Clutha Consortium Explores Lake Onslow Hydro Scheme Revival

Plans for a pumped hydro scheme at Lake Onslow are being reconsidered by the Clutha Pumped Hydro Consortium (CPHC), as revealed in a confidential letter to landowners in the Teviot Valley. The letter, sent by Ken Smales, a representative of the consortium, indicates that inquiries are underway to gauge local interest in the project following the withdrawal of the Ministry of Business, Innovation and Employment (MBIE) from the initiative. While CPHC does not expect unanimous support, it has stated that a lack of interest would lead to the project’s abandonment.

Mr. Smales, a former executive at Meridian Energy, confirmed his role in the consortium but declined to provide further details. The concept of the pumped hydro battery project originated from Associate Professor Earl Bardsley of Waikato University in 2002 and has been periodically revisited since. In 2020, the Labour government allocated $30 million to study the viability of various renewable energy storage solutions, with the Lake Onslow project identified as a potential option.

The proposed scheme aims to pump water uphill during periods of low electricity prices, storing it for later use when demand peaks at Lake Roxburgh. However, the National government halted investigations into the project in December 2023, citing a projected cost of $16 billion and potential consenting issues. Then Energy Minister Simeon Brown stated that the scheme would not deliver results for at least another decade.

Beaumont Station, owned by Richard and Abby Hore, would face significant impacts if the project proceeds. Mr. Hore expressed a willingness to consider the consortium’s proposal but refrained from commenting on any direct approach. He criticized the previous government’s handling of the investigations, stating, “People walked all over our land and drilled holes. There was nothing for us, nothing for the valley.”

According to the consortium’s letter, three of its four directors have held leadership roles in public companies and possess extensive experience in the energy sector. All but one were born in Otago, with the fourth having spent considerable time in the region. The consortium aims to engage with landowners positively, offering shareholdings in the project if desired.

Prof. Bardsley argues that the Lake Onslow scheme may be the only feasible option for New Zealand’s energy future. He contends that previous reasons for rejecting the project were misleading. “Long-term, the critical thing for the New Zealand economy is to have low-cost and reliable electricity, including through dry years,” he stated, emphasizing the need for renewable energy solutions.

He noted that other potential sites near Lake Taupo had been investigated but ultimately dismissed. Prof. Bardsley believes that a pumped hydro scheme is essential for stabilizing electricity prices, which have a direct impact on economic growth. “You can’t grow the economy when you have expensive electricity,” he remarked.

The earlier decision to discontinue the Lake Onslow initiative was influenced by claims that it would deter investment in generation projects. However, Prof. Bardsley points out that investment in energy generation continued throughout the study period. He asserts that the Onslow scheme would utilize renewable energy to pump water from the Clutha River to the lake, later generating power when needed.

He concludes, “It is hard to see this being achieved without the Lake Onslow scheme.” As discussions continue, the outcome of this renewed interest in the project remains to be seen, with significant implications for New Zealand’s energy landscape.