Lake Onslow option

Pumped hydro storage at Lake Onslow is one option being explored.

Facts and figures 

The Lake Onslow option referenced by the Interim Climate Change Committee could be anticipated to provide at least 5TWh of annual generation/storage. It is estimated to have a construction timeframe of 4-5 years, with commissioning and filling taking a further 2 years. At its construction peak, it is expected to create 3,500-4,500 skilled and semi-skilled jobs.

Services pumped hydro can provide

  • Dry year storage — storing energy that can be converted to electricity during a dry year event. The NZ Battery Project was established to investigate the ability of pumped hydro to address New Zealand’s dry year problem. 
  • Intermittency back up — hydro lakes can increase or decrease their output to offset the variation in wind or solar generation, but this capacity is limited. Pumped hydro could provide a form of back-up to ensure electricity supply and demand is met when generation from solar, wind and existing hydro are not enough.
  • Fast response reserve — pumped hydro can potentially provide immediate power when there is a sudden energy shortfall in the electricity market.  

Early estimated costs 

Early estimates of costs were carried out by the Interim Climate Change Commission. It indicated a pumped hydro scheme like that at Lake Onslow could cost about $4 billion. Our feasibility study intends to provide greater certainty about the estimated costs.

Funding and financing 

Funding and financing models along with any potential subsequent levies, will be determined in subsequent phases of the project. The use of a levy would need to be justified via a demonstration of significant public good in a feasibility study, including through overall lower prices for consumers in the long term.

Location

The Lake Onslow option is located north-east of the Mata-Au/Clutha River in Central Otago.

The diagram shows what a 5TWh proposed lake would look like at the 760-metre contour. This is not the only possible option for Lake Onslow.

The NZ Battery Project is considering pumped hydro projects at a range of different locations, in addition to alternative technologies.

Map of the 5 TWh/760 metre countour option at Lake Onslow.

Feasibility study

The Lake Onslow feasibility study takes into account the technical, environmental, social, cultural and commercial considerations of a pumped hydro scheme.

A key part of this feasibility study is the engineering, environmental planning and geotechnical investigations. These are being overseen by Te Rōpū Matatau. Te Rōpū Matatau also considers consenting options and what further work may be needed to assess the environmental effects.

Te Rōpū Matatau is a consortium of firms led by engineering consultancy Mott MacDonald New Zealand, with engineering consultancy GHD and environmental planning and design consultancy Boffa Miskell.

More information about the scope of its work is outlined in the Energy and Resources Minister’s October 2021 press release about awarding the contract.

Major contract awarded to power NZ Battery investigation(external link)  — beehive.govt.nz

In June 2022, Cabinet Ministers confirmed the first phase of the geotechnical and engineering field work found a pumped hydro scheme at Lake Onslow appeared to be technically feasible. Cabinet Ministers also agreed that more work in the second half of 2022 was needed to analyse potential construction, engineering, cost, timing and consenting, as well as integration with the transmission system.  

In early 2023, Cabinet Ministers are expected to consider findings of the Lake Onslow feasibility study and of the other possible dry year solutions being investigated. Cabinet is expected to make decisions about which option or options (if any) should be further investigated for Phase 2 of the project.   

Geotechnical investigation

Te Rōpū Matatau was granted resource consents and other permits in the first half of 2022 to undertake geotechnical, geological and hydrogeological investigations, to inform the Lake Onslow feasibility study. 

Work began at the first site in mid-April 2022 and continued at various times throughout the year across a number of sites near Lake Onslow, between the lake and Clutha River/Mata-Au, and at various locations in the Teviot Valley area. Work at the final site was completed in October 2022. There is only some remediation work remaining. 

These feasibility geotechnical investigations included drilling for core samples and groundwater monitoring, excavating or digging test pits to observe soil and rock material near the surface, collecting rock samples for testing, and non-intrusive geophysical surveys. 

This work helps build a broad picture of how the regional geology could best support a pumped hydro scheme and provides valuable information to help understand:

  • regional geology such as faults, shear zones and landslides
  • whether rock strength and other properties vary between locations
  • groundwater and surface water interactions
  • suitability for pumped hydro infrastructure at different locations.

Before applying for consents, independent experts were contracted to assess the potential effects of the geotechnical work on each site, including ecological, cultural and archaeological effects. Sites were then selected where the impact on these values and on the local community is considered low or can be avoided or mitigated. 

Permission from landowners was sought before lodging consents for fieldwork on private land.

Environmental values assessment

Ecologists and scientists have identified the flora and fauna in the lake area and are looking at ways to offset, compensate and mitigate the environmental effects if the scheme was to go ahead. Experts have assessed the landscape values and the importance to recreational fishers. 

We have also commissioned independent research to help understand the:

  • species in the lake and their habitats (NIWA, Cawthron Institute, University of Otago, Fish & Game)
  • water quality (NIWA)
  • species and their habitats around the lake (Department of Conservation, Wildlands)
  • local lizard populations (independent herpetologists).  

This research will feed into the feasibility study of the Lake Onslow option that is expected to be considered by Cabinet Ministers at the end of phase 1.   

Social values assessment

During Phase 1, we commissioned research into the likely impacts the proposed scheme would have on the community.

This assessment draws on statistics, council records and historic documents. It’s also informed by interviews with affected landowners, a community forum, meetings with farmers, council and community board representatives and a local business group.   

On 29 October 2022, we held a Community Open Day in Roxburgh to provide an update on our work to date, focusing on the Lake Onslow feasibility study. It was also a chance for the community to share their viewpoints, ask questions and talk directly with the team.     

Cultural values assessment

Parts of the project area are culturally significant. It’s important the feasibility study captures the effects a pumped hydro scheme would have on cultural values.

There is a long history of human activity in the area, and there is potential for unrecorded archaeology to be present. There are also historic goldmining sites of interest.

Following conversations with mana whenua, we commissioned an assessment of cultural values related to project areas. This included reviewing archaeological records. If the Lake Onslow option proceeds to Phase 2, new archaeological surveying would be needed.

Last updated: 01 December 2022