Sunday, March 26, 2023

Stuart Smith: A Minister Committed to Her Silver Bullet

A silver bullet solution is hard to resist: it is easy to promote and potentially the stuff that legacies are made of. Last week we saw Energy and Resources Minister Megan Woods succumb to this, when she doubled down on the Lake Onslow Pumped Hydro Scheme, despite the expected build cost quadrupling.

The potential for pumped hydro at Lake Onslow in the event of a dry year was first identified by Waikato University Professor Earl Bardsley, in 2002. An electricity dry year usually lasts around four months and comes to a head in the colder months when most of the precipitation is locked up as snow and ice and not available to replenish our hydro lakes. Therefore, Lake Onslow was initially seen as a potential solution.

The proposal is to pump water from Lake Roxburgh up through a 23 km tunnel to Lake Onslow, and when needed return the water back down through the tunnel, generating electricity.

Pumped hydro, however, is not a perpetual source of energy as it uses more than it generates due to pumping losses.

Nevertheless, in 2020, Minister Woods embraced the $4 billion proposal as the ultimate solution to address the challenge of dry years and promote decarbonization in the electricity industry. As a result, she established the NZ Battery Project to examine the project’s feasibility and provide a report to the government by 2022.

At the time many critics raised concerns about the cost and the fact that Onslow is in Otago, far from where most of the electricity demand is. Additionally, cost overruns and delays incurred during the construction of the nearby Clyde Dam, largely due to the local geology, were also cited and, based on these factors, delays and cost overruns are deemed inevitable.

Last week The NZ Battery Project reported a shocking updated cost estimate of $15.7 billion – nearly four times the earlier estimate. But, rather than walking away from the project in the midst of a cost-of-living crisis, the minister is trumpeting it with more enthusiasm than before. She committed to a business case being delivered within two years, and the project will take up to nine years to build, which takes it out to 2035 at the earliest.

Large projects are always challenging, usually more so when the government is involved. For example, the Central Rail Link in Auckland announced last week that costs have blown out by over $1 billion and have asked the government and Auckland Council for more money.

We should take a close look at the Snowy 2 Pumped Hydro Scheme, which is still under construction in Australia, and learn from their experience. I say ‘still’ under construction because it was expected to be completed in 2021 but is now expected to be finished in 2027, at the earliest, and at a cost of AU$10 billion: a staggering five-fold increase. Which is widely expected to be an underestimate.

There is no question that pumped hydro can play an important role in our electricity sector, but it must be the right project in the right place. Our electricity companies are best placed to make those assessments and to manage the risks, not the minister.

Let go of your silver bullet minister, before you shoot us in the foot.

Stuart Smith is a N Z National Party politician who has been a member of the House of Representatives for the Kaikōura electorate since 2014. This article was first published HERE


DeeM said...

I've finally figured it out.
If you're a Minister in the Labour Government....AND your last name is Woods...and your first name begins with M, then you're irrevocably predisposed to backing ridiculously expensive, ultimately ineffective, and massively hypocritical projects that will do ZERO for reaching Net Zero.

The amount of CO2 generated in the construction of both Woods' policies would likely outweigh the amount saved and would do ZERO to reduce global emissions.

We should send the Hansel & Gretel of our socialist front bench Into The Woods, to get well and truly lost.

Terry Morrissey said...

The minister is a bloody air head. Most people would realise that to use all that energy to produce less energy is nuts. She obviously was taught maths by Tinetti who couldn't grasp the system in 27 years.
I thought thah the labour cult could not regress any further, but they are proving me wrong.

Robert Arthur said...

In the early days of the Industrial Revolution, before rotative steam engines had been invented, steam pumps were used to push water back uphill for the waterwheels which drove first factories. Thermal efficency 1 to 3%!!. The beginning of the CO2 rise. (Although if useful output is measured cars in modern city traffic probably little better.)