Nats ‘can’t terminate Onslow scheme’

The Government cannot permanently kill off the Lake Onslow power scheme, which is likely to come into consideration again by a future Labour-Green government, according to the academic who first proposed its development.

Waikato University professor Earl Bardsley said that he still believed the power scheme would prove the most cost-effective way to address the country’s “dry year” problem, following the phase-out of coal and gas electricity generation.

Energy Minister Simeon Brown announced on Sunday that he had “scrapped” the power scheme, with all work on it ceasing and “decommissioning set to begin”. “On top of its $16 billion price tag, the Lake Onslow scheme would run into likely issues with consenting and it wouldn’t be delivered for at least another decade,” he said.

Despite the reference to the scheme being scrapped, the former government had not made a decision whether to build the pumped hydro power plant, which had not been expected to come online before the mid 2030s if it got the green light.

Bardsley said National had opposed Lake Onslow before its costs became clear, accusing the party of being “in the pockets of the gentailers” which lobbied against the development and being worried about what the investigations might show. “If you are selling hydro power at the selling price of coal power, you for sure wouldn't want a change in the electricity market.”

He said that when the government changed, he first thought that would “be the end of Onslow”. “However, if you think of a 10-year build and 100-plus years of operational life, a three-year setback is not a lot for a scheme that would play a significant energy role for the rest of the century.”

Labour energy spokesperson Megan Woods said it was too early to say if a future Labour government might revive investigations into Onslow. As part of its NZ Battery Project, the Ministry of Business, Innovation and Employment (MBIE) had been investigating whether a pumped hydro scheme was the best option to ensure sufficient power during “dry years”.