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The time is right to see if New Zealand can get more out of its hydro electricity generation resources but the price and practicalities must stack up if the project is to be converted into promises.

The Government is funding a $30million study to see how it can minimise the impact of seasons when hydro-power catchments do not get enough rainfall and water storage runs low.

The New Zealand Battery project will provide advice on possible dry-year solutions, and starts with a focus on introducing pumped water storage at Lake Onslow.

It is a study but it is not all pie-in-the-sky: the Interim Climate Change Committee last year said a pumped storage solution showed "promise" and should be further investigated.

It is a welcome move and the latest chapter in the on-again, off-again story of the country’s halting moves from "dirty" energy to the abundant potential of water-powered renewables.

The project cannot happen soon enough. Petrochemical exploitation is on the way out and in Taranaki, a sizeable chunk of the regional economy is pivoting to meet a future not built on oil and gas.

Coal has all-but had its day as a significant source of energy in New Zealand. Most West Coast coal is sent overseas and Huntly coal only generates electricity when it is absolutely needed.

That coal has been needed several times in the recent past, especially when the nation’s hydro electric schemes had insufficient water to generate the power needed to meet demand.

The combination of dry autumns, little winter snowfall and no great melt in spring conspire to impact schemes that rely on generous flows to their storage lakes.

These schemes work extraordinarily well most of the time.

In a good year, they provide sufficient energy to help meet ever-growing demand, supported by additional geothermal, natural gas, wind and coal. They may even spill excess water.

However, it has been clear for many years that the climate is changing to such an extent that the schemes either cannot afford to waste their spill, or need supplementary storage as insurance.

It has also been clear that this would not be possible without spending many millions — perhaps billions — of dollars, something even the bravest generators would struggle to afford.

Even with capital and a plan, there would also be the not-insignificant need to explain and justify the environmental impact of extending the storage footprint of "green generation".

The need for expansion might not be as acute if — perhaps, when — Rio Tinto pulls the plug on its smelter at Tiwai Point, and the southern grid is upgraded to redirect its energy from Manapouri power station.

Even so, it is hoped the New Zealand Battery project will add to southern capacity by finding and then articulating the compelling reasons the likes of Lake Onslow can provide a "battery-style" buffer.

If justified, the South stands willing and able to contribute to what might well be the country’s single biggest infrastructure project in a generation. Southern engineers will say it has been too long since the last sod-turning ceremony in a region with still-significant unrealised generation potential.

Energy and Resources Minister Megan Woods yesterday said the plan would "decarbonise the grid" and make wholesale electricity cheaper. Crucially, it could create more than 3500 jobs.

To get there, though, officials will have to consider a raft of challenges as well as how the potential for southern storage might affect the way the national grid is used and on projects planned for the rest of the national energy network.

It was not that long ago that northern politicians, especially, justified a policy focus on new generation in the North Island on the not unrealistic need to base generation close to its market. Auckland consumers are far from the Clyde Dam.

There is plenty of work ahead, and it must make the most of our advantages.



Schemes such as these would also require significant upheaval of our current generating market. There will be little incentive for hydro generators to decrease hydro outputs and store water if they are allowed to continue a profit based model. I note accusations in recent weeks Meridian chose to spill water to maintain higher wholesale prices - effectively wasting energy, increasing market prices, and forcing non-renewable plants to operate. I would hope micro generation is also included in this reform. Any (no matter how small) extra energy returned to the grid will allow more water to be stored in lake Onslow.

Don't see why we would bother while the North Island refuses to pay their share of transmissions costs, ie the South Island pays the cost of the Cook Strait cables, etc. As it is the Electricity Authority's decision to pass on just a fraction of the cost to the North Island is being challenged. Why should we continue to pay for the North Island's growth when they fight even paying a small part of said costs of transmission?

Answer from Kiwi in Canada. Since all NZers paid to build the dams in the South Island, it seems very obvious the N.I.. should share the transmission costs....






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