This involved looking at the viability of a pumped hydro scheme in Otago, exploring the use of other technologies and scoping a possible smaller pumped hydro scheme in the central North Island, subject to agreement with iwi.
“Pumped hydro is an ingenious way of storing energy in a big reservoir, which is released into a lower reservoir when more power is needed, like a giant battery,” Woods said.
She said biomass, flexible geothermal energy and hydrogen had been identified as possible alternatives to pumped hydro, as they have the most potential collectively to store enough energy to help solve the problem of dry years limiting hydro-electricity supply.
The NZ Battery Project was established in late 2020 to find innovative solutions to the problem, which leads to more fossil fuels being burned to cover the electricity shortfall, increasing power bills.
A detailed business case is expected to be developed by the end of next year. A final investment decision would take a further two years to make.
Fielding questions from the Opposition in the Transport and Infrastructure Committee about the cost the scheme, Woods said MPs should consider the financial and environmental costs of not responding to the dry year problem.
For example, she estimated generating 12.5 per cent of our electricity from coal in the year 2030 would total $900m in fuel costs and $700m in emissions pricing.
National said it would scrap work on pumped hydro if elected to government.
“We should be proud of our existing renewable generation percentage, and we can and should be doing more to make it easier to get renewables built,” National’s energy and resources spokesperson Stuart Smith said.
“Lake Onslow is a return to the bad old days of expensive government investment in a well-functioning electricity market.”
Energy Resources Aotearoa chief executive John Carnegie said, “The idea of a government-owned, taxpayer-funded behemoth dominating the market is bad for business and households.
“Proceeding with the next phase of the NZ Battery project creates at least another year of uncertainty, and possibly over a decade if Lake Onslow proceeds. Uncertainty means less energy and higher prices.
“The market is on track to deliver 98 per cent renewable electricity by 2030. Rather than putting its eggs in one basket, we urge the Government to back the sector in delivering a portfolio of solutions by restoring investment confidence and cutting red tape up and down the energy sector.”
BusinessNZ Energy Council executive director Tina Schirr said, “The dry year problem and demand peaks are serious issues for the sector that need to be addressed. But Onslow carries a huge price tag for a solution that isn’t modular and won’t deliver in the next few years.
“Clean energy storage solutions will be an important part of our energy system today and in the future. Unfortunately, the pumped hydro solution at Onslow will come too late to address the immediate issues facing the energy sector.”
