$30m investigating white elephant

The government is spending $30 million investigating a white elephant:

The government is spending $30 million on an investigation into renewable energy projects including a hydro scheme at Lake Onslow in Central Otago which would solve the problem of dry years and the irregular supply of renewable energy sources. . . 

Engineer Dr Dougal McQueen said multiple smaller schemes would work better.

“If we don’t have the need for a dry-year storage, and we’ve invested in it, then of course it’s going to become the white elephant in the room and the Onslow scheme isn’t where the need is, which is in the North Island.”

Generating electricity closer to where it will be used would be a much greener option because it would reduce the amount that is wasted in transmission over large distances.

Sustainable Energy Forum spokesman Steve Goldthorpe said it’s great more renewable energy is being investigated but the scope of the Lake Onslow scheme doesn’t make sense.

“Storing water just for use on occasion, two or three times a year at most, seems to be an awful lot of expense for little return, so using it for that sort of battery capacity seems a little unusual.”

“Using Huntly Power Station as a back-up and for emergencies could make more sense rather than it competing in the market, but the government needs to work out the cost per tonne of CO2 emission reduction,” he said. . . 

It also needs to look at the way the transmission costs are averaged over the country which distorts the price.

If consumers paid the true cost of transmission, it would be much cheaper in the south and more expensive in the north. That could be a significant factor in decisions on locating industry.

National’s energy and resources spokesman Jonathan Young said the Productivity Commission looked into the Lake Onslow idea in 2018 but found it didn’t make sense economically and found the project would struggle to get through the resource consent process.

He agreed there were better options.

“There’s a lot more scope for geo-thermal to be developed and if we had that in the central plateau region we would be closer to the demand which will make it more affordable for the consumers who won’t have to pay huge transmission costs from the bottom of the South Island.”

The government’s claim the hydro project would reduce electricity costs don’t stack up, Young said.

“If we are going to spend $4 billion on our electricity system, then someone is going to pay for it. If it’s not going to come from higher electricity prices then it will come from the taxpayer.” . .

Taxpayers are consumers, either way we can’t afford $30m of borrowed money to investigate a white elephant.