NZ Battery Project moves to next phase

Published: 16 March 2023

The Government has announced it will progress to the next stage of the NZ Battery Project, looking in more detail at the viability of pumped hydro as well as an alternative, multi-technology approach.

The NZ Battery Project was established in late 2020 to find innovative solutions to the ‘dry year problem’, when hydro-electricity lakes run low, leading to the burning of more fossil fuels to cover the electricity shortfall.

Pumped hydro is a method of storing energy in a reservoir, which is then released into a lower reservoir when more power is needed. A dry year solution would assist New Zealand’s renewable transition and climate change response.

The Government has also agreed to continue looking at alternatives to the scheme including a combination of comparator technologies and scoping a possible smaller pumped hydro scheme in the central North Island, subject to agreement with iwi.

Biomass, flexible geothermal energy, and hydrogen have been identified as the possible alternatives to pumped hydro, as they have the most potential collectively to store enough energy to help solve the dry year problem.

Phase 1 investigations show a pumped hydro scheme at Lake Onslow would take approximately 7 to 9 years to build, with an estimated building cost of $15.7 billion.

In comparison, initial estimates for the capital element of the portfolio option are about $13.5 billion, but with significantly higher ongoing operating costs.

There is still work to be done to more closely examine the feasibility of these options, and to fully understand the environmental, cultural, social and commercial impacts, as well as the engineering requirements.

The Project team will continue to work with our key stakeholders including mana whenua, and landowners, as well the technology experts, in the near future.

A detailed business case is expected to be developed by the end of 2024, followed by a final investment decision, which is expected to take a further 2 years.

Read more about the NZ Battery Project

Read the Minister’s press release(external link) —

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