However, an early proponent of the plan to create a massive pumped hydro storage lake at Lake Onslow, east of Roxburgh, said New Zealand’s electricity generator-retailer companies often used their annual meetings to talk down the plan.
The Lake Onslow project would involve the creation of a large lake used to store water for hydroelectricity production.
Electricity would be used to pump water uphill into the storage lake which could then support the South Island’s other hydro-electric lakes during dry years.
In this way, the coal-burning Huntly Power Station would not be required as a back-up.
It is one option the Government is considering in the New Zealand Battery Project, an investigation into pumped hydro against other possible solutions to New Zealand’s dry year electricity problem.
Yesterday, RNZ reported Contact chairman Rob McDonald, speaking at the company’s annual meeting, said Lake Onslow was a less than ideal location for a large storage lake and Contact feared the estimated cost was vastly understated.
The comments came on the back of a report by the Boston Consulting Group (BCG), commissioned by Contact, Genesis Energy, Mercury, Meridian Energy and several lines companies, to look at how the electricity sector could evolve to meet the country’s decarbonisation objectives.
Among the report’s findings was that to get to near 100% renewable electricity generation by 2030 would require a $42 billion investment before the end of the decade.
In a statement Contact provided to the Otago Daily Times yesterday, Mr McDonald said Contact was keen to work with the Government on options to get New Zealand closer to 100% renewable electricity.
"We have a direct interest in the specifics of the Lake Onslow scheme given the potential connection with Contact Energy's Roxburgh Dam because its operation would impact water flows around the Roxburgh Dam.
"Although the NZ Battery question is the right one, a multi-billion-dollar solution such as Onslow, with real risks of cost blowouts as has been experienced with a similar but smaller scheme in Australia [Snowy River Hydro], it is high-risk and expensive."
University of Waikato school of science associate professor Earl Bardsley, who first mooted the plan, said major power generators had from the beginning had a negative reaction to the Onslow project, which could bring down electricity prices, or at least end the volatility of the wholesale market.
"My opinion, for what’s it worth, is they are not so concerned with Onslow as such. I think the real worry is that the Government will use Onslow as kind of a price-fixing mechanism."
He said he believed Onslow would be set up to operate in the electricity market just like any other big player.
The Government’s Lake Onslow feasibility study is expected to be completed by the end of this year or early next year.
A spokeswoman for Energy and Resources Minister Megan Woods said the minister could respond today.
