnel linking Lake Onslow with the Clutha River downstream of Roxburgh. The latter tunnel option might require construction of another dam on the Clutha. Map source: LINZ
Incidentally, the energy storage at Onslow would not be lost to a combination of evaporation and leakage, as has been recently suggested. If there was a hole at the bottom of Lake Onslow or it was susceptible to disappearing into thin air by evaporation, then the present Lake Onslow would have long since vanished.
3. Onslow pumped storage operation
In addition to its primary role of dry year buffer, Onslow pumped storage could also play various short-term roles. In particular, with 1000 MW of installed generation capacity it could buffer the wind power fluctuations from about 2000 MW of new wind generation. Onslow would also aid the transition to a low-emissions economy by avoiding dry-year high wholesale electricity prices (as at present), which will tend to deter some industries shifting to electrification and away from fossil fuel energy. Interestingly, this critical need to avoid high electricity prices in dry years seems not to have been taken into account in the Climate Change Commission’s final 2021 report.
Onslow pumped storage would operate at perhaps 75% efficiency, taking system losses and lake evaporation into account. That is, it would have to purchase more electricity from the grid than it would sell.
Nonetheless, market-based operation of Onslow pumped storage is likely to result in some overall net power gain to the nation. This is because Onslow would purchase power for seasonal pumping at low-price times when South Island hydro lake levels are high, resulting in spring/summer release of some of their water for power generation. This reduces the frequency of high hydro lake water levels, in turn reducing spill loss from any sudden floods into already-high lakes. Simulations in the Majeed thesis indicate that as much as an additional 100 MW could be gained on average if the Waitaki power scheme was operated explicitly to minimise spill by keeping Lake Tekapo and Lake Pukaki levels near to their respective mid-ranges.
In the current market environment that rewards generation at times of high prices, Onslow would be just one player. Sometimes the Onslow generation bid will win against other hydro. But sometimes, say, Waitaki generation would win and some water for generation would be released from Lake Pukaki. The net effect of such market operation is that in a dry year all the hydro lakes would decline along with Onslow, but at a lower rate than if Onslow was not there. With a return later to higher inflows, the hydro lakes would refill to provide security but Onslow might not start pumping until there was sufficient water being released from the hydro lakes to lower the prices again. The waiting time for this situation is dependent on the weather-related recovery time of the hydro lakes. For this reason, it is not helpful to ask the question “how long would Onslow take to refill after a dry year?” The minimum possible time to refill an empty Onslow is found by dividing the Onslow water storage capacity by the maximum pumping rate. However, the market would ensure that recovery would be a longer time than this, while the hydro lakes refilled first and then prices reduced. It should also be noted that the Onslow energy storage capacity is so high that is is extremely unlikely that both it and all the current hydro lakes could simultaneously be emptied in a dry year.
4. Onslow impacts
If constructed, Onslow would be a major civil engineering scheme and environmental impact is unavoidable. There would, however, be little impact on the Clutha River itself because Onslow would generate power as a consequence of high pressure and not of high discharge. Also, Onslow operation would tend to shift the Clutha discharge more toward its mid-range flow. This is because times of highest prices (generating mode) will tend to coincide with low Clutha flows. Conversely, times of lowest prices (pumping mode) will tend to coincide with high flows.
The main environmental impact would be the creation of the new lake, much bigger than the original Onslow reservoir and comprised mainly of lower-quality Clutha water.
In normal years, it would be expected that the new lake will have some seasonal fluctuation with levels not greatly below the maximum. In dry years, there could be considerable lowering of water level and consequential change in lake area. For example, it can be seen from Fig. 1 that lowering the lake from 760 to 720 metres would expose about 30 square kilometres of previously submerged land. For this reason, it would be necessary to previously water-blast and remove the soil cover so that exposed land was always Central Otago schist rock and not former soils that would be subject to dust generation.
An unavoidable consequence of any degree of raising of Lake Onslow would be destruction of the existing Onslow wetlands (Fig. 3), which are themselves a remnant of the original Dismal Swamp wetlands that were flooded to create the present Onslow reservoir. In a similar way, creation of the nearby Loganburn Reservoir was at the expense of largely flooding the former Great Moss Swamp (Fig. 4).
Fig. 3. The Lake Onslow wetlands were once part of Dismal Swamp, now submerged. Map source: LINZ.
Fig. 4. The Great Moss Swamp is not so great anymore, mostly flooded by the Loganburn Reservoir. Map source: LINZ.
A further environmental impact of Onslow relates to water quality because any invasive plant species present in Clutha water will also be introduced by pumped storage into to Lake Onslow and then to the Teviot River. Subject to further investigation, the Teviot River is not likely to be significantly impacted in this regard because its steep channel gradient will be amenable to flushing flows from time to time.
The various possibilities of Onslow environmental impact are presently the subject of a study by the Department of Conservation and will presumably appear on the NZ Battery web page in due course, forming part of the final decision as to whether to proceed with Onslow.
In a sense, Onslow pumped storage can be seen as a continuation of the many environmental impacts on the Otago natural environment, including the flooding of Dismal Swamp and the Great Moss Swamp, the loss of the Cromwell Gorge river environment from the Clyde Dam, and the flooding of the original Lake Hawea shoreline for hydro storage. In this more environmentally aware age, the question then arises as to whether acceptable Onslow mitigations might be devised to at least give a net neutral effect when all factors are considered, funded as part of the total construction budget. Mitigations cannot be imposed by anyone and can only arise from joint community agreement. The possibilities outlined in Section 5 are therefore just indicative of examples which may or may not be worthy of further consideration, and of course are only relevant in the context of Onslow pumped storage proceeding.
5. Environmental mitigations?
(1) Could floating wetlands be established on the Loganburn Reservoir?
Subject to available Onslow offset funding and the support of the Loganburn Reservoir owners, it might be possible to construct floating wetlands over a portion of the reservoir. This would be analogous to a partial restoration of the Great Moss Swamp. There is a carbon sequestration aspect involved here also, in that organic fragments from the floating wetland would accumulate on the reservoir floor. There is also likely to be an effect of some reduced reservoir evaporation loss from the new wetlands. If a floating wetland were to be constructed, it would need to proceed by increments to ensure there was no impairment of the important role of the reservoir in the supply of summer irrigation water to the Maniototo.
(2) Shifting Waitaki River flows back to the original seasonal discharge regime
This is not a planned and funded mitigation as such, but would arise in any case from the market operation of pumped storage at Onslow. Like all the major rivers with headwaters in the Southern Alps, the natural flow regime of the Waitaki River is for high flows in spring and summer and low flows in winter when much of the mountain precipitation accumulates as snow. Lakes Tekapo and Pukaki are presently managed for hydro power by holding back high spring and summer inflows in anticipation of the lower winter inflows and increased winter power demand. That is, Waitaki River flows have been increased in winter and decreased in summer. Commercial Onslow operation would purchase power for pumping when wholesale electricity prices are low, leading to summer water releases from Lakes Tekapo and Pukaki. This shift back to higher summer flows to some degree re-creates the former Waitaki River natural seasonal flow regime.
(3) Could Lake Hawea be restored?
Using Lake Hawea and other South Island scenic lakes for seasonal hydro storage has had significant environmental impacts. The original lake shoreline environments had evolved and stabilised over thousands of years following the retreat of the glaciers. Raising the lakes for hydro storage creates enhanced local erosion from wave action on the soft glacial tills along the line of the new water levels that had never been part of a lake shoreline system. In addition, the imposed seasonal cycles on the new shorelines are greatly in excess of the small natural variations in the original lakes.
Lake Hawea is the only lake in the Clutha catchment that is used for hydro power storage operations, enabling some degree of control of water flows to Contact Energy’s Clyde and Roxburgh power stations. The other natural lakes in the catchment, Wanaka and Wakatipu, are uncontrolled. Lake Hawea was raised in 1959 from its original 328 metres above sea level, with the highest water levels now extending to 346 metres. Seasonal water level fluctuations of 8 metres are presently permitted, compared to the original natural variations that were about 1 metre and of short duration. The present seasonal water level fluctuations have reduced the lake’s aquatic plant diversity compared to nearby Lake Wanaka. Also, periods of high lake levels concurrent with wind waves have created eroding banks near parts of the Hawea township and elsewhere. Lake Hawea remains beautiful but there are some who can still recall how it used to be.
Hydro storage in Hawea and the other South Island lakes has been an essential part of maintaining resilient national power supply. However, significant new hydro storage capacity at Lake Onslow offers an alternative as far as Lake Hawea is concerned. If there was, say, 8 TWh of storage capacity established at Onslow then the total Clutha catchment energy storage capacity would be 8.35 TWh. The decimal places represent Hawea storage. With 8 TWh of Onslow storage and at least 1000 MW of Onslow installed capacity, there would no longer be a need for the 0.35 TWh storage component at Lake Hawea. Fig. 5 shows relative storage magnitudes.
Fig. 5. Lake Hawea and other hydro storage magnitudes. Ngaruroro is a potential pumped storage scheme near Taupo, but unlikely to progress because of both engineering and environmental considerations.
Lake Hawea could lowered and its 90 km of flooded shoreline restored to its original water level. Some forest replanting would be required to restore the regions of drowned forests (Fig. 6). Outlet water releases would be maintained at about equal to lake inflows, so the Hawea River would largely revert to its pre-hydro state. In this way, the present Lake Hawea storage and seasonal variation would be transferred to Onslow. With Onslow operational, there would be no obvious national good in maintaining Lake Hawea in its present flooded state. There would be no drop in well water levels away from the lake and details could be worked out with respect to continued ease of access of irrigation water.
Fig. 6. Only the upper branches are visible of this submerged forest, drowned by raising Lake Hawea for hydro storage. Picture source here.
(4) Could a new wetland/lake complex and upland reserve be created near Onslow?
The gentle topography of the upper portion of Bonds Creek (north east of Onslow) could enable a low dam to create of an extensive shallow lake (Fig. 7). Subject of course to willingness of the landowners concerned, an Onslow mitigation fund might purchase the land and create the new lake.
Fig. 7. Maximum extent of a new lake (dark blue) that could be created from a low dam (red) in the headwaters of Bonds Creek, with lake level at 760 metres asl. Map source: LINZ
If the lake was in fact constructed, it would be something of a first in New Zealand – a new lake created purely for environmental gain. Something in the same philosophy is seen in the recent purchase of a dairy farm for conversion to a wetland to improve the water quality of Lake Horowhenua.
If there was willingness from all concerned, ecological studies would need to be initiated to establish the likely extent of new Bonds Creek wetlands and also evaluate its possible trout fishery development. Ideally, the entire catchment area of the new lake could be set aside as an Otago upland reserve, permanently ensuring no future water quality impact from agricultural development.
The Onslow pumped storage scheme is a large and many-faceted project. It is perhaps natural that some should react with initial trepidation and caution. Solution of the New Zealand dry year problem is now recognised as essential, but it could happen that the NZ Battery review decides on some other course of action. However, if Onslow proceeds then there need not be economic losers in the process, with many different gains to be made in different aspects at both national and regional levels.
All this is not a personal advocacy of Onslow pumped storage as such. No individual can advocate large expenditure on a major project, as opposed to being spent in some other part of the economy. But within the stated goal of 100% renewable power, Onslow pumped storage is a serious contender to handle the issue of dry year buffering.
7. Onslow in the long term – a speculation
If Onslow pumped storage is constructed, it is well located to be in operation for a very long time. That is because Lake Onslow has only small inflowing streams which carry minimal sediment loads. In contrast, the Kawarau arm of Lake Dunstan is already accumulating the anticipated input of silt derived from the Shotover River.
The concept of pumped storage at Onslow has been around since 2005. However, motivation for its possible construction only dates from 2020. That is when its value was seen by the New Zealand government in terms of one possible means to buffer a future renewables-based and electrified low-emission economy through dry years.
However, it would be wrong to see Onslow as a means to transition to an end point of a sustainable nation based on renewable electricity. This is because renewable power is not sustainable and is only desirable in the sense of being a better option than fossil fuels. That is, the renewables scenario is something we transition “through” rather than “to”.
Of course, the sun will always shine and the winds blow. However, our electricity demand in the long term will always creep upwards and there must come a time when we reach peak renewables. It is neither desirable nor even possible to keep adding windfarms onto the next ridge, or dam the last stream. Variations on the renewable theme – offshore wind farms, better light bulbs, solar panels, tidal power in Cook Strait etc – are nonetheless just kicking the can down the road and only delaying the inevitable crunch point of peak renewables.
In the long term, a nation with a large hydro and wind component is vulnerable to climatic shifts. In New Zealand’s case, we are dependent on the absence of any climatic shift resulting in a major weakening of the westerly wind system – the driving factor contributing to both our wind power and hydro rain. No amount of new hydro storage, Onslow or anywhere else, could offset such a climatic shift. The encouraging aspect is that the consensus appears to be that the westerlies will strengthen over the South Island. But what if it went in the other direction?
Our alternatives against a long-term negative climatic shift in the far future are not great because we are a remote Pacific island. An undersea power cable from Australia or Asia is a remote possibility. However, even if was feasible it would still be undesirable because we would be at the mercy of whoever was at the other end of the cable. Importing hydrogen, green or otherwise, for hydrogen power stations would be equally undesirable. This is because hydrogen is not amenable to large scale safe storage to provide buffer against the uncertainty of supply from a global hydrogen market. The “safe” aspect here is important because hydrogen and its derivatives are highly explosive. History tells us that if something can blow up then, sooner or later, it will.
If New Zealand continues down its renewables path then we will be sleepwalking our way to nuclear power stations. That will be because by the time the renewable peak hits, it will most likely be too late to go to anything for the next power increment other than nuclear, unless we go back to fossil fuels.
It sounds radical but there is one alternative possibility – a globally-subsidised and emission-free solid fuel as a cheaper alternative to coal for power stations. Call it newfuel for now. Given plentiful supplies of newfuel and power stations to burn it in, there would be much less interest in maintaining or building coal-fired power stations. An essential requirement would be that newfuel is produced using emission-free energy.
Why would newfuel be subsidised and who would subsidise it? It would need to be subsidised because the production of newfuel would be very energy-inefficient. That is, it would take more energy to produce newfuel than the amount of energy it contains. In other words, like green hydrogen, newfuel would be an energy vector and not an energy source. The subsidy for newfuel production would be as part of the fight against global warming. It should therefore be paid by those nations who have contributed the most to the human-generated greenhouse gases that have accumulated in the atmosphere.
New Zealand would stand to gain from a global newfuel scenario because we could avoid nuclear power. A retrofitted Huntly power station is a possibility. Another power station might be constructed near Balclutha for the South Island, taking advantage of the Clutha River for cooling. There would no longer be a need for dry year or seasonal hydro storage, so the raised scenic southern hydro lakes could all be restored to their original natural shorelines. Hydro power would still be of importance for doing what it is good at – meeting rapid demand fluctuations such as the daily demand cycle and the variabilities of wind power. A newfuel power station might even be set up to offset some of the worst impacts of hydro power. For example, the Manapouri station might be permanently closed with the re-creation of the Waiau River seen as the greater national good.
What of Onslow pumped storage in a newfuel scenario? The large pumping/generating capacity of Onslow would still be of value because it is well suited to smoothing power fluctuations and demand variability. However, its large energy storage capacity would no longer be required and the lake would now fluctuate only a few centimetres about its mean level. Future generations would determine what that level should be. Perhaps it would be the original reservoir level or maybe some higher level for recreational and ecological purposes.
A particular attribute of newfuel that would be helpful for purchasers would be ease of stockpiling. The idea would be to import more than needed and build up a multi-year stockpile to ensure security against any supply interruptions.
It would be helpful therefore if New Zealand could be a leader in both newfuel development and its power stations. Our climate is our averaged weather and nothing we do here will change our weather. On the other hand, being part of newfuel development means playing a direct role against global warming. We do have some precedent in that the first paper proposing a global newfuel (metallic silicon) originated in New Zealand.
An interesting feature of silicon as a fuel is that, lump for lump, it has the same energy on oxidation as burning high-grade coal. Its advantage is that it is abundantly available in the oxide form as desert sand and generates no emissions as a power station fuel. Its “ash” is essentially just fine sand and the silica fuel could be stockpiled indefinitely without degradation. A research project at the University of Waikato defined a method for industrial production of fuel silicon using a magnesium intermediary rather that carbon, which is presently used for high-grade silicon production.
There are many other newfuel possibilities also that have been subsequently proposed. A summary can be found here.
Like any commodity, newfuel would require both a supplier and a market. New Zealand would not be the only country that would prefer to avoid nuclear power – Japan would be one of many others. A major research and development program would be needed, involving serious funding that would make Onslow expenditure seem insignificant. The development group would involve industrial chemists and combustion engineers, to first define the optimal fuel and then design and build a demonstration power station. There would also need to be movers and shakers who can make things happen. Taranaki would seem a logical home for such developments, given the present local skills base. The critical requirement for solid fuel development – silicon, aluminium or whatever – will be milling it down to a sufficiently fine powder so the oxidation process can continue to completion quickly. Burning coal does not does not have this problem because the burning process exposes new coal surface to maintain the oxidation, though at the expense of carbon dioxide production.
We shouldn’t be wary of breaking new ground on this. Just as Onslow may turn out to be the world’s largest pumped storage scheme by energy storage, there is no reason why the world’s first prototype new power station should not be built in Taranaki. Developing ability to create off-the-shelf power stations of the new type could be of particular value and it might be speculated that Taranaki could develop an export industry in the same way that Denmark now is a major supplier of wind turbines.
The technological developments involved are significant but not so daunting that they could not be achieved in New Zealand. It would be orders of magnitude simpler than the complexities of nuclear fusion, which might never happen for practical power generation and certainly not in time for climate change urgency.
Making all this happen requires significant funding partners who also stand to gain. There are major global funds looking for novel green investments. Also, the Middle East oil nations could be approached. They have available capital, they are looking for sustainable alternative exports as their oil and gas reserves decline, the waste heat from the newfuel production process could be coupled with desalination for freshwater supply, and an increase in global warming to any extent could make those nations almost unlivable at times.
The source of energy for newfuel creation at source is left open. In the first instance it might come from natural gas to get the market established, to be followed soon after by a mix of renewable and nuclear power.
Of course, all this is only speculation about a future scenario that may be unrealistic and never go past a preliminary scoping evaluation. However, in an uncertain age of climate change we should follow up all possible avenues of investigation. Regardless of how our electricity production evolves, if Onslow is constructed then it will play a future role in some form and will become part of the landscape, though perhaps reduced in size.