Onslow pumped storage

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

If constructed, the Onslow pumped storage scheme in Otago (New Zealand) would be the world’s largest in terms of energy storage capacity. This large capacity (5 TWh) would enable New Zealand’s green transition by avoiding the present need for fossil fuels (coal and gas) for power generation through dry years.
The current situation is that Cabinet now has the Phase 1 final reports on dry year options (including Onslow pumped storage) . An announcement will be made quite soon as to which option or options will carry through to the Phase 2 investigations that will begin early in 2023.
Whether or not Onslow progresses will be determined by national priorities. However, the regional social and environmental impacts need to be counterbalanced as far as possible in terms of local water resource opportunities and ecological offsets. A water resource overview can be downloaded here. There is regional detail involved and it is likely to be of interest mostly to those in Otago.

There is mention of Onslow in the wider context of increasing future electricity demand in the podcast discussion here. A useful overview of the geographical distribution and sizes of pumped storage schemes around the world can be found here.

If it proceeds, the Onslow pumped storage scheme will be the largest hydro engineering project in New Zealand’s history, being equivalent to a combination of the Benmore Dam and the Manapouri Power Scheme. Onslow and other dry year options are being considered by the NZ Battery team.

The scheme would represent 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 and sole researcher on Onslow pumped storage from 2005. In this regard, I would like to acknowledge the work of my University of Waikato 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).

Unfortunately, however, some misconceptions about Onslow do keep being repeated:

* It would create a net energy loss to the nation.
* Hydro spill will not be reduced.
* Onslow pumped storage can only be justified if hydro spill is reduced.
* Onslow pumped storage will deter investment in new renewables.
* A large lower reservoir will be needed.
* There will be significant loss of the pumped water through evaporation and leakage.
* The pumped storage scheme should be in the North Island.
* Onslow pumped storage will cause increased transmission loss.
* Onslow pumped storage will be detrimental to the power companies.
* If it was economic, it would have been built already by private enterprise.
* It’s too expensive.
* It will cause higher home electricity bills.
* There will be no local environmental gain to offset the Onslow wetland loss.
* Mudflats will be exposed at maximum Lake Onslow drawdown.
* Lake Onslow pumped storage is old technology and it could become a white elephant.
* We should build more hydro dams / wind farms / solar power  instead.

* Onslow is an expensive means to get the last few percent to 100% renewable electricity.

Responses to the above can be downloaded here.

General video overviews can be found here, here, and here.

Onslow in the news
Selected items, both positive and negative, are listed below in time order. There is inevitably a degree of overlap. Some comments are added in places. Most news items date from the July 2020 election announcement of investigation of dry year alternatives, with emphasis on Lake Onslow pumped storage. There will be further news items if the coming government announcements in January indicate that Onslow is selected as one of the dry year options for detailed evaluation.

January 2009
Govt eyes price of power as water spilt

August 2018
ANU pumped hydro researchers take out Eureka Prize
This is not about Onslow but there are similarities in that Australian pumped storage sites were identified that would enable 100% renewable electricity there. In New Zealand, the University of Waikato has played a similar role to ANU, but with focus just on the Onslow scheme.

September 2019
Storing energy for a transitioning grid

July 2020
Govt looks to boost clean energy supply, commissions $30m investigation
Includes two 1News video clips about the New Zealand government July 2020 announcement of initiation of investigations into Lake Onslow pumped storage.

Pumped hydro may result in ‘biggest infrastructure project since the 1980s’

Industry figures say Lake Onslow hydro project not worth it

Lake Onslow hydro plan expensive and unnecessary
The Centre for Sustainability at the University of Otago advocates modification of electricity demand rather than increased storage capacity at Onslow. However, it isn’t clear that demand could be sufficiently reduced to take New Zealand through a dry year without significant economic impact.

A prudent approach to New Zealand’s renewable energy goals
Raises the possibility of a Taranaki gas alternative to Onslow.

Solving the critical flaw in our power grid

Time for new nation-building hydro project

August 2020
$4 billion Lake Onslow pumped hydro scheme could ‘tip electricity market on head’
This is something of an over-reaction to the size of Onslow impacting the electricity market. Onslow is only “large” with respect to energy storage capacity. The generating capacity at Onslow will be about 1000 MW, which is just a little larger than the MW capacity of the Huntly power station. Nobody has suggested that Huntly is a huge energy gorilla with capability of tipping the electricity market on its head.

Lake Onslow project: area has seesawing history

Otago pumped hydro a fanciful, rainbow project

Lake Onslow: bold vision or engineer’s pipe dream?

September 2020
Election 2020: Labour pledges 100 per cent renewable power by 2030

Labour pledges extra $70m for Lake Onslow dam project

Labour’s 2030 ‘100 per cent renewables’ goal is realistic if Lake Onslow scheme stacks up

Will pumped hydro result in significant energy price hikes for NZ?

Ardern talks environment and economy on campaign trail in Taupō
Recognition of trade-offs between advantage and disadvantages of the Onslow scheme.

October 2020
The Detail: Is renewable energy the best way for NZ tackle climate change?
The 100% renewable energy mentioned here is actually 100% renewable electricity.

As a minister plumps for hydro, uncertainties loom

November 2020
Contact says Lake Onslow scheme would ‘paralyse’ investment in renewables
The potential ‘paralysis’ of renewable investment is often repeated. However, it is not clear why construction of what amounts to a large battery should deter new investment in renewable electricity in any way. Since November 2020 there have been many announcements of new solar, wind, and geothermal projects.

March 2021
Pumped hydro to take a year longer

June 2021
Power industry ‘openly resistant’ to Lake Onslow, minister suggests

Lake Onslow energy storage proposal ‘fatally flawed’

Lake Taupo possible ‘battery’ for power production
Energy storage possibilities in the Central North Island

Our hydro dams are bubbling up climate-warming methane

July 2021
Understanding Lake Onslow

September 2021
Coal generation rises to highest share in 13 years
Energy Minister Megan Woods points out the potential value of Onslow pumped storage to offset coal use for power generation.

October 2021
Govt awards $11.5m contract to investigate feasibility of Lake Onslow power scheme

December 2021
Project Onslow is the key to unlocking our renewable future

February 2022
Critics warn Lake Onslow power scheme’s $4b price tag may balloon
Includes discussion of some engineering aspects.

March 2022
Genesis imports US wood pellets to fuel Huntly renewable energy trial
Biofuel burning at Huntly is suggested as an Onslow alternative. However, that this would maintain high electricity prices into the future.

The giant puddle that could power NZ
A local view of the Onslow scheme and its environmental setting. Some great pics as well.

Farmers unhappy crucial land to be flooded under Government’s proposed Lake Onslow hydro storage scheme
Some less than optimal dealing with local farmers.

April 2022
Geotech investigations to get underway for pumped hydro at Lake Onslow
Initiation of Onslow geotechnical investigations announced by Megan Woods.

July 2022
So far, so good for multibillion-dollar Lake Onslow power scheme, Cabinet decides
Overview of the mid-year progress to date on dry year options.

August 2022
Pumped hydro plan ticks boxes
Further comment on mid-year progress to date.

September 2022
Lake Onslow climate conundrum
Concerns over environmental impact raised by Forest & Bird. A good summary on the ecological side. One correction is that the downstream Clutha River impact of Lake Onslow water will in fact be more positive than negative. This is because Onslow water will be released at times of low Clutha flow. The impact will be the other way around – didymo and other aquatic weeds will be introduced from the Clutha River into Lake Onslow and then to the Teviot River. If Onslow pumped storage goes ahead, it is important that constructed environmental offsets be considered as part of the scheme.

October 2022
Onslow scheme no ‘done deal’
Summary of the Onslow open day at Roxburgh on October 29. It is noted that the start of construction, if it happens, is still years away. The dirty water shown in the video is of a river flood and not indicative of Onslow water appearance if the lake is raised.

November 2022

NZ Battery Project has air of déjà vu
This article was written just after the Onslow open day at Roxburgh on October 29. It was revealed for the first time that the underground power station could be 80 metres below the level of the Clutha River. This may be to enable the system to operate without having to construct an expensive new dam on the Clutha.

Lake Onslow not ideal for battery lake, cost ‘vastly understated’ – Contact Energy
This claim by Contact Energy is on the basis of a report by the Boston Consulting Group (BCG). The report was commissioned by Contact Energy, Genesis Energy, Mercury, and Meridian Energy. However, even in this context, the essential conclusion of the report concerning Onslow was not to have a conclusion:
The Government’s $80 million investigation into Lake Onslow will provide improved information on the project, including greater details on the cost, timeline to build, generation capacity, lake storage, how Lake Onslow will operate in the market, and other aspects like consenting. Until these details emerge it is too early to develop a strong view on its viability. (BCG p.12).
It is a pity that the gentailers did not take a similar view about Onslow and adopt a neutral stance until the Phase 1 reports come out from the NZ Battery investigation (due now in January). With respect to Contact Energy, it would have been commercially helpful for them to advocate for Onslow construction, coupled with a tunnel link to Lake Roxburgh. Income from their Roxburgh power station would then be increased because at times of low electricity prices, some water from Lake Roxburgh would be diverted by pumping to Lake Onslow. Later, at times of high prices, the water would be returned back to lake Roxburgh to produce more income from power generated at the Roxburgh station.

December 2022

Ministers push back next call on Lake Onslow power scheme until the new year
Notification that the dry year Phase 1 results and Phase 2 proposals will not now be in December as previously indicated, but should appear in January 2023.


What about North Island peaking ability?

This is not about Onslow as such, but if Onslow (or some other system) results in 100% renewable electricity, the North Island fossil gas peaker stations would no longer be operative. Ability to bring in additional electricity quickly for a short time aids robustness of the grid, particularly in the case of a brief outage in south-north transfer. One approach is to have large batteries set up. However, batteries have a finite lifetime and are presently expensive – Contact Energy have recently cancelled their planned 100 MW battery because of rising material costs. An alternative approach is to construct some small pumped storage schemes in the North Island where the terrain allows. Such schemes are more expensive than batteries and will take time to construct. However, they have the advantage of being sustainable once operational and have low operating costs. See, for example, this newsletter item.