Govt confirms Lake Onslow scheme scrapped

Lake Onslow. Photo: Stephen Jaquiery
Lake Onslow. Photo: Stephen Jaquiery
The government has today confirmed that it has scrapped the Lake Onslow pumped hydro scheme in Central Otago.

Energy Minister Simeon Brown said axing the $16 billion project had been a priority of the government’s 100-day plan "and we are delivering". 

The scheme had emerged as a leading contender in the previous Labour government's NZ Battery Project. 

Water from the nearby Clutha River would have been pumped up to the lake and released through turbines when hydro-electric lakes became depleted during dry periods.

Brown today said the "hugely wasteful project was pouring money down the drain at a time when we need to be reining in spending and focusing on rebuilding the economy and improving the lives of New Zealanders".

“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." 

He said industry experts had warned that the scheme would have a "chilling effect" on the pipeline of renewable electricity generation the country needed to reach its climate goals.

He said security of the country’s electricity supply was critically important and the government was 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.”