The Parliamentary Commissioner for the Environment says eliminating fossil fuel emissions from New Zealand will bring upheaval right throughout the economy.
“No sector of the economy will remain untouched given our pervasive reliance on burning fossil fuel,” he says.
Simon Upton's comments come in a new report looking at ways to decarbonise the electricity system, which he says will have a huge impact on the economy at large.
At present, New Zealand is 15% dependent on fossil fuel to generate electricity in an average year.
Though that is low by world standards, the Government wants to end it. The cost of doing that runs into the tens of billions of dollars and work is underway to try to find a way to pay for this.
In his report, Upton says there are three ways to live without a fossil fuel backstop for electricity generation.
One is to overbuild renewable capacity to provide a buffer, a second is to incentivise consumers to reduce their demand, and the third is to store renewable energy which can be harvested at times when it is plentiful.
In his report, Upton looks at various pathways for the future.
One of them is Business as Usual (BAU), another is predicated on closure of the Tiwai Point aluminium smelter, a third looks at green hydrogen production in the far south, and a fourth is the pumped hydro scheme proposed for Lake Onslow in Central Otago.
Upton wants all the alternatives to be based on similar assumptions, so that fair comparisons can be made.
The report done for Upton says the closure of the Tiwai Point aluminium smelter has the most immediate effect on residential electricity prices and emissions.
“In this pathway, benefits exceed costs and Tiwai Point meets the benchmark of a positive net present value (NPV) over the model period,” the report says.
The business as usual case is given little attention, and is used mainly as a benchmark to assess the other options.
The green hydrogen proposal in the far south is denounced as one of the poorest performing options. Residential prices would remain high and it would provide little energy security.
“All hydrogen pathways … return a negative NPV over the modelling period across all cost-of-capital assumptions and discount rates, indicating that the social benefits of this pathway do not outweigh the costs.” the report writes.
The green hydrogen proposal is often thought of as a way to use surplus hydro electric power if Tiwai Point closes. But this analysis assumes Tiwai Point remains open, and shares power with hydrogen producers via demand-side management.
The most dramatic of all the options under consideration is the proposed Lake Onslow pumped hydro scheme in central Otago.
This project would essentially pump water uphill using electricity when it is plentiful and run the water back through turbines when more electricity is needed.
It has become extremely controversial, in part because it will be sited at a remote location compared with the main centres of demand, and in part because it will be expensive, $17 billion.
But Lake Onslow gets a comparatively good review from Upton's team, because it suppresses seasonal volatility, thus driving down wholesale electricity prices and providing more long term certainty over prices.
They say it offers lower residential electricity prices than the BAU case, even after its capital costs are paid for, with household bills rising only 0.11 cents per kilowatt hour to 1.73 cents per kilowatt hour.
“The Onslow pathway also returns a positive NPV for all but the highest cost-of-capital and discount rate scenarios, suggesting further analysis into Onslow is warranted based on its ability to reduce seasonal wholesale electricity prices when compared to other scenarios,” the report says.
The report admits it is making several assumptions in this study. These include upgrading the national grid. This would include improvements to the HVDC link, sometimes called the Cook Strait cable.
But it notes this work is under consideration anyway, even without Lake Onslow being built. The study notes that its analysis does not include the costs associated with electricity outages or reduced supply during an extended dry year. But in a comment hedged with qualifications, he suggests Lake Onslow could save up to $130 million per year compared with BAU.
In releasing this study, Upton says he hopes for discussion and criticism from the public and the industry, and “robust" decision making.
“There is no perfect solution to today’s decarbonisation challenge,” he says.
“None of us can predict the future of technology or the shape of the economy in a warming and climate-disrupted planet.
“The scale of investment needed, no matter which path we choose, will be immense. That is why we need a better way of weighing up the options.
“The most we can hope for, and expect, is high-quality decision making based on even-handed treatment of the options."
71 Comments
As you oopsed - yes, they got there.
This is a great Report, intelligently nuanced - perhaps the best appraisal of where we have to go, to date. Thanks Interest.co for the coverage.
Variables not addressed, include a lowering of population - it's easier than reducing consumption per head.
Yes, an important omission - surely population had to be a consideration - or did they just assume an arbitrary growth factor? NZ could most certainly lower the population given (I think) the current birth rate is lower than replacement - is that right? (Luxon's have more babies idea aside).
I ran a find in this article and not one mention of expanding/upgrading the train system back through the regions, reducing commuter vehicles off the roads and planes back out of our skies. The update and maintenance costs are minuscule compared to the ongoing costs of road maintenance and fuel emissions etc. Have you ever monitored the air and sea traffic radars and seen just how much fuel is burning consistently out of sight? It's frightening...the global military traffic is phenomenal, even in 'peaceful' times.
Our family wanted to move to Tararua for a tree change, but be within 30 minutes or so of Massey U for our kids higher ed. Do you know how impossible public transport is in that area? Non existent! It's no wonder the region remains a backwater with no growth, frequently treated as though it doesn't exist(just like New Zealand is missing on so many maps). Who can move there without being able to afford spending a fortune on fossil fuel transportation. It's no wonder the poor are not able to grow and thrive in many regions. It's criminal...but then they want to shephard us all into 15 minute cities don't they, so I suppose why spend money on something you hope not to use??
I can't think why we would want to use less electricity. It is an important energy source that can replace other dirty fuels at relatively low cost, AND it can help make us better off and more able to address poverty etc in our society.
If you think about food is just energy, and would you suggest we should starve ourselves to make us better off?
You need to do some more homework. A good start, is to consciously abandon all your prior assumptions. It can take a few false starts, but is worth the effort.
Firstly, electricity is NOT an energy source. It is a vector; a pipeline, a transfer mechanism - pick the one that works for you. Trace hydro electricity back to the sun. Trace wind back to the sun. No Bull. Apart from nuclear, all energy is sun-sourced (fossil-fuels are fossilised sunlight). So the question is how to use that energy with least loss? Hence my passive-solar house - it takes the sun straight in and traps it. Why go via a dam, the grid and a heater?
Poverty? You need to address population (wealth is access to parts of the planet - the only source of anything - so less people means wealthier people. Which tells us economists have it a-about-face). Then there's the energy/money underwrite:
https://www.financialsense.com/contributors/chris-martenson/the-trouble…
Then maybe spend some time here: https://www.thegreatsimplification.com/
Ho hum. The source of water it my house is my tap. I think you are confusing the word "source" with "origin" or some such. If you are being picky and depending on your view on the big bang theory the source of all energy (and mass) is matter and antimatter. But this doesn't help us much and it doesn't really help your ad for the particular arrangement of mass and energy that is a passive solar house.
The question is how useful it is.
Yet another doorstop report from self interested bureaucrats in Wellington
While they (blithely) talk about the cost of decarbonizing the network they do not adequately cover the risk with their proposed model.
In a dry year or when the wind dont blow the lights will go out - which looks pretty third world
Lots of additional capacity will help - say geothermal but the best option remains gas turbine as part of the mix for the forseeable future - or we agree that Bryan's view should prevail
https://www.bassettbrashandhide.com/post/bryan-leyland-the-wind-and-sol…
Leyland is a smart guy in many ways, but flawed by pre-assumption. Remember his lot LOST in court - and were always going to. Also remember why.
As to nuclear, it only does electricity, uses a finite resource, and has pollution issues going hundreds of years into the future, for a benefit only fleetingly 'now'. That's a cost on all who follow.
https://research.abo.fi/ws/portalfiles/portal/32953035/ASSESSMENT_OF_TH…
We will be doing less - much less, and we will be working with intermittency (as I do, every day, offgrid. Today I started the washing-machine as the sun hit the panels, am airing the passive-solar house now the internal temp is over 23 degrees. I will bring the washing in when the sun goes off it about 4pm, hang it in the conservatory overnight - thus no moisture in the house. About 3pm, I'll close up the house and the temp will rise to 25/6 degrees. A sundown, the curtains get closed.By morning it will be down to 18, but having had no artificial heat. We will all just learn to live that way - and it's no hardship; quite the contrary).
I need one of those houses! Had my outdoor mountain walking gears on for days, kitchen hasn't risen about about 9 c. Off to find a pub with (yes) a fire for afternoon drinkies.
That said, I dnt get sick, colds or covid so cant be bad for me, just bloody unpleasant!
I have a certified Passive House (note: different to passive solar). To keep my house at 20-25 degrees throughout the year all I do is change the ventilation filters every 6 months, close the shutters in early December then open them again in late March. There is no damp, no mould, clothes dry in the house (faster in winter as lower humidity) with no health impact.
We also have grid-tied solar which produces more than we use each year making our yearly electric bill $0.
If all houses were built to this standard, it would save the owners, the health system and the grid many times the extra costs.
Passive Haus typically is too complex, and is very costly (which represents build energy, often).
Passive solar can be cheap as chips - and physics doesn't give a ---- about price. You need north-facing glazing, a heat-sink, super-insulation, and the ability to 'shutter' (in my case, opening external windows and internal flaps, and curtains).
Any architect worth their salt, should be able to do passive solar. If they can't, they should be.... somewhere else. I still have my 1983 sketches of passive additions to our first house... it's nothing new.
PDK the way you live is admirable but most NZer's or global citizens wont or cannot - many start to hyperventilate if their cell phone battery is flat for 10 minutes. They expect to walk in the door turn on the heat pump and/or aircon and that it will work all the time, every time.
To deliver, Govt's will buckle and do what ever they need to to keep the lights on despite their weasel words now - and of course they are making it worse by telling everyone to get the new EV and get it now
So fossil fuels remain base load for some time to come and globally probably more nuclear. Pumped hydro may look good although I disagree. Regardless its only going to be a tiny impact and doesnt solve the base load problem that no one wants to face.
Warmer world - best we focus on adapting as no govt has the balls to turn the lights off yet are espousing solutions that will result in exactly that scenario
Good to see you are ahead of the curve
W
The only thing with your situation is most young people are way to busy and what hang washing just throw it in to the dryer as they want the clothes. And even the people on benefits who are supposedly short of money still use the dryer wouldn't even do hand washing. No wonder the real poor people in countries like India Africa think we are so wealthy.
With respect to Bryan Leyland's May 17 comment on pumped storage in the above link, he states that Onslow would not be used to backup wind and solar. This is incorrect and there needs to be distinction made between the motivation for building Lake Onslow pumped storage and its mode of operation. The motivation is to provide a means for power backup in a dry year in the absence of fossil fuels. However, its mode of operation will be almost always to provide firming for wind and solar - as achieved by on-going purchasing of power at low prices and selling at higher prices.
Dry years are not so common and pumped storage at Lake Onslow would never pay for itself if it did nothing between dry years.
Fortunately, the Onslow location means that a large lower reservoir is not needed because the "reservoir" will be the Clutha River downstream of Lake Roxburgh, which is New Zealand's largest river by discharge.
The increased evaporation loss from an expanded Lake Onslow translates to less than two cubic metres per second, which would have to be pumped up in excess of what comes back down during generating. A more significant loss would be through the pump storage operational inefficiencies. However, all energy losses are likely to be more than made up by reduced spill losses from the Waitaki power scheme. That is, the pumped storage scheme should be in excess of 100 % net efficiency, taking spill reduction into account. The spill reduction will arise mainly as a consequence of Onslow power purchases for pumping, resulting in reduction of Lake Pukaki high water levels so it has more space to hold flood inflows.
Your assumption being that additional load is required (Onslow filling) in the SI to use up excess generation of the Waitaki scheme in advance of the significant snow melt or significant rain in the Southern Alps. Is that true? I very much doubt that the Waitaki scheme would be constrained in its generation in situations like that. Assuming of course that the forecasting of this increased water flow is done by competent parties. And assuming that the HVDC is operating at capacity northwards.
During the increased water flow periods of course, the hydro generators will be operating flat out.
There is no excess Waitaki generation involved. What would happen is that high water levels in Lake Pukaki and the other hydro lakes will correlate generally to low electricity prices. That's when Onslow would purchase significant amounts of power for pumping. If Meridian was the seller, water would be released from Lake Pukaki to provide some or all of that Onslow power demand. The Lake Pukaki level would thus be reduced from its previous high. If a major inflow event happened later there would be storage space available for some or all of that water volume which would otherwise have been lost as spill on the down-river hydro stations.
The HVDC operating at capacity would reduce South Island prices. However, there is no assumption required that it must be operating at capacity before Onslow could purchase power for pumping
High lake inflows can't be forecast very far in advance and there is no requirement that they need to be.
The change in hydro lake operating mode (Pukaki and others) would arise just as a consequence of Onslow being a player in the electricity market.
Spill years are not so common. However, very high inflows can result in major spill events on the Waitaki scheme, with considerable lost generating opportunity. It is hard though to quantify how much time-averaged energy gain there would be from Onslow's spill reduction effect because that would require simulation of the NZ electricity market on a day by day basis with Onslow assumed to be in operation. If the scheme advances to a detailed business case study then hopefully the energy gain from spill reduction will be estimated to some degree of accuracy.
Of course, all Onslow bets are off if the government loses the election.
".. If a major inflow event happened later there would be storage space available for some or all of that water volume which would otherwise have been lost as spill on the down-river hydro stations......
High lake inflows can't be forecast very far in advance and there is no requirement that they need to be..."
Ok so Onslow filling caused lower lake levels. Plus you say there is no need to forecast accurately. In that case if no further significant inflows occurred, filling Onslow would result in less future generation to the general market by the Waitaki plants....
By the way these things can be modelled by programs such as vSPD, e market offer, generation expansion model. Which I used. And the generators have inflow models.
You seem to imply that there is surplus Waitaki generation to be used in this way. Managed badly, or managed badly on purpose with the aim to manipulate prices somehow, sure. A surplus. At certain times of the day other must run plant may result in a temporary lack of a requirement of Waitaki. But that would be factored in. By just generally, and with a longer time frame than just daily, I am not so sure that there is an excess from this or Contacts plants etc..
Why would there be a need for any more generation now if that were the case?
If Meridian made a commercial decision to sell some of its Waitaki power to Onslow for pumping then that block of power would of course not be available for selling to somebody else. If Meridian felt it could create more income at some point in time by selling to the "general" market (ie not Onslow) then it would do that. The new mode of hydro lake operation would just arise as a consequence of commercial decisions by the generators to use Onslow to maximise their income, taking advantage of a higher floor price in wet years than would be the case if Onslow was not there.
None of this has any implication that there must somehow be on-going surplus Waitaki generation - it is simply a commercial transaction of selling power to an industry. Onslow in pumping mode would be no different to any other power-consuming industry. The selling system would work the same even if there was never any Waitaki spill at any time. However, having Lake Pukaki less often at highest levels gives Meridian a bonus because in some years the Waitaki scheme will generate more power (from spill reduction) than would have been the case if Onslow was not in operation. As far as our simulations can tell, this would equate (on a time-averaged basis) to a small additional power station that would offset the Onslow round-trip energy losses with a bit left over. Hopefully that will be clarified by further work by NZ Battery.
As long as there is space in Lake Pukaki to hold future high inflows, an ability to forecast the inflows is of no consequence. In any case, the very big inflows are from sudden weather extremes and associated snowmelt events that can't be predicted beyond the time scale of weather forecasts. Generator "inflow models" beyond that time scale are worthless for major event prediction. However, they may anticipate an increased probability of such events, in which case it would be a good time to start lowering the lake by selling power to Onslow.
There is no implication of surplus from Contact's Clutha dams. They operate as run of the river for practical purposes and Onslow would be of commercial advantage to Contact by providing a floor price at times of highest Clutha flow when the stations are at peak generation.
I agree Blobbes.Treasury should expect cost benefit analysis on consistent assumptions in every area of government involvement. It should precede political advocacy, and extend right across the economy, not just energy policy, and not excluding social investment. Its lack is the current governments' most egregious fault. Because of this, i'd decided, possibly incorrectly, that pumped hydro was a complete boondoggle. It may still be, if the pumped hydro CBA has been done on an unlikely low capex.
Despite Powerdowns position, adaptation to a low carbon economy requires investment, primarily by private enterprise.
What like lake dunstan did most people in Cromwall and Alexander think it's the best thing now. Also allows high density of cherry orchards as permanent water also allowing the most southern desert in NZ to grow grass. Everybody thinks down there think lake dunstan has way more benefits than negatives now.
"But Lake Onslow gets a comparatively good review from Upton's team, because it suppresses seasonal volatility, thus driving down wholesale electricity prices and providing more long term certainty over prices."
So why would the Gentailers invest in new generation. It is the volatility that allows them to profit from gaming of the system.
Let's nationalise the whole system(including lines companies)!
What rubbish pdk! A minority shareholding was sold, although heaven only knows what that bag of cash was used for! Another story.
I would guess those major sold-down power generators are now part owned by kiwisaver entities (ie owned indirectly by many hundreds of thousands of ordinary kiwis) And people like my good self invested our own hard-earned, tax-paid savings into these entities.
Nothing was "stolen", the same power companies are majority state owned with substantial dividends being paid into the public purse. (Not that state control stopped a couple of them indulging in dodgy commercial practices like deliberately spilling water to push the price of power up)
There is plenty of room to debate how, what, and where the electricity industry should be organised, but to talk about nationalising it, without recompense to existing legal owners is, err,...the way to go to become the Venezuela of the South Pacific.
You invested your hard-earned cash in something you already owned?
That has to be a false statement.
Kiwisavers making money out of charging themselves?
Another false statement.
A bit like 'making money'...
I suggest there were winners and losers. I was a loser - because shares in our lines company were issued per usage. Those of us who were frugal, were screwed. One of the reasons I went offgrid in 04.
Truth, eh? Always best, even if it's a little uncomfortable. Where society is headed - globally and locally - we need to keep to truths.
This project still makes zero sense to me.
Let's be clear what the report does - it compares BAU and Onslow storage, Tiwai closure reducing demand, and Tiwai operating with Southern Green Hydrogen to increase demand. I don't know why this last one is included - grid demand is increased and the hydrogen is to be exported, not used as storage.
Ahuroa stores 5 TWh of electricity after conversion from natural gas already, and is infrastructure that already exists.
~0.5 GW electricity can be withdrawn as gas and generated from Ahuroa already.
From this report, 500 MW of hydrogen electrolysers can be obtained for $0.75 billion. I.e. $4.5 billion for 1 GW electricity to hydrogen to electricity pathway. It is less cost if a cogeneration system is used. ($~3 billion.)
The Taranaki Bight windfarm costs $5 billion for a 1 GW generation.
Plus various geothermal projects.
There is much existing storage, generation infrastructure and experienced people already from the fossil chemical industry.
So am I really to believe the best economic and environmental option for energy storage and electricity generation does not include $17 billion spent on storage, renewable generation, power-to-synthetic fuels, renewable fuel-to-power generation, and usage of existing infrastructure?
I think the green hydrogen is a reverse battery type option.Build excess generation ( at todays usage), use it to produce hydrogen,but have an agreement to turn that production off in a dry year .
The steel plant electrification is been done on a similar principle.
In the report, the green hydrogen is expected to be exported overseas, and the scenario is considering whether it is worth more to the economy than the increase in electricity prices.
No one is claiming that the steel plant electrification is an option for relevant comparison to electricity storage.
“A reliable supply of firmed renewable energy is critical to this initiative and we’re delighted by the pioneering and creative partnership with Contact Energy to provide a competitive and innovative supply agreement. The electric arc furnace provides New Zealand Steel with significantly more production flexibility which means we can scale down production at times of peak demand or supply shortages".
I'm not sure what you're trying to say.
New Zealand Steel produces Steel, and Contact Energy supplies electricity.
New Zealand Steel's media statement refers to New Zealand Steel using less electricity when electricity is too expensive to economically produce steel, whether because demand is much higher than supply or because supply is much lower than demand.
The Electric Arc Furnace at New Zealand Steel is because the bulk of New Zealand Steel's carbon emissions comes from burning coal to provide the heat of reaction and the carbon for reducing oxidised iron sand (0% carbon) to pig iron (5% carbon) + carbon oxides, and then oxidising the carbon out of the pig iron to end up with steel (< 0.3% carbon).
This is a completely different project, unrelated to the electricity system. As conversion from petrol to electric cars is not in the report, I can only assume the demand-side of the electricity system was out of scope, in which case, why wasn't industrial production of green hydrogen for export in Southland?
No, you've misread New Zealand Steel's media release.
Chief Executive Robin Davies says:
A reliable supply of firmed renewable energy is critical to this initiative and we’re delighted by the pioneering and creative partnership with Contact Energy to provide a competitive and innovative supply agreement. The electric arc furnace provides New Zealand Steel with significantly more production flexibility which means we can scale down production at times of peak demand or supply shortages.
Robin Davies is referring to the demand for electricity. New Zealand Steel reduces electricity demand (and production) when it is cost-effective. That's why both electricity demand and Contact's supply matter. It's an electric heater, not a coal-fired kiln. It can be switched off at the wall, which will happen at breakfast and dinner times (off-peak).
I imagine the deal with Contact Energy is to guarantee that the electricity is from a wind turbine, not Huntly Coal, and agree on price and some security of base-load demand so that a 30 MW wind farm doesn't go to waste.
Thank you for taking the time to respond, Earl.
With that updated information, I understand that 1.7 TWh cannot be used without flooding the reservoir. So this means a $300 million storage facility is 3.3 TWh, not 5 TWh.
As a layperson, it is difficult to understand how that cannot be prevented and perhaps pumped out for $340 million annually.
Ahuroa currently exists and is, as far as I'm aware, the first in the world to do something against the usual. New Zealand does challenging and innovative projects like that very well.
However,
1. The examples I discussed are neither here nor there. Because my point is not "Just use Ahuroa". It is "In the modern world, faster, cheaper, better alternatives are not being considered because of precognitive decision making".
- Has upgrading and using the existing natural gas grid been considered, for example?
- How much storage was there in the national gas grid before the Ahuroa Storage Facility was built in 2008?
- How much storage is there for liquid fuels under every petrol station in the country?
- Has any consideration been given to using the lessons from Ahuroa to update the approach for the next similar project?
There are other options available, and those options were not in that report. That's all I'm saying.
2. Expertise - New Zealand does have a small population with limited scientific and engineering expertise. What expertise we do have, is focused on niche disciplines. Simultaneously, we must stick to our knitting and know when to change the pattern.
Would you agree inflowing groundwater is a predictable consequence of having a reservoir underground and below sea level?
Why didn't New Zealand experts pick up and advise on that before 2021 and before the upgrade? (The facility was commissioned in 2011?)
Will the facility be mothballed this year?
As I've stated, we have a lot of expertise in hydro dams and a lot of expertise in other areas.
3. Risk
As I understand it, Lake Onslow is proposed to cost $16 billion for storage and generation, with the earliest date it would be useful being 2036. Operationally, it will either be cost-effective or it won't. We have done hydro dams well for a very long period of time. I believed the economic opportunities were taken, and we were left with the dregs.
Other alternatives are modular, not all or nothing like the Onslow scheme. The Government can buy a lot of storage, production and generation by 2036 instead of a project costing at least $16 billion (possibly longer and more expensive after detailed engineering is done).
So is it truly the only cost-effective option?
Plus, surely the cost of capital is the long-term average for the Government while it controls inflation at approximately 1.5%. In this case, isn't it 5.2%, not 2%?
No one wants the Government to spend $16 billion, plus between 0.32 and 0.82 billion per year, on a project a couple of errant multinationals make redundant by day zero.
4. The cost-efficiency of the approach.
As Alex Zhou pointed out a year ago, a lot of money goes towards a comparatively small uptake in electric cars, despite increasing the efficiency in buildings being much more cost-efficient.
12% of our energy is residential usage. 40% of housing probably isn't even insulated. Halving residential electricity usage is worth how much of Lake Onslow's generation?
As I see it, the risk of wasted spending is much higher than the risk associated with not considering and adopting the approaches used by countries with more scientific and engineering expertise than New Zealand.
Hi AncientCompass - I can only respond generally on the Ahuroa issue, wearing my groundwater hat. The critical factor is the degree of geological sealing around the depleted gas field. That's very difficult to anticipate, even with the best geophysics. Anyway, the experiment has now been done and it's now evident that there is a connection to adjacent aquifers, with a pressure gradient moving groundwater in. Trying to block deep groundwater from going where it wants to go is really difficult. I may be wrong but I would guess that in time the Ahuroa facility will be abandoned. In any case, it serves as a warning that injection storage of gas into a deep geological formation is not worth the risk for helping to offset dry years.
Similarly we can't risk our electricity supply resilience on "novel" schemes that might not work. Onslow is massively expensive but it has a bone-head simplicity using boring but reliable technology. It would be unique in scale though, being the world's largest pump storage scheme by energy measure.
Would it be cost effective? That would only be determined if in July/August a decision is made to initiate a detailed business case for Onslow. But it wouldn't be just Onslow because it is so far away in time. NZ Battery are looking at other possibilities as well - stand-by geothermal, green hydrogen, biomass, and possible further pumped storage near Lake Moawhango. I would hope that something as silly as green hydrogen is thrown out. However, it would not be surprising if geothermal and/or biomass go forward for further study, along with Onslow.
In fairness to NZ Battery, their Phase 1 investigations did take a serious look at a whole host of technologies - even considering the possibility of an undersea power cable to Australia. You can get more info via their web page:
https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resourc…
Do you have any evidence the Ahuroa facility will be abandoned and not repeated elsewhere?
The critical factor seems to be the pressure gradient. If you read Contact's update, it seems 4 PJs of gas must stay in the reservoir to prevent water ingress.
The novelty of the Ahuroa Gas Storage Facility is that New Zealanders did not use a salt cave. Everything else about it is boring and reliable science and technology. It appears the water ingress occurred because "historic operating practices and periods of low operating pressure exacerbated by reduced gas supply have seen water ingress into the reservoir." We've known water flows downhill since, at the latest, the Minoans. We know about pressure gradients.
Note I'm not disputing the science here. I'm disputing the societal considerations. I'm starting with the assumption that any solution the Government spends over $16 billion on, then services that debt at 2-5% annually, will be scientifically sound.
However, we are discussing these as engineering projects, and the economics has to work as well as the science.
A detailed business case would only determine the cost-effectiveness of the options it considers, and so far, the process seems to exclude options individually that would work well together combined.
For example, it would seem Group 4, Option 17 is thrown out. But having a surplus electricity supply is vital for all options.
Group 5, Option 22 appears yellow for practicability because of the major hazard facility requirement. On the other hand, Group 6, Option 24 would provide a fair amount of carbon to make methane from. Group 5 Option 22 with carbon feedstock makes more sense than ammonia.
WSP also comment Option 26's feasibility could be investigated more - and that opens up the entire existing storage and distribution network currently used for transport needs.
I have not found the May 2022 or October 2022 WSP reports online: NZ Battery Project Other Technologies Feasibility Study Options Analysis Report and NZ Battery Project, Other Technologies Feasibility Study.
How are the green fuel options silly? You've got too much electricity at the wrong time. You turn water into hydrogen, combine it with nitrogen or carbon, bury it underground, and eventually forget about it from the carboniferous until 2023.
The rest of the world's science and engineering expertise is picking green fuels as the best solution to mitigate variability in the electricity grid. The risk is that the rest of the world's scientific and engineering expertise is wrong enough for Lake Onslow's economic business case to remain intact when the lake is finally full.
None of this matters. To me, the process seems to justify a foregone conclusion that started with the solution instead of a genuine problem-solving and decision-making exercise.
Not because of which solution was chosen but because of the price tag in line with other next-best alternatives.
Time will tell as far as Ahuroa is concerned. Maybe it will survive. But a depleted gas field in a sedimentary geological formation is about as different to a salt cavern as you can get.
Green hydrogen was always going to be a loser as a large-scale energy player because the energy conversion loss is hopeless. It is surprising that the New Zealand green hydrogen myth has lasted as long as it has. Imagine what people would say if the Onslow round trip efficiency was less than 30%.
But Onslow is not predetermined. It still has to be selected for detailed business case study in preference to the portfolio / Moawhango option. Even then it would still vanish in October if the fossil fuel party wins the election.
Earl , anything happening with this proposal.https://www.waikato.ac.nz/news-opinion/media/2012/the-possibility-of-a-…
I think Contact Energy did look at it briefly but I'm not sure. A negative factor would be the cost of a long transmission line to the scheme. It wouldn't be of much value for dry years because there is only a small energy storage capacity in Lake Hawea. One bit of hydro engineering that might be considered in that area, if Contact was interested, would be to control the Lake Wanaka outlet but still keep the lake operating range within its normal natural range. That would reduce the township lake shore flooding that happens from time to time. It would require community agreement and probably a change to the Lake Wanaka preservation act.
More of an administrative exercise,whilst interesting the generation industry seems to have moved on.Geothermal under construction adds 1600 gwh in q4 2023,an additional 430 gwh in q4 2024,providing firm baseline.Hydro upgrades (regeneration and transformer upgrades) will add 500 gwh by 2025.
Flexible generation contracts provide around 150 mw of available generation for peak load over winter.This is without the solar or wind under build.
I'd like to know what the BAU base case is.
Is that to replace existing thermal plant (when they get old) and build more economical thermal plant like combined cycle when it is sensible to do so? I hope so because if you do not include the most economical option, you do not know what the quantum is of this incredibly expensive idealogically driven path we seem to be going down. (Zero carbon).
"export"
The purpose of my discussion points about $17 billion being a lot of money, and alternative, viable technologies, which are expected to be the dominant technologies globally, is that there are alternative options.
Apparently, these were dismissed because everyone has already decided on the solution.
Agree the lack of considering realistic options is the weakness here. The fact that the NPV ordering just follows the impact on net domestic electricity supply in the early years should ring alarm bells about suboptimisation on total welfare.
One simple example is they ignore the value of the options that are created by not relying on a 100 year life time asset.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.