The project was also intended to provide benefits for the southern half of New Zealand which would overcome a "residual sense of grievance that despite doing so much for New Zealand, there is little local benefit to the South", Associate Prof Earl Bardsley, of Waikato University, said.
The National-led government rejected the proposal shortly after it was elected in 2023. The proposal was to store water in Lake Onslow from the Clutha River in high flow periods. The water would then be used to create electricity during high demand periods and low water flows. It was budgeted at $16 billion to build.
The idea had originated with Assoc Prof Bardsley. He had come up with the pumped hydro battery project in 2002 and the idea had been passed round ever since. Labour backed an investigation into the project in 2020 and spent $30 million on analysis.
It re-emerged this week after the Otago Daily Times revealed a new group, Clutha Pumped Hydro Consortium, had contacted landowners in the area about interest in a proposed pumped hydro operation.
Assoc Prof Bardsley said, when contacted, he wondered where the backers would get the $16b to build the project but it was in reality something the country needed.
"I can’t see Onslow not being built given the trouble we are getting ourselves into. We have no sites left on the Clutha and the lower Waitaki. What water remains that we can get to power electricity? Especially now when it is all about emissions," he said.
"After the experience of last year we have to find a way to keep [electricity] prices down. You can’t grow the economy when you have expensive electricity."
"There are all these mirages around various power schemes, nuclear fusion, other ideas, but we need to get serious about it.
"Long-term, the critical thing for the New Zealand economy is to have low-cost and reliable electricity, including through dry years. It is hard to see this being achieved without the Lake Onslow scheme."
He said one of the reasons to dump the scheme two years ago came from a "a piece of spin" by a generator which was seized on by the incoming National government. The scheme was said to have dampened down investment in generation projects.
But he said it was actually the other way around.
The Onslow scheme would operate by buying renewable energy and using that power to pump water from the Clutha River up to Lake Onslow. Some time later the water was used to generate power. The only way this power could undercut renewable energy in the market would be if the Onslow scheme was operating as better than a perpetual motion machine.
"That is, all costs incurred from the pumping and generating inefficiencies were somehow set to zero and Onslow could sell its power for cheaper than the renewable energy it purchased in the first place."
It just could not operate like that. Evidence showed generation investment continued while the Onslow business study was being done.
The consortium has four directors, three born in Otago. Despite attempts yesterday, no-one could identify the directors.
Support might be sought from South Island major users of electricity, the consortium said.
Ken Smales, a former executive at Meridian Energy, is leading the initial consultation.
