A multibillion-dollar proposal to build a massive storage lake above Roxburgh and Millers Flat for a pumped hydro storage scheme that could produce electricity in a dry year is to be revisited.

It comes from a Government push to have 100 per cent renewable electricity in New Zealand by 2035 and is recommended by the Independent Climate Change Committee, commissioned by the Government to report on accelerated electrification.

Its report, which also considers electrifying up to half of New Zealand's vehicle fleet by 2035 and increasing the amount of renewable energy used instead of coal or gas, recommends investigating the possibility of pumped hydro storage (PHS) as a way to reduce New Zealand's greenhouse gas emissions.

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The best known proposal in New Zealand for a PHS facility, and one that would meet the size of a dry-year need, was to build a new dam on Lake Onslow and a tunnel down to Lake Roxburgh.

The Onslow project was first mooted in 2005 by Earl Bardsley, of the University of Waikato's science and engineering faculty.

Associate Prof Bardsley said an expanded Lake Onslow for a PHS scheme would add about 50sqkm to the lake's 8sqkm surface and have storage capacity of about 5000 GWh - bigger than the maximum energy storage of New Zealand's hydro lakes combined.
Pumped systems operate as conventional hydro-power stations during periods of high electricity demand by releasing stored water from the upper reservoir (Lake Onslow, in this case) through turbines into the lower reservoir (Lake Roxburgh).

During periods of low demand, the upper reservoir is recharged by using lower-cost electricity from the grid to pump water back to the upper reservoir.

A spokesman for Energy and Resources Minister Megan Woods said the Government would announce by the end of the year who would investigate the potential for PHS in New Zealand.

The report said the cost of the Onslow project was "uncertain", but could be between $2.2billion and $4.2billion.

However, pumped schemes carried "large local environmental consequences" and had "substantial impacts on the landscape."

Projections for the spread of the expanded Lake Onslow. Graphic/ODT/John Culy Consulting.
Projections for the spread of the expanded Lake Onslow. Graphic/ODT/John Culy Consulting.

Prof Bardsley said if an Onslow scheme was used to buffer the transition to electrification then "it really would be a big deal nationally - changing our energy scene forever".

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He said transitioning to a low-emissions economy in New Zealand would require a "significant increase" in energy storage capacity.

"The only practical option is pumped storage, most probably at Onslow. Preliminary evaluations ... should start as soon as possible because of the long lead time between project consenting and completion for large civil engineering projects".

Prof Bardsley said Onslow pumped storage was "only an option which might not ever be taken up. If constructed, it would not be any time soon and not before full consultation and open discussion".

The ICCC report said any investigation into the Onslow proposal would "need to consider environmental, social and cultural implications" of pumped hydro options, not just technical and economic effects.

Pioneer Energy owns and operates a hydro scheme on the Teviot River, which drains from Lake Onslow, and Contact Energy owns and operates a hydro scheme at Lake Roxburgh.

Representatives from both companies said they were aware of the Onslow PHS proposal, but it was too early to comment before the new study was concluded.

• This story is part of the Otago Daily Times contribution to Covering Climate Now, an international campaign by more than 170 media organisations to draw attention to the issue of climate change ahead of a United Nations summit on September 23. To read more ODT coverage, go to odt.co.nz/climate