NZ Battery Project
Cabinet has approved funding to investigate pumped hydro against other possible energy storage solutions to New Zealand’s dry year electricity problem.
Finding a solution to our dry year problem
The ‘dry year problem’ is that New Zealand’s existing hydro-power catchments sometimes don’t receive enough rainfall or snowmelt and the level of the storage lakes run low. When this occurs some form of back-up is needed, and this is currently provided by fossil fuel generation.
The NZ Battery project will provide comprehensive advice on the technical, environmental and commercial feasibility of pumped hydro and other potential energy storage projects.
The name NZ Battery refers to the manner in which the intended solution will provide stored energy for the New Zealand electricity system in an analogous manner to a battery.
The first phase will evaluate the viability of pumped hydro schemes of various sizes at Lake Onslow, as well as at other possible locations, and will consider these solutions against alternative methods to resolve New Zealand’s dry year electricity storage problem to achieve 100% renewable electricity and help to decarbonise the wider energy system.
In its ‘Accelerated Electrification’ report, the Interim Climate Change Committee (ICCC) recommended further investigating a pumped hydro scheme at Lake Onslow. Alongside this option the NZ Battery Project will also explore other pumped hydro storage proposals and other alternative technology approaches as comparators. Following rigorous assessment of all options, a feasibility study will be developed for the preferred option or options.
Read the electricity report:
Phase 1 of the NZ Battery Project will likely include:
- Initial assessment of the Lake Onslow option and other potential projects
- Feasibility-level project development and design
- Developing plans for consenting and assessing implications on the electricity network
- Investigating environmental impacts and options for project to generate net ecological gains
- Analysing commercial feasibility and designing procurement methodology
- Early engagement with Iwi
- Securing land access for geotechnical investigation and potential project use
The feasibility studies will inform a decision on whether to proceed to a next phase, which would be a detailed final engineering design and preliminary works to provide firmer knowledge of costs and capabilities to inform a Cabinet decision whether to proceed to construction on the chosen solution.
The final phase of the project will, if approved, be the construction of the selected option.
Updated 25 March 2021
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MBIE recently sought nominations for a Technical Reference Group to bring additional and specialist expertise to the NZ Battery Project. Due to the high number of nominations, the Group members are expected to be announced in March.
Pumped hydro storage
The Lake Onslow option and other smaller scale pumped hydro options will provide comparisons for other technologies during Phase 1 of this project.
Pumped hydro schemes are used internationally as a way of storing and using water independently of natural inflows. They are able to be specifically designed to meet daily demand peaks, and/or store a large amount of energy for a long period to meet dry year energy storage requirements. As such, they are an alternative to the flexibility provided by fossil fuel generation.
Pumped hydro can generate to provide additional energy from stored water in the upper reservoir when there is high electricity demand and/or low levels of renewable generation. Conversely, when there is low electricity demand and/or high levels of renewable generation, water can be pumped up hill for storage and later use.
How pumped hydro storage works
Where is pumped hydro storage used?
Pumped hydro storage is used throughout the world as a stored energy option for hydroelectricity with large schemes in the US, China and Japan. Scotland has two pumped hydro storage hydroelectric power stations, which pump water back up to a storage reservoir during periods of off-peak demand. Australia is currently building a large pumped hydro storage project, Snowy 2.0.
Pumped hydro at Lake Onslow is one option that will be investigated:
Identifying and assessing other options
In addition to pumped hydro, the ICCC examined 4 other options for renewable dry year security in its 2019 study ‘Accelerated Electrification’.
The other options are:
- 'overbuilding' renewables
- indicative large scale demand interruption
The ICCC considered the marginal emissions abatement costs of the options relative to continuing to use natural gas-powered generation as in the diagram below.
The NZ Battery Project will look at these and other potential options in detail as comparators against pumped hydro. Other options may also be assessed as they arise through the course of the investigations.
Indicative project timeline
|Scope||Estimated cost||Estimated timeframe||Decision required|
|Phase 1: Investigation and evaluation of pumped hydro and other dry year storage solutions, and early field work including potential geotechnical and environmental investigations. Feasibility study to inform a decision on whether to proceed to the next Phase.||Up to $30 million||2021 – April/May 2022||Agreement to proceed to Phase 2|
|Phase 2 dependent on findings of feasibility study|
|Phase 2: Engineering design and further field work to understand any environmental, geotechnical and seismic aspects of dry year solution option or options agreed at the end of Phase 1.||Up to $70 million||May 2022 – late 2023/early 2024*||Decision whether to proceed to construction and agreement for funding mechanism|
|Phase 3 dependent on design work and securing of funding mechanism|
|Phase 3: Construction||Unknown until dry year solution or solutions selected||Early 2024 onwards*|
*Depending on the chosen option or options
Updates will be provided on this page as they become available.
If you have any questions please email the project team at: firstname.lastname@example.org