Lake Onslow pumped storage
Comment by Earl Bardsley, University of Waikato (formerly Associate Professor in hydrology and Meridian Energy Senior Research Fellow in Applied Hydrology).
February 2026
The Lake Onslow reservoir on February 21, 2023. Energy storage would be achieved by raising the lake about 80 metres above its current level. The expanded lake would become the upper reservoir of a pumped storage system with a 16 km tunnel linkage to the Clutha River (lower reservoir). The enlarged lake would have a minimum surface area of about 30 square kilometres (maximum drawdown), compared to the 8 square kilometres of the present lake. The 5 TWh of the expanded lake’s energy storage capacity would create the world’s largest pumped storage scheme by energy storage measure.
The Lake Onslow pumped storage scheme had been previously rejected by the current government. However, a private consortium is now looking to construct the scheme as a commercial project (independent of government support) for an estimated cost of about $8.5 billion. The consortium has a fast-track application currently under consideration. Whether the application enables a start down the fast-track path should be known in the first quarter of 2026.
The New Zealand government is presently (February 2026) looking to import LNG as a fast response to the dry year risk when hydro power output declines because of a period of reduced river inflows into the hydro lakes. The current potential for dry year impact on the economy is exacerbated by declining availability of existing gas supply. The impact was most recently seen in the high wholesale power prices in the 2024 dry winter.
If LNG importing goes ahead, the Lake Onslow scheme gives it a natural termination at some time in the future when Onslow becomes operational. This is because expensive LNG-generated electricity (>$200 / MWh) could never compete in the electricity market against Onslow. This applies to both peaking and support against dry years. Similarly, it is unlikely that the Huntly power station (fossil fuel power) could survive competition from the Lake Onslow scheme operating commercially.
Selected references and conference presentations
Bardsley, W.E. (2025). The hydrology of the lake Onslow pumped storage scheme. New Zealand Hydrological Society Annual Conference, Hamilton.
Karaminik, Y. (2024). Environmental offsets and water resource opportunities with Lake Onslow pumped storage (MSc).
Bardsley, W.E., Karaminik, Y., Majeed, M. (2022). Estimating Teviot River compensation flow to offset evaporation loss from Lake Onslow pumped storage. Journal of Hydrology (NZ), 61, p.179-182.
Kamarinik, Y., Bardsley, W. E. (2020). Onslow pumped hydro: environmental offsets and spinoffs. New Zealand Hydrological Society Annual Conference, Invercargill.
Majeed, M. (2019). Evaluating the potential for a multi-use seasonal pumped storage scheme in New Zealand’s South Island (PhD).
Bardsley, W.E., Majeed, M. (2015). A multi-functional large pumped storage scheme for New Zealand in support of renewable energy development? International Congress on Modelling and Simulation (MODSIM2015). Gold Coast.
Majeed, M., Bardsley, W. E. (2015). Assessment of economic and environmental advantages of a seasonal pumped storage scheme (Onslow, Central Otago). New Zealand Hydrological Society Annual Conference, Hamilton.
Majeed, M., Bardsley, W. E. (2014). Simulation models to evaluate economic feasibility of a possible seasonal pumped storage scheme at Onslow, Central Otago. Electricity Engineers Association Conference Wellington.
Majeed, K. M., Bardsley, W. E. (2012). Prospects for pumped storage in Central Otago. New Zealand Hydrological Society Annual Conference, Nelson.
Bardsley, W. E. (2006). A pumped storage scheme for maintaining hydro electricity against climatic variations? (Invited paper) 8th Annual New Zealand Energy Summit, Wellington.
Bardsley, W. E. (2006). China and New Zealand: Large seasonal pumped storage schemes for an electricity future using wind power and small hydro systems? International East Asia Regional Workshop of the International Academy Panel (IAP) on Water Security with Climate Change and Human Activity, Beijing.
Bardsley, W. E., Leyland, B., Bear, S. F. (2006). A large pumped storage scheme for seasonal reliability of national power supply? Electricity Engineers Association Conference, Auckland.
Bardsley, W. E. (2006). The Onslow seasonal pumped storage scheme revisited: An alternative approach to water level management of the southern hydro lakes? New Zealand Hydrological Society Annual Conference, Christchurch.
Bardsley, W. E. (2005). Note on the pumped storage potential of the Onslow-Manorburn depression, New Zealand. Journal of Hydrology (NZ), 44, p.131-135.
Bear, S. (2005). Hydrological evaluation of pumped storage in the Onslow-Manorburn basin (MSc).
Bear, S. F., Bardsley, W. E. (2004). A large New Zealand pumped storage scheme for reliable power through dry years? New Zealand Hydrological Society Annual Conference, Queenstown.
Bear, S. F., Bardsley, W. E. (2003). A pumped storage/thermal station hybrid for maintaining New Zealand electricity supply through dry years. New Zealand Hydrological Society Annual Conference, Taupo.
Reports produced from the MBIE NZ Battery investigations are currently listed under their heading “Lake Onslow pumped hydro”.
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