sign up log in
Want to go ad-free? Find out how, here.

Earl Bardsley argues the NZ Battery Project should be restarted and its dry year infrastructure proposal should be included in the 30-year National Infrastructure Plan

Public Policy / opinion
Earl Bardsley argues the NZ Battery Project should be restarted and its dry year infrastructure proposal should be included in the 30-year National Infrastructure Plan
dam
Photo by Ivani De Silva on Unsplash.

By Earl Bardsley*

This year has been tough for Energy Minister Simeon Brown. After the election, he quickly terminated the NZ Battery Project team that was set up by the previous government to seek options for handling reduced hydro power in dry years. The team was not even given time to complete a report on the best alternatives that had been identified to date.

Ironically, Brown and the coalition government are now dealing with the consequences of the worst dry year since 1992.

Along with immediate responses to the energy situation, it might have been hoped there would be government motivation to bring back the NZ Battery Project group.

Instead, their effort has diverted toward scoring political points. 

For example, the current limited amount of gas for backup power generation was somehow supposed to link to the 2018 restriction on gas and oil exploration. Similarly, the present lack of sufficient renewable generation supposedly indicates some form of negative influence from previous considerations of the Lake Onslow pumped storage scheme.

To the extent that dry year solutions have been considered at all, the government maintains faith that the electricity market will find a way. That is, high electricity prices in dry years give a market signal that there is money to be made in solving the problem. 

This approach has failed in the past. The high wholesale electricity prices and industry impacts in the 2008 dry year were not followed by any developments that would keep prices down when the next dry year came along.

Government intervention in 2024 is just to the extent of making consenting easier for new renewable projects. The intention is that this will provide the proverbial “doubling of renewable generation”.

As far as dry years are concerned, the worth of easier consenting can be checked against an extreme hypothetical. Suppose there is no consenting needed for any onshore or offshore renewable project. All submitted applications are accepted on a same-day basis, with an absence of any red or green tape.

This would be of no help with the dry year problem.

The reason is that dry years don’t happen so often. No gentailer or overseas investor is going to construct wind or solar generation beyond meeting the anticipated power demands of normal hydrological years. That is, those years when hydro power generation is about average. There is little money to be made by having new generating capacity that earns minimal income except in dry years.

Nor is there any moral obligation involved. Some commentators have expressed indignation that the gentailers should have been better prepared for the dry 2024 winter. That is the type of question that would be raised with a regional council in the event of unexpected damage caused by a flood event destroying a flood bank. 

Despite what may be written down in mission statements, the major generators are commercial entities that cannot be expected to provide national insurance against dry years. Meridian Energy is not about to build the Lake Onslow pumped storage scheme.

In short, a final solution to the dry year problem must come from some form of government-funded new infrastructure. Neither the electricity market nor the gentailers are going to be of help.

The question is – what is the best infrastructure? This is what was being considered by the NZ Battery team prior to its abrupt termination after the election.

A new factor has come into play in all this, with the recent announcement by Simeon Brown that facilities for LNG importing will be in place no later than the winter of 2026. That is, before the next election.

LNG imports offer energy security but little else. There is a carbon footprint involved and dry year high power prices will remain. It is therefore not surprising that renewable energy with storage has been proposed as a better solution. 

Building significant renewable energy storage capacity has the disadvantage of needing lengthy construction time.

However, LNG importing is going to happen anyway. This suggests the interesting possibility of concurrent development of a renewable energy storage system. In this way, LNG imports and perhaps local gas supply can cover dry year risk in the meantime. 

On completion, the storage system would largely remove the need for further LNG imports. The LNG port facility remains for rare contingencies such as several dry years in sequence.

One renewable energy storage candidate is the Lake Onslow scheme, which would provide reliable dry year power and peaking capacity at less cost than gas or coal. However, its long construction time to 2035 or beyond has always been a negative factor. Having LNG availability to provide temporary dry year security could change the equation.

This is not to say that the Lake Onslow scheme must be the best solution. For example, Onslow or an alternative backup geothermal power scheme both have respective geographical advantages. The geothermal region is not far from the main locations of power consumption in the North Island. The Onslow scheme is well placed in Otago to buffer the South Island main hydro lakes.

Ideally, the NZ Battery Project should be restarted and its dry year infrastructure proposal, whatever it may be, gets slotted with high priority into the coming 30-year National Infrastructure Plan.

It comes back to the politics of the moment. Left to itself, the coalition government is not going to restart investigations for dry year infrastructure of any form. However, it is also needing an energy accommodation with Labour and might be willing to give up on waiting for market-based solutions. Would Labour redefining its 100% renewable electricity policy as a long-term aspiration goal be sufficient to enable a restart of the NZ Battery Project?  


*Earl Bardsley is Associate Professor at the University of Waikato School of Science. He is the original proposer of the idea of pumped storage at Lake Onslow in Central Otago, as an alternative to burning coal and gas in dry years when hydro lakes are low. Bardsley spoke about the Lake Onslow idea in an episode of the Of Interest podcast in 2022.

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.

66 Comments

So: no plan to develop our sustainable power infrastructure that won't be undone by our inability to collaborate, unrealistic magical thinking, a lack of creativity, and political sabotage. Business As Usual.

While attention-getting giant projects like Lake Onslow are nearly impossible to achieve now becasue they become so politicised and mired in planning process, as an illustrative example, solutions like a smart network including technology like, say, grid-level molten salt batteries would give the same result while being uncontroversial so they are actually achievable, giving much greater resiliency to the network becasue all the eggs aren't in one basket, and where expenditure can be staged while capacity builds.

Others do it: why can't we?

A good exploration is Alan Finkel's book: Powering Up. He was Australia's Chief Scientist, so he knows what he's talking about in terms managing the entire energy supply chain - and the Aussies are getting it done.

Up
11

It would be great to have a cheaper storage technology, but are there any significant molten salt batteries in operation anywhere?

Up
1

Us defence developed one , sold it off to an Austrian company, they are neither significantly cheaper nor energy dense.

Up
2

Of course it isn't cheaper. Molten salt is yet to be commercially deployed at scale for the costs to come down dramatically, as happens with most other technologies. Molten salt has its place in being able to retain more energy and discharge over a much longer duration. The CSP technology that has passed feasibility study and will go into construction soon in South Australia has rated capacity and storage of 30 MW / 288 MWh.

FYI the landed cost of LFP batteries in Australia for grid-scale deployment dropped 40% just between 2020 and 2024 and much of the credit goes to the EV industry that spent billions upon billions in the last decade on improving its chemistry plus the economies of scale in mass production.

Up
3

Yeah , i know a bit about batteries. 

Its unclear wether they are talking about molten salts to store heat , or molten salts to store power. 

Its been around for years , and hasn't quite got an advantage over lead acid .  

Up
2

ARENA funded several solar projects back in the early 2010s when much of the world was not looking at the tech positively, which has allowed them to be ahead of the global deployment curve.
The agency is currently looking to fund a very exciting solar thermal project that combines concentrated solar energy with molten salt storage technology.

The Aussies seem less risk-averse than their poorer cousins across the ditch and their industries don't share the same mental block as Kiwi businesses when it comes to remunerating workers well for their skill and talent.

Up
6

Good news for Port Augusta ... they lost hundreds of jobs with the shutting of the coal fired power plant ...

... where Australia leads with the transition from fossil fuel derived electricity to renewables , we ought to be closely watching & cherry picking the systems suitable for us ... 

Up
0

What a bit like snowy phase 2 how much has that gone up by and blowen the budget think 12 billion now to finish imagine if that was in NZ after all apparently we are the worst at big infrastructure blow outs

Up
4

Yes however if the ozzys stuff up or wind up in economic turmoil, they can keep pulling money/resources out of the ground and selling them off to pay for their planned infrastructure. NZ doesn't have the same resources to draw from.

Up
3

Australian electricity generation - fuel mix | energy.gov.au

Fossil fuels contributed 65% of total electricity generation in 2023, including coal (46%), gas (17%) and oil (2%)

Fossil fuels (coal, oil and gas) accounted for 91% of Australia’s primary energy mix in 2021-22. Oil accounted for the largest share of Australia’s primary energy mix in 2021-22, at 37%, followed by coal (28%) and gas (27%). Renewable energy sources accounted for 9

And fossil fuels are leaving us. As, I think, this Government has started to understand (you can smell the panic). 

Up
1

Despite what may be written down in mission statements, the major generators are commercial entities that cannot be expected to provide national insurance against dry years.

But but but National told us the market would come up with a solution already when they flogged off the previous dry year solution those damn commies built.

The review concluded that the reserve energy scheme reduced security of supply by encouraging market participants to rely on the then Electricity Commission to ensure security, and by discouraging investment by electricity generaytors in peaker plants.

https://www.beehive.govt.nz/release/whirinaki-plant-be-sold

Up
12

Looks like Gerry Brownlee doesn't know how to use spellcheck either

Up
4

... we need more electricity production : Does Onslow provide that ? ... no ... it's an exceedingly expensive insurance project , insurance against dry years ...

Whereas , the same amount of money tipped into solar / geothermal / wind yields increased supply in a much shorter timeframe  .... and , that in itself takes the pressure off the southern hydro lakes ... allowing them to act as " batteries " when levels rise ...

Up
6

I've lived on solar longer than you, GBH.

I was, at one time, co-chair of Solar Action - a group dedicated to raising awareness and uptake of PV. 

But you need to know what you're talking about, before you comment. Peak, scale, and timeframe are variables you need to 'gen up on. 

BTW - I'm betting you are no taller that you were last year - probably smaller. 

Up
7

... I've " lived on solar " since the day I was born ... 

There are no limits to growth ...

Up
5

I assume the battery project, were it not cancelled, would have covered this approach, but it certainly seems plausible.

With the $16 billion price tag we could build 2 GW of new wind, 3 GW of solar and 1 GW of geothermal using today's tech based on recent projects.

Combined with a some batteries for peaking, and bit of coal at Huntly in case of emergencies we should be able to manage ok. In the future something like the torrefied pellets that were trialed could replace the coal. Perhaps Huntly would need to be nationalised as a security of supply plant.

Up
1

Much as the article says, you can't expect Genesis to keep Huntly's coal burners on standby for emergencies only. It's not in their commercial interest to. They're planning to have totally mothballed the remaining coal units by 2030.

Emergency supply would need something above what the market can provide, unless dry year generation continues to be worth $1000/MW and somehow self-justifying, but that doesn't seem like a good solution for industry. So yeah, renationalising Huntly maybe.

Up
5

Even if Onslow were built, we would probably need to keep Huntly and perhaps Whirinaki as a backup in case of a failure in the HVDC link. Either nationalising it or subsidising Genesis or whoever to keep in on standby would be the only options. A possible alternative would be a few days worth of storage in the North Island, perhaps batteries, pumped storage, or some other new tech.

Up
4

Or we could live within Limits.

Anthropocentric arrogance comes in many hues - including well-meaning green ones. 

Up
2

Meridian's Power boss Barclay was on the radio this morning, he stated:

"In the last 14 years in this country, demand hasn't grown a bit... But in that time, not only Meridian, but across the whole sector, we've invested about $10b in replacing gas and coal-fired plants mostly. That's effectively a quarter of the generation capacity has been replaced in the last 14 years".

Pumped hydro can replace coal and gas power plants and instead of burning imported fuel we use cheap renewable power to fill the lake. once coal and gas are out the price of electricity production falls as we no longer have imported energy in the market.

 

 

 

 

Up
3

He should do a deal to crank up Tekapo pumped storage.

"If there is a scope or need for pumped hydro storage
in New Zealand, it has already largely been built and tested on the Tekapo canal. All that is
technically required to make use of this existing asset is to buy pumps and install them in their prebuilt
locations at Tekapo A and B power stations. This could be accomplished in less than two years
at an estimated cost of less than NZ$100 million, and, assuming the completed pumped hydro
scheme would be operated coordinated with other adjacent generation assets, could provide backup,
firming and energy storage capacity for several hundred MW of new and future wind or solar
generation development. There are no technical barriers preventing the completion of the pumped
hydro scheme at the Tekapo canal and the comparatively small financial outlay required, would
make it one of the most cost-effective pumped hydro schemes realizable anywhere in the world."

https://www.scoop.co.nz/stories/PO2308/S00033/pumped-hydro-its-already-…

Up
2

Sounds like it would be a good peaking plant, but not a dry year solution. Once the water has gone down through Ohau, what are they going to pump up?

Up
4

Water from Pukaki. "Tekapo A Power Station generates electricity from water that passes through a 1.4 kilometre tunnel from Lake Takapō/Tekapo. The water then passes down the 26 kilometre Tekapo Canal and generates electricity through Tekapo B Power Station, located on the shores of Lake Pūkaki."

Up
0

Yes, then it carries on to go through the ohau scheme lower down. In a dry year, that water is limited, but not much point forsaking generation,  using power to pump it up, then getting less power to generate again. Unless your peaking.

Onslows advantage was it would be a huge amount of extra storage.

Up
3

Onslows disadvantage is that it is essentially an open loop whereas the Tekapo-Pukaki can operate as a more traditional closed loop pump storage system utilising Pukaki.

Lake Roxburgh is tiny compared to the Three Gorges Dam II Onslow so once that water goes down it is lost. Not to mention the evaporation losses and low rainfall at Onslow.

The main point is with a change in legislation Tekapo could be cranked up reasonably quickly and would be some good brownie points for Labour Lite and Luxinda.

Up
0

It is a non-starter to have significant extra storage added to Lake Tekapo as the upper reservoir of a pumped storage scheme - it would flood out Lake Tekapo township. This was pointed out in the comments following a recent article.

https://www.interest.co.nz/economy/129137/new-zealand%E2%80%99s-electri… 

Up
3

That time Earl pretended he didn't know what a closed loop is and purports the lie that running the Tekapo scheme as a battery would flood Tekapo. So desperate to prop up his Onslow scheme baby he resorts to reductio ad absurdum to disparage other pumped hydro schemes.

Up
0

No disparagement intended profile. Lake Tekapo as the upper reservoir of a pumped storage scheme might well have potential as a green peaker with restricted storage capacity. Pumped storage schemes of that type would be useful as alternatives to gas peakers and I hope they go ahead around the country. The Tekapo/Pukaki option could be the lowest cost and gets built first, if Genesis sees merit. Another potential location (Genesis again) is between Lake Taupo and Lake Rotoaira. But what Lake Tekapo can't do is store significant additional energy without impacting a whole town. Just half the storage capacity of the Onslow scheme added to Lake Tekapo would flood Lake Tekapo township, as was demonstrated in the reference. This applies independently of whether the scheme is viewed as open or closed loop. My present article wasn't a plug for the Lake Onslow scheme. It's just that we do need to get some form of dry year infrastructure, whatever it may be, somehow entered into the coming infrastructure priority list. It will be interesting to see if this comes about as part of cross-party infrastructure agreements - if they really happen!

Up
2

You continue to be disingenuous Earl. Onslow is far, far bigger than the dry year problem. Tekapo doesn't need to be anywhere near the scale of Onslow and certainly doesn't need to flood Tekapo per your bullshit assertion.

"At 5000GWh, Lake Onslow would be capable of storing about the same amount of energy as all the country’s existing hydro schemes combined. Enerlytica analyst John Kidd said the “sheer scale” of the proposed scheme had left the industry shell-shocked."

"The generation of 2.4% of installed capacity (i.e. 1,100 GWh) would be
sufficient to bring the hydro generation up from the minimum output in a
low rainfall year up into the normal operating range."

Up
0

However, "profile" wrote on August 11:

"But a simpler pumped storage system between Lake Tekapo and Lake Pukaki could provide over half Onslow’s dry-year storage with minimal construction cost – the two lakes were originally designed to do exactly that.".

Onslow's proposed energy storage capacity is 5 TWh, If 2.5 TWh of energy storage capacity is added to Lake Tekapo then the Tekapo township would be flooded - as was shown by the simple calculation in the reference.

That's just the way it is. The 5 TWh value required for dry year storage buffer was derived by NZ Battery on the basis of their analysis of many years of hydro lake inflow records.

Lake Tekapo is therefore not suited for the storage magnitudes required for dry years. Of course, that doesn't imply that Lake Onslow should be selected as the best dry year year solution - it's the most expensive option after all.

Depending on what Genesis does, it might well happen that a Tekapo / Pukaki pumped storage scheme is constructed along the lines of a green peaker. 

Anyway .. it's late and all this is far removed from the theme of the present article, so that's it from me.

 

 

Up
1

You continue to be disingenuous Earl. Onslow is 5TWh - the dry year problem is 1.1TWh. Onslow is 5x what is required. Not just an elephant but an white elephant. I challenge you to find anyone suggesting Tekapo should be flooded. You are trying to pretend a closed loop and an open loop (requiring massive storage) are the same thing. The state of academia in this country.

"In 2001, 2008 and 2012-13, hydro generation was below the normal range, but no more than 9% below the average. The extra generation required to bring hydro electricity production up to the normal range was only 1,071 GWh in 2001, 1,091 GWh in 2008 and 1,100 GWh in 2012 and 2013 combined. That quantifies the scale of the dry-year issue."

Up
0

Earl, I suspect, is not the disingenuous kind. 

But I have long regarded your good self as such - and not the Bernays approach; throw that which you are guilty of, at the other. 

Shipley, in my humble opinion, was a master of the genre. It is very obvious to spot, and inevitably emanates from someone wishing to peddle an angle; a skew; something some distance from fact. 

Up
1

Is anyone connected with the battery project speaking to the government? While they Gov.may not be prepared to perform an about face (though they have several times to date) those working on the project must have much useful advice to offer.....and theres always a chance that advice may find its way into the public sphere.

Up
2

The current govt has made it quite clear they won't listen to expert advice.

Up
15

They may not listen to expert advice but they do respond to poll pressure

Up
2

Doesn't the expert just need to take the right MP out for a fancy dinner? I think that's how it's done under this administration. 

Up
11

Plus a 50 k plus donation to the party.

Up
4

I'm interested in where the LNG idea came from. It seemed to arrive on the radar pretty suddenly. Was it the gas industry? The gentailers? I wouldn't think those drilling for gas would opt to introduce competition for themselves, though I suppose they know LNG costs more than their own product for the time being.

It's entirely possible some members of the battery project may have suggested it as a non-Onslow option to the minister? An LNG ship is essentially a type of battery.

LNG does have some interesting potential to keep the gas network and gas-fired generation operating until say a cutover to green hydrogen could replace it in 10-20 years maybe. Hydrogen seems a reasonable long-term battery option once we reach a point of excess renewable generation?

Up
2

MBIE did some analysis on it last year: https://www.mbie.govt.nz/dmsdocument/28343-nz-battery-future-of-gas-con…

The reason that the gas shortage has come up is that over the last 5 years, despite the partial ban, there has been a lot spent on exploration ($1.3 billion from 2020-2024), the expectation is that they would find some new gas, but not only did they not find any significant new gas, but they found there was less than their earlier estimates. It's unlikely that any of that exploration would have led to usable gas today as wells take a long time to develop, but the flow on effect is that the value of the remaining gas in our existing fields has increased dramatically as per supply/demand. Now LNG imports are competitive with spot gas prices.

Hydrogen may be the fuel of the future, but it is a mighty difficult one to work with. It is hard to store as the molecules are so small as to escape most containers. It is far more flammable than methane (the main component of natural gas), is prone to detonation, and when it burns, during daylight, the flames aren't visible to the naked eye. To liquefy it you need to get down to at least -240C, which is a lot harder than LNG at around -160C. It is also not a particularly efficient store of energy, at least with today's technology.

Up
4

Sure, but the overall impact I suppose is that the unit price of gas will rise quite a bit and make alternative gasses competitive at that higher price point. That in turn will ripple through considerations of gas vs electricity vs shut up shop for downstream users.

LNG isn't a particularly pretty option, doesn't help our balance of trade etc. But it allows the north island pipe networks to remain maintained reliably beyond the point where our fields run dry, to be repurposed for something else in the future.

Up
2

"a final solution to the dry year problem must come from some form of government-funded new infrastructure." 

Well that might be a temporary half baked solution. A serious person that considered actual physics in the energy predicament would first suggest stop digging the new demand hole deeper. Then we can work out where to conserve energy and how to maintain existing functional infrastructure through the coming fossil energy availibility collapse. Without acknowledging living in a country of finite size, on a similarly constrained planet, this government are just ideologically driven overpaid clowns! They have zero intention of transitioning to anything green. Same old evangelical deniers they have been for two decades+. 

Up
4

When I speak of distributed generation (home generation and batteries) someone pops up and claims some massive size of battery is needed to get through the dry years.

But the home battery system does not need to get through a whole winter, they just need to get through one night.

If your home system vastly reduces your demand at peak times, and net you contribute more power than you bring in the gate.  There is the solution.

But that disrupts the business model of big generation, and us small consumers on their hook.  Sadly Earl Bardsley seems locked into that big gen thinking.

Up
8

Only a third of electricity use in NZ is households....and those households will not function without the other 2/3 of energy users....it is an intertwined system that relies on (almost) all parts to function.

And home systems even with a couple of days battery capacity will not mitigate a prolonged dry period.

Up
5

For residential households to avoid paying for LNG peaker plant costs that the electricity market will incur (Gentailers will smear the costs into their connection and per unit fees) they could go off grid by using solar and lithium batteries to cover overnight demand. It would though mean installing enough solar panels to get through short winter days when consumption peaks (because it is colder and darker) and when solar production slumps (sunlight hours are less). That would mean in summer these residential systems would have more solar panels than needed but perhaps the economics still works out. 

There are reports that show if NZ households switch away from gas powered household appliances and fossil fuel powered vehicles and install solar and batteries then they would collectively save nearly $100bn in the next 15 years and individually they would save thousands of dollars per year depending on their financing costs (interest rates) they incur for the solar+ battery + electric vehicle purchases. So maybe the economics does work out?
An engineer's plan to rewire NZ and save money doing it - Newsroom

Up
4

National threw the baby out with the bathwater, classic idiotic move. Now scrambling to blame everyone else and no actual plan except "industry will solve it!" which it has failed to do for 30 years. 

All because short term policies driven by short term governments either beholden to special interest groups or looking through ideological lens'. 

One wishes we were led by more sensible people.

Up
11

'....Similarly, the present lack of sufficient renewable generation supposedly indicates some form of negative influence from previous considerations of the Lake Onslow pumped storage scheme.....'

No, the recent pause it was primarily the uncertainty around Tiwai.

Up
2

How hard would it be to build some sort of hydrogen creating factory that runs off renewable sources, convert Huntly to run off hydrogen?  

Up
0

Sure;y cheaper and easier to implement than building an LNG terminal?

Up
0

No, hydrogen is almost always the worst option.  You need to store hydrogen cryogenically to get any energy density, and it's a much nastier gas than natural gas. And the sheer inefficiency of producing it, compressing/chilling it then converting it back to useful energy, particularly by burning it to heat water and turn a turbine.  Not sure if a massive fuel cell array would be better or not.  They are more efficient, but they don't last forever and still not cheap.

Up
7

"Not sure if a massive fuel cell array would be better or not. "

They would be. Ask Japan.

Up
0

Please do some homework re energy.

Surplus Energy Economics | The home of the SEEDS economic model – Tim Morgan (wordpress.com)

Do the Math | Using physics and estimation to assess energy, growth, options—by Tom Murphy (ucsd.edu)

Energy cannot be created, and every tike you extract work from it, you degrade it. Eventually it ends up as low-grade heat - too low to use. Imaging a hot cup of coffee cooling, then trying to refill it with the heat which has escaped. Takes too much energym for the energy you'd get back. 

The crucial ratio is Energy Return on Energy Expended. All life, indeed all activities, have to be greater that a ration of 1:1. Modern society probably cannot be maintained below 11:1, some say 8:1. We are getting down there now - which is why we cannot afford to build stuff, or even maintain stuff (it's taking too much of the energy).

Hydrogen is not a source of energy - merely a vector (like a battery). The EROEI of making hydrogen from water, is too low to be bothered with, except for special purposes - like space travel. It was always a no-goer in NZ - we're better using the electricity direct (less loss). You aren't alone - a wide-eyed academic from Otago Uni swallowed the idea lock, stock and waffle - there was research money and perhaps kudos....

 

Up
3

Meridian and Contact (I think) were exploring this, as part of their anti-Onslow 'portfolio of options' smoke-screen. Now abandoned as not economical, according to the Meridian annual report this week.  

Up
3

Why would you use electricity to make hydrogen, and then use that hydrogen to make electiricty? Huge losses.  Just consume the electricity directly.  For smoothing out the daily/weekly up and downs of renewables we have hydro lakes and lithium batteries.

The problem at the moment is yearly up and downs, you're not gonna store enough generation to make up for a dry year in hydrogen.

Up
2

The advantage of Onslow was that it was a buyer of electricity when the price was low as opposed to LNG/Geothermal which are sellers then the price is low. Therefore, Onslow incentivises cheap intermittent generation whereas LNG/Geothermal discourage it. Unfortunately Onslow is done. If it’s was 2034 before its 2040 now.

The big risk to Onslow wasn’t all the bs of market instability spouted by meridian et al, it was super low battery prices. If extremely cheap stationary storage happened in the years to 2034, it would have undermined the business case for Onslow.

Now, having cancelled Onslow, we’ve bet all our chips on cheap batteries. National may not have been smart enough to realise what they were doing but that’s what we did. We better hope those cheap batteries arrive quick. There are some technologies like iron-air batteries that might pay off.

We probably need the LNG terminal as well. God knows how we’ll get out of LNG. It’s going to be expensive and all those households who converted to gas heating/cooking/water are in for a big shock. One thing is for sure, the government should absolutely not subsidise the terminal - LNG customers have to carry that one, not the tax payer.

Up
5

Good comment. 

I don't think National are smart enough - they merely reflect what votes for them. 

But I think they're panicking and looking increasingly out of their depth. 

It was a cunning ploy to use NZF/Jones as the hatchets; expendable dross. 

Up
2

As an incidental sideline, my mother received a letter from some government department in the mid-1980s informing her that they were interested in buying the mining rights to the coal seams under a Huntly-West lake.

All known descendants of her grandfather were tracked down by this government ministry and sent identical letters.  This came as a complete shock to my mother because she and the other descendants (her cousins) had no idea that their grandfather had even acquired these rights.  They knew he had a dairy farm in the general vicinity.  He apparently worked part-time or for stints in the local coal mines for a supplemental income when he was breaking in the farm.  He also, apparently, had something to do with the formation of the coal miners' union.  But along the way he must have bought those mining rights.

Anyway, all the current descendants including my mother agreed to sell and she eventually received a cheque from the government for around $6,500 being her proportionate share.

I'd be interested to know if the government ever utilized those rights they had acquired.  My guess would be that they never did.

I have heard it said that NZ coal is not good enough for the likes of the Huntly originally-coal-fired power station, hence the need for the subsequent importation of higher quality Indonesian coal.

 

Up
0

Other way around , Huntly high quality.  Indonesian , dirty, but cheap . 

Up
2

Yes, you could very well be right.  That would be the reason that those coal seams under the lake were probably never mined:  too expensive !  I guess that was never taken into account when the government paid the family for the rights:  plans can turn on a dime as they say.

I've just read ASB Securities' Morningstar's current share recommendation on Genesis and they say that Genesis has been relying on "expensive coal", which has adversely affected their profitability, but it doesn't mention where that coal is coming from.  So, I guess that means the use of coal in power generation is overly expensive even if it is, as you say, dirty and 'cheap'.

Up
1

Probably handling costs, and carbon credits that make it expensive.

The good news,  coal is at zero this morning,  plenty of wind and rain.

Up
2

From memory, carbon credits roughly double the price of energy produced from coal. May be a little lower now as the carbon price has fallen. 

Up
3

Turn Onslow into a power station by putting solar on it and around it 

Then it will be built, we need more generation as well as then every hydro station becomes a battery.

Scope was too narrow so of course it is a political football from both sides. 

Up
0

It would end up going into the grid, and Benmore/Haywards is the transit. 

So anywhere along that transit, would work. Proximity to Onslow is a red herring. The best solar gain, closest to a main trunk cable, is the target. That means Southland clag isn't ideal, and away from diurnal cloud and morning fogs (inland, but not in a basin) would be factors too. 

I play the same game in miniature, running my micro-hydro as low in the run as I can place it, but as close to the house too. Head, meet line-loss...In my case, PV is complementary with hydro. Generally, that should scale. 

Up
2

Yes but the water is sitting on land that is already bought and paid for.

The best place for solar is on a battery and where costs other than the panels themselves can be minimised by economies of scale or production lines (solar roofs on vehicles) and obviously a free site to put them.

Panel costs have plummeted so the clag problem is offset by just installing more panels that cost next to nothing in the system you are already building connected to the grid you have already connected to on the land that you already own.

There will be other distributed solar around the place. The point is that Onslow was marketed as the only battery we need for a dry year, and that was dumb.

This is not the only solar we need. Its just cheaper to do it there. Dont look a gift horse in the mouth.

 

Up
0

It's still best as a nation, to put them in the best sun (factoring-in grid proximity; the graphs will cross). Same with wind, best on the windiest sites, but factoring in grid proximity too. For instance, Puysegur Point ticks the first, but not the second...

Although they will decay faster, of course - the cloud-bound ones will live longer....

I'm on the NW face of a hill, so optimise both the house (passive solar) and the panels, about an hour after midday. About a K from the coast, but the hill precludes most clag. I spent a year watching things, before siting. 

But beyond one PV lifetime, we're into a different paradigm. Local, powered-down, much simpler. I suspect we'll be making old-school windmills (from old vehicles, probably) direct-driving things, and living at the whims of the wind (like Hayes in Oturehua, a few decades ago). And using direct solar for house and water-heating, fighting over firewood, learning about topsoil retention. Life beyond Haber Bosch will be a tad interesting...

 

Up
0

Love the comment so far. Pretty much everyone misses the root cause.

So what is the root cause?

Financials !!!

Not the science. Not LPG vs. Renewables vs. Nuclear vs. Solar vs. whatever.

Not 'batteries' either. Our hydro dams are massive batteries.

The real issue is purely Financial. Let me explain ...

The gentailers all own massive hydro. Hydro produces heaps and heaps of energy at a very low cost. Thus the gentailers use it, as often as they can, to produce 'base loads'.

By doing this, the existing hydro's value as batteries is dramatically reduced. A bit like - instead of putting money into a savings account for bad times, instead they spend it as soon as it comes in.

So the inevitable happens many times a year - not just dry years - we have under supply and the price spikes. To continue with the savings account analogy, We simply don't have enough money in the saving account, have no credit card, and suddenly there is a shortage. The price spikes, and then become a reason for the price to stay high. You know, because it needs to stay high to encourage more production, i.e. investment in more generation.

Thus, the gentailers by using their assets - that the NZ taxpayer paid for - gets to control both the supply (because hydro costs them very little but the profits are huge) and the price to ensure their shareholders get their god given right to 'tax' consumers for their own selfish benefits.

Now is an extremely good time for a taxpayer funded scheme to enter the supply market to stop this rort. And damn it, battery schemes are an exceptionally good way to do it. For example, Lake Hounslow would have bought electricity when it was cheap and provided it when it became expensive. A perfect price smoothing mechanism that encouraged a growing and stable supply, while being the savings account for when the sticky brown stuff hits the whirly thing.

Buying back the hydro dams, or a few, would be possible price smoothing scheme. As would building more. As would Lake Hounslow.

But no. Lets argue about the science. Gentailers must love reading such comments. (And their shareholders love it even more!)

Up
0