A promise kept: govt pulls the plug on Lake Onslow scheme – but this saving of $16bn is denounced as “reprehensible”?
After $21.8 million was spent on investigations, the plug has been pulled on the Lake Onslow pumped-hydro electricity scheme,
The scheme – that technically could have solved New Zealand’s looming energy shortage, according to its champions – was a key part of the defeated Labour government’s NZ Battery Project, a $100 million programme led by the Ministry of Business, Innovation and Employment.
As Newsroom reported last month, the scheme would have been New Zealand’s largest-ever hydro project generating up to 1000 megawatts of electricity and having 5TWh of energy storage.
In comparison the country’s largest existing concrete gravity hydro dam at Clyde generates 432MW.
In energy-storage terms Onslow would have more than twice Lake Pukaki’s 1.9TWh capacity.
But the scheme would have significantly enlarged Lake Onslow and would have cost $16 billion (assuming the unlikely prospect there were no cost overruns).
Scrapping it was listed on new prime minister Christopher Luxon’s 100-day action plan.
The announcement has been welcomed by the Taxpayers Union as the scrapping of a white elephant that would have cost more than $8000 for every household in the country.
But the scrapping was described as reprehensible by the fellow who conceived the scheme,
There is no record of the government’s decision on the government’s official website.
Actually, there is no record of anything.
But the press statement from Energy Minister Simeon Brown can be found on the Scoop website.
“This hugely wasteful project was pouring money down the drain at a time when we need to be reining in spending and focussing on rebuilding the economy and improving the lives of New Zealanders.
“Scrapping this project was identified as a priority of the Government’s 100-day plan and we are delivering.
“After I instructed officials of my expectations, on Friday the Ministry of Business, Innovation and Employment confirmed all work on the scheme has ceased and decommissioning is set to begin.”
On top of its $16 billion price tag, the Lake Onslow scheme would run into likely issues with consenting and it wouldn’t be delivered for at least another decade, Brown said.
Moreover, he said industry experts warned that if the scheme went ahead it would have a chilling effect on the pipeline of renewable electricity generation New Zealand needs to reach our climate goals.
Brown said security of the country’s electricity supply is critically important and the Government is committed to cutting red tape to drive investment in renewable electricity generation.
“Demand is forecast to increase by two-thirds by 2050 and we need to build enough generating capacity to meet that demand. To do this, we’re going to need to significantly increase the amount of clean energy we generate from solar, wind and geothermal.
“Our decision to cancel Lake Onslow, and our commitment to make it easier to consent wind, solar and geothermal energy projects, will give industry certainty in the direction the Government is heading and greater confidence to invest in more energy production in New Zealand.”
Taxpayers’ Union Campaigns Manager Connor Molloy said the project
“… was always a white elephant that would never pass the sniff test of fiscal responsibility, costing more than $8000 for every household in the country.
The project would not have reduced New Zealand’s net emissions because the electricity sector is already governed by the Emissions Trading Scheme, Molloy said.
“If the goal is to make electricity more affordable there are far more efficient ways to do this than unnecessarily piling billions of dollars of debt onto taxpayers.
“Reducing regulatory barriers to building renewable energy and allowing foreign investment in renewable projects would bring the costs of electricity down, while providing a universal carbon dividend with ETS revenue would help shield consumers from unaffordable price rises.
“The new Government must not fall into the trap of substituting one white elephant project for another. The plans to subsidise electric charging stations are nothing more than expensive corporate and middle class welfare. The private sector is more than capable of delivering charging infrastructure, the government just needs to get out of the way and allow it to happen.”
The scheme was the brainchild of Earl Bardsley, a research associate in the School of Science at the University of Waikato, who said the project would have supported the renewable energy sector by storing power and stabilising prices for 100 years.
He said it was reprehensible for the Government to stop a detailed business case into the idea.
“Unfortunately, it just simply reflects that National don’t have many people in their team with an understanding of basic science.”
He said the argument that New Zealand should generate more renewable energy instead of storing it made no sense.
“The critical thing is the more you go into renewables, which is good we do need to go into renewables, the more need you have for something like Onslow. The wind and sun are going to be intermittent and Onslow will provide buffering.
“The only way that they can make up for dry years without something like Onlow is to have coal fired power stations and gas burning in Huntly.”
He called for a cross-party energy strategy.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
In comparison the country’s largest existing concrete gravity hydro dam at Clyde generates 432MW.
In energy-storage terms Onslow would have more than twice Lake Pukaki’s 1.9TWh capacity.
But the scheme would have significantly enlarged Lake Onslow and would have cost $16 billion (assuming the unlikely prospect there were no cost overruns).
Scrapping it was listed on new prime minister Christopher Luxon’s 100-day action plan.
The announcement has been welcomed by the Taxpayers Union as the scrapping of a white elephant that would have cost more than $8000 for every household in the country.
But the scrapping was described as reprehensible by the fellow who conceived the scheme,
There is no record of the government’s decision on the government’s official website.
Actually, there is no record of anything.
But the press statement from Energy Minister Simeon Brown can be found on the Scoop website.
“This hugely wasteful project was pouring money down the drain at a time when we need to be reining in spending and focussing on rebuilding the economy and improving the lives of New Zealanders.
“Scrapping this project was identified as a priority of the Government’s 100-day plan and we are delivering.
“After I instructed officials of my expectations, on Friday the Ministry of Business, Innovation and Employment confirmed all work on the scheme has ceased and decommissioning is set to begin.”
On top of its $16 billion price tag, the Lake Onslow scheme would run into likely issues with consenting and it wouldn’t be delivered for at least another decade, Brown said.
Moreover, he said industry experts warned that if the scheme went ahead it would have a chilling effect on the pipeline of renewable electricity generation New Zealand needs to reach our climate goals.
Brown said security of the country’s electricity supply is critically important and the Government is committed to cutting red tape to drive investment in renewable electricity generation.
“Demand is forecast to increase by two-thirds by 2050 and we need to build enough generating capacity to meet that demand. To do this, we’re going to need to significantly increase the amount of clean energy we generate from solar, wind and geothermal.
“Our decision to cancel Lake Onslow, and our commitment to make it easier to consent wind, solar and geothermal energy projects, will give industry certainty in the direction the Government is heading and greater confidence to invest in more energy production in New Zealand.”
Taxpayers’ Union Campaigns Manager Connor Molloy said the project
“… was always a white elephant that would never pass the sniff test of fiscal responsibility, costing more than $8000 for every household in the country.
The project would not have reduced New Zealand’s net emissions because the electricity sector is already governed by the Emissions Trading Scheme, Molloy said.
“If the goal is to make electricity more affordable there are far more efficient ways to do this than unnecessarily piling billions of dollars of debt onto taxpayers.
“Reducing regulatory barriers to building renewable energy and allowing foreign investment in renewable projects would bring the costs of electricity down, while providing a universal carbon dividend with ETS revenue would help shield consumers from unaffordable price rises.
“The new Government must not fall into the trap of substituting one white elephant project for another. The plans to subsidise electric charging stations are nothing more than expensive corporate and middle class welfare. The private sector is more than capable of delivering charging infrastructure, the government just needs to get out of the way and allow it to happen.”
The scheme was the brainchild of Earl Bardsley, a research associate in the School of Science at the University of Waikato, who said the project would have supported the renewable energy sector by storing power and stabilising prices for 100 years.
He said it was reprehensible for the Government to stop a detailed business case into the idea.
“Unfortunately, it just simply reflects that National don’t have many people in their team with an understanding of basic science.”
He said the argument that New Zealand should generate more renewable energy instead of storing it made no sense.
“The critical thing is the more you go into renewables, which is good we do need to go into renewables, the more need you have for something like Onslow. The wind and sun are going to be intermittent and Onslow will provide buffering.
“The only way that they can make up for dry years without something like Onlow is to have coal fired power stations and gas burning in Huntly.”
He called for a cross-party energy strategy.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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