Pumped Hydro: Extended Comment by Prof Bardsley

Guest Post by Associate Professor Earl Bardsley. Paper written in response to the following question from the Ministry of Business, Innovation and Employment (MBIE). Shared with permission.

Lake Onslow

Question: What is the best way to meet resource adequacy needs as we transition away from fossil fueled electricity generation and towards a system dominated by renewables?


I would like to suggest a multi-faceted study, including community involvement, to be carried out for a possible pumped storage scheme in Central Otago, using Lake Onslow as the upper reservoir. A single 5 TWh pumped storage scheme at Onslow could enable an end to all coal use in New Zealand for industrial heat and power generation, provide resilience of electricity supply for accelerated electrification, produce net power gain to the national grid, provide buffering to enable 2,400 MW of new wind generation capacity, and create downward pressure on electricity prices.


The current (February 2020) situation is that following the ICCC (1) report’s recommendation for pumped storage investigation in New Zealand, the Government Response (2) was that Cabinet would be notified by the end of 2019 as to suitable agencies who could carry out the task. Whether this resulted in investigations of specific sites had not been made public at the time of this submission.

An in-depth study of pumped storage possibilities in New Zealand is overdue, taking into account the intended shift to more renewables and our ongoing vulnerability to dry year risk (3). We presently lag behind Australia, where the Government has association with pumped storage (4), research funding explicitly includes pumped storage (5), and discovering good pumped storage sites can be a cause for celebration (6).

New Zealand Engineers (7) have been advocates of large-scale pumped storage as one of the components to aid transition toward reduced carbon emission. Unfortunately, at New Zealand Government level there has been an element of diversion into an unrealistic belief that hydrogen might play a significant role in seasonal energy storage (8). Also, rather than support research on better application of existing energy technology, the current $50 million Advanced Energy Technology Platform is restricted to research proposals that will “have the potential to radically shift the global energy landscape”. It may be that something akin to practical cold fusion will be discovered in a New Zealand university basement. However, and with no disrespect to my Engineering colleagues, it is more likely that nothing of note will emerge after seven years when the funding ends. By then, the Australians will have completed their $5 billion Snowy 2.0 pumped storage scheme in support of increased use of renewables there (9).

As part of the New Zealand Government Response (2) to the ICCC recommendation for pumped storage investigations, it was noted that a major energy storage scheme would involve flooding a large extent of land. There is therefore need to consider environmental, social, and cultural implications — not just technical and economic. However, public consultation requires specifics of a given scheme in order to gain a sense of environmental impact and serve as starting point for discussions.

The main purpose of this submission is therefore to give some detail of a purely hypothetical pumped storage scheme at Onslow, although any actual scheme would have similarities.

The potential of the Onslow Basin for pumped storage was first noted by this author in 2005 (10). A number of simulation studies were subsequently carried out as part of a 2019 PhD thesis study at the University of Waikato (11). No external funding was received. In addition to the University of Waikato studies, the ICCC report (1) incorporated a preliminary overview of Onslow pumped storage for a scheme with 5 TWh of energy storage capacity.

The energy storage potential of the Onslow basin is huge, resulting from a fortunate combination of topography, hydrology, and geology. Given an Onslow scheme with 5 TWh of storage, this would be 14 times larger than the Snowy 2.0 scheme. Put another way, the world’s largest battery (in South Australia) would have to be replicated 38,000 times to give the same energy storage. Developed to its fullest extent, the Onslow Basin would represent much of the total world’s energy held as pumped storage. Energy storage capacity could be increased even further by including the nearby Manorburn basin (10), though this is not a great amount of energy gain and would be at the expense of increased evaporation loss and extent of flooded land.


To give an indicative picture of the appearance and operation of pumped storage at Onslow, a hypothetical scheme is described here. Storage capacity is 5 TWh, with 1,200 MW of installed pump /generating capacity — say 10 machines of 120 MW each. This extent of energy storage would more than double the national hydro storage capacity. Water would be moved to and from an expanded Lake Onslow through a 24 kilometre rock tunnel connecting to Lake Roxburgh, with a maximum tunnel flow of 200 cubic metres per second.

For construction, the existing Onslow reservoir is first raised from its present 700 metres above sea level (8 square kilometres of lake surface area), up to a new minimum level of 730 metres (45 square kilometres of lake surface). This filling process is a one-off energy expenditure of 2 TWh and would require a year or more because pumping would be discontinuous, depending on electricity prices.

The enhanced energy storage capacity is achieved by a large permitted vertical water level range of 50 metres, with the maximum water level at 780 metres elevation (lake surface area 70 square kilometres). The extent of the new lake at various levels can be visualised by zooming in to the Lake Onslow region using the online New Zealand topographic map (12).

The operating range is essentially for dry year buffer and there is no implication of a seasonal range of this extent. An operating range of this magnitude would nonetheless appear to be environmentally irresponsible in the extreme. For example, the Lake Tekapo operating range is about 9 metres. Even this range for Lake Tekapo is questionable in terms of environmental impact, as an internet search for images of “Lake Tekapo low level” will show.

There is, however, a significant difference between the Lake Onslow operating environment and that of controlled former natural lakes like Tekapo, Pukaki and Hawea. These hydro lakes have shorelines of soft erosion-prone glacial till and lowered water levels expose extensive silt flats or gravel regions. In contrast, the water of the new Lake Onslow would always be lapping against schist rock over the entire 730–780 metre range. The impression would be something like parts of the Cromwell Gorge rock sides extending into Lake Dunstan, except that the Onslow rock slopes would generally be gentle.

A necessary environmental requirement here would be that all 25 square kilometres of land within the operating range would first have the present thin soil cover cleaned away. Otherwise there would be dust generated at the times when lake levels are lowered and the wetted soils dry out. The resulting extensive schist rock landscape would have its own attraction and around-lake cycle tracks at various levels could be popular for recreation, similar to the Lake Dunstan and Roxburgh Gorge trails.

With respect to creating the initial 45 square kilometre lake, there would be flooding of extensive areas of pastoral land and also of about 8 square kilometres of existing wetlands at the southern end of the present Lake Onslow (Fortification Creek, Teviot River south branch and Middle Swamp). Some financial settlement with the few existing landowners would be a necessity of course, should the scheme ever happen.

From the wetland aspect, when billions of dollars are being spend on a large civil engineering project then that is the time to argue for millions spent on ecological improvements beyond the present situation. For example, the Lake Onslow region might be surrounded by a predator-proof fence as protection for the wetland bird population. Also, 16 square kilometres of the new lake could be set aside for a constructed floating wetland with intricate waterways amenable to eco-tourist ventures. The new wetland would offset the loss of both the southern wetlands and also the Dismal Swamp wetlands that were drowned when creating the present Onslow reservoir. A demonstration square kilometre of floating wetland could be established on Lake Onslow, giving a feel for how the final wetland would appear.

The completed picture of the new Lake Onslow could therefore be one of a large lake with extensive wetlands, located within a surround of craggy Central Otago schist rock.

There are many other aspects that would need to be considered as part of environmental and social evaluations, including lake access for boating and possible effects on trout spawning streams. It could happen that the new lake creates even better trout fishing conditions in terms of both size and abundance. For example, the artificial Lake Otomangakau in the Tongariro Power Scheme still enjoys a reputation for excellent trout fishing.

The other visible environmental factor would be the earth dam at the Teviot River outlet of Lake Onslow. This will be a little greater than 80 metres in height at the river itself, given a lake with a 780 metre maximum elevation above sea level. However, the small Teviot River at the lake outlet in no way resembles a major river valley like the Waitaki at Benmore Dam. It would be necessary for the Onslow dam to extend over a few kilometres. However, for much of this length it would be low dam that could be contoured and vegetated to merge with the surrounding landscape.

A construction-related environmental factor would be what to do with the tunnel excavation spoil. For the channel tunnel, a coastal park was created on the British side. Similarly, the schist tunnel spoil might be used to create flood-free linear parklands along the east bank of the Clutha River between the Roxburgh Dam and the town.

With respect to local tectonics, there would need to be checks made against the possibility of induced seismicity from water loading. In this regard, it is encouraging that the filling of Lakes Roxburgh and Dunstan have had no evident seismic effects in the form of induced small earthquakes.


The hydrological impact of Onslow operations would be minimal, given a maximum tunnel flow of 200 cubic metres per second. The reason is that power generated from water released into Lake Roxburgh will generally be required in winter, when the Clutha River flow will be below average. Conversely, pumping is most likely to happen when power prices are lowest, which will generally correspond to above-average Clutha flows. That is, Onslow pumped storage will result in Clutha low flows being a little higher and high flows being a little lower. For high flows, this would have the effect of a small reduction in Clutha flood peak discharge at Balclutha.

Onslow operation would not involve permanent diversion of water away from the Clutha River. Apart from the initial water fill and some evaporation loss, all water pumped to Lake Onslow is later returned to Lake Roxburgh. In this respect, storing water in Lake Onslow is no different to storing water in Lake Dunstan. The only change is that the various streams within the Onslow catchment would now meet Clutha water at Lake Onslow.

Teviot River flow would not be affected by Onslow operations because a requirement would be that the Teviot discharge remains unchanged from the present.

If constructed, Onslow pumped storage at maximum efficiency would result in modified seasonal river flow regimes for the Waitaki River, and also the Clutha River to a lesser extent. This arises because there would be no point in pumping water up to Lake Onslow storage and then holding it as a static water volume until the next dry year. In this static mode there would be ongoing loss of about 5 MW for pumping to offset evaporation loss to maintain Teviot River mean discharge. Instead, the most efficient use of Onslow storage would be buffering wind generation on an intra-day basis and also, importantly, active seasonal operation coupled with seasonal operation the main South Island hydro lakes, particularly Tekapo, Pukaki, and Hawea.

Presently, the South Island hydro lakes gain most of their water from high spring and summer inflows, stored to be released later for winter power generation when electricity demand is high and winter inflows are low. That is, the lakes are managed to have high water levels toward the end of summer. However, if unexpected major flood inflows enter already-full hydro lakes then lake spills occur, leading to spill at hydro stations downstream. For example, lake spill from Lake Tekapo represents spill from the bypassed Waitaki power stations: Tekapo A, Tekapo B, Ohau A, Ohau B, and Ohau C, as occurred in December 2019 to January 2020.

Lake spills are infrequent and are of no great environmental significance unless there is downstream flood damage. However, spill represents lost generating opportunity and is thus an energy source. For example, over 2009–12 there was about 5 TWh lost to spill in the Waitaki scheme. Such losses could be significantly reduced when there is coupling with Onslow pumped storage operating in seasonal mode. That is, summer inflows to the hydro lakes are now mostly released downstream to generate surplus power above demand. This power is used to pump Lake Roxburgh water up to Lake Onslow, to be utilised later in winter by running the water back. Because the existing hydro lakes will then not be used to the same extent for seasonal storage, their frequencies of high levels are reduced and there is capacity to hold flood inflows when they do occur, thus reducing spill and energy loss.

For this operating mode to apply, there would need to be summer water releases from the hydro lakes in all years, because major flood inflows cannot be anticipated very far in advance. Most years are spillfree and so for most years the Onslow scheme would be an energy sink. This is because the pumped storage round trip efficiency will probably be around 75%. However, even allowing for both this and evaporation loss, our simulations indicate the long-term energy gained from spill reduction creates a net positive result. The overall time-averaged effect of seasonal pumped storage operation at Onslow would therefore be to provide a net power gain to the grid rather than being an energy sink. The market mechanisms of achieving the seasonal integration are left open. It could happen that the present market is sufficient, or possibly a slight change may be required to the Electricity Authority’s Code allowing for pumped storage demand to be dispatched.

The hydrological environmental gain from the new seasonal lake management would be seen as reduced periods of high water levels in the South Island hydro lakes. This in turn means less wind-wave erosion of the soft-sediment shorelines of those scenic lakes. At the other extreme of low hydro lake levels, water would now be drawn down instead at Onslow with its bedrock shorelines, rather than the present situation of unsightly low scenic lakes in dry periods.

The regional hydrological improvement from new seasonal management also extends to some rivers. In particular, the summer flows of the Hawea and lower Waitaki Rivers would be higher and more suited to recreational activities. Those river flows thus move back more toward their original pre-hydro seasonal flow regimes with water flows high in summer and low in winter.


There are two power generators that would be directly affected by Onslow pumped storage. Pioneer Generation operate a cascade of small hydro power stations on the Teviot River below Lake Onslow, while Contact Energy operate the Clyde and Roxburgh dams and use Lake Hawea as their main controlled hydro storage.

The impact on Pioneer operation would be minimal because there would be an environmental requirement to maintain the flow of the Teviot River. It may be possible for Pioneer to negotiate greater winter flows from an expanded Lake Onslow, gaining some financial advantage from higher winter electricity prices.

As the operator of the Clutha hydro scheme, it would seem a requirement that Contact Energy should be a partner in constructing pumped storage at Onslow. At times of high Clutha flow and low electricity prices it would be helpful commercially for Contact to be able to pump from Lake Roxburgh. Sometimes such pumping operation will reduce or avoid spill at the Roxburgh station, thus reducing lost generating opportunity. As mentioned earlier, Lake Hawea could be operated at a lower average level. This would reduce spill at both the Roxburgh and Clyde stations. In the 4.5 years prior to this submission, Onslow in operation would have saved Contact Energy at least 0.7 TWh of lost generation opportunity on the Clutha.

It may also be possible for Contact and Wanaka township residents to engage in a win-win development at the Clutha outlet at Lake Wanaka. Wanaka lake levels are presently uncontrolled and protected by statute. However, there is a disadvantage to this in that high inflows over a period can exceed the natural outflows and lake water can rise into parts of the town, as happened in December 2019.

A change would be required to the Wanaka Preservation Act, but engineering the Wanaka outlet to enable greater discharge when required would reduce the frequency of shoreline floods. The permitted lake level control would only be within the narrow normal water level range so there would be no evident shoreline change. However, slightly lowering the lake before flood inflows would spread the flood impact over a longer period and so reduce the lake level maximum rise. Reduced peak Wanaka outflows would reduce spill at the Clyde and Roxburgh stations, with the excess power used to pump to Lake Onslow. In normal times, Contact would be able to use within-day controlled outflows from Wanaka to better match hourly power demand variation.


Following recommendations of the ICCC report (1), the national strategy for carbon dioxide emissions reduction is to move toward accelerated electrification and away from fossil fuels, as part of our signing of the Paris Agreement. This would include switching to EV use and replacing coal and gas with electricity for industrial heating. Some of the electrification of transport might be via the intermediary use of hydrogen for heavy vehicles and perhaps even for power in some trains.

In addition, there remains an aspirational goal to have 100% renewables-based power generation by 2035 in a normal hydrological year.

Concurrent with the renewable electricity transition, there is a need for reliability of supply and also power prices not rising so as to deter making the transition.

With respect to the 100% renewable power generation in a normal hydrological year, that is not a practical goal that should even be “aspired” to because it implies that generating plant and specialised staff do nothing in every normal year. A better aspiration is for 100% renewable power in all years. This means closure of gas peakers and, in particular, closure of the Huntly station and ending its role of using coal and gas in seasonal hydro firming and dry year backup.

Genesis Energy has cited “five Taupo lakes” (13) as the additional New Zealand energy storage capacity that would be needed if Huntly was retired. This translates to approximately 4.3 TWh, which is less than the 5TWh new storage capacity proposed here for Onslow. In addition, the Onslow scheme as proposed has a further 2 TWh to total drawdown. However, for environmental reasons this would only be used in the rare instance of a dire national climate emergency. As part of daily operations, Onslow might also act as a substitute for gas peaking, though this may be better handled by some smaller pump storage schemes in the North Island, or perhaps through purchasing suitably large batteries.

Onslow pumped storage could aid emission reduction in an indirect way also. Extensive future wind power developments are seen as an important part of the New Zealand transition to renewables, helping to meet additional future power demands arising from accelerated electrification. However, there comes a point when further wind power development may lead to grid instabilities. The 1,200 MW installed capacity at Onslow could provide a useful role here by providing buffering for a further 2,400 MW of new wind generating capacity, of which at least 1,200 MW would be in the South Island. This reinforces that Onslow is not simply static water storage held at high elevation against a future dry year. If would in fact be in continuous operation to buffer wind power fluctuations, as well in operation for seasonal use as mentioned earlier.

With respect to a “just” transition to renewables and reasonable electricity prices, Onslow would certainly have significant one-off construction costs, perhaps 4 billion dollars. However, large-scale Onslow energy storage can be anticipated to have a permanent downward influence on what would otherwise be high electricity prices. This arises from the general tendency for high water levels in the present hydro lakes to be associated with low wholesale electricity prices. Maintaining 1,200 MW of dispatchable power from significant additional storage would therefore have a long-term lowering effect on prices.

Lowered wholesale electricity prices will not necessarily be welcomed universally. It is not beyond possibility, for example, that the significant civil engineering of the Onslow scheme is supported by environmental groups as a major step toward eliminating our carbon dioxide emissions. But at the same time, there might be opposition from some generators who see disadvantage in reduced selling prices for their product.

The reduced electricity price scenario differs from the ICCC (1) conclusion that converting to the last few percent of 100% renewable power would be costly. The argument was based on an expensive “overbuild” of renewable resources such that for much of the time going into the future, there would be generating capacity unused (except perhaps in the unlikely event of producing green hydrogen for export). With Onslow pumped storage energy capacity at 5 TWh there is no need for overbuild to achieve renewables-based seasonal firming.

Related to this is the use of Onslow as an international exemplar for the transition to renewables. Many nations will be facing similar issues with regard to both pricing and resilience of power supply. In this regard, it is best they seek large Onslow-type high rock basins rather than construct smaller schemes that can only buffer against relatively short weather-related fluctuations in renewable power output. For example, Australia’s Snowy 2.0 scheme has generating capacity of 2,000 MW, but only sustainable for a week. In contrast, 5 TWh of Onslow storage translates to 1,200 MW power output that is sustainable for almost 6 months.


Onslow energy storage and the locations of power demand are at opposite ends of the country, giving rise to concerns over sufficient transmission ability to move power north when needed. There is in fact not a great deal of transmission upgrade required for Onslow buffering against a South Island hydro dry period. This is because at such times there will only be relatively small power output from the Waitaki and Clutha schemes, giving spare capacity over much of the length of the existing South Island lines. There is already a plan to upgrade the circuit from Roxbugh through Naseby to Livingstone to relieve the present lower South Island constraint. This work alone would enable almost full operation of the proposed Onslow generation. This is because full Onslow generation would only be required when there is minimum output from Manapouri, Roxbugh, and Clyde power stations, the very stations that at present cause the constraint to bind.

Other transmission line upgrades may be likely, given the closure potential of the Tiwai Point aluminium smelter.


There have been some cursory previous economic examinations of Onslow pumped storage. However, there has never been a detailed economic examination which also takes climate change effects into account. It is unfortunate that the $ 8 billion infrastructure spend announced in January did not include funding for a full economic/social evaluation Onslow development possibilities. This would have helped offset a North Island bias in the funding distribution.

Quantifiable Onslow costs would be concerned with land purchases and the main scheme construction components: tunnel building, dam construction, and generating plant. Quantifiable benefits are the enabling of 2,400 MW of new wind power generating capacity, increased summer flows in the Lower Waitaki for irrigation developments, some net hydro power gain, and reduced flood peaks in the Waitaki and Clutha Rivers. There is also the economic gain of cheaper electricity to aid competiveness of electricity-intensive exports like pulp and paper. For a number of years there would be development and employment opportunities around Roxburgh as part of construction activity, perhaps to be followed later by eco- and engineering tourism.

There are also benefits that are not so readily quantifiable in economic measure, including higher recreational summer flows in the Hawea and Waitaki Rivers, reduced seasonal fluctuation at the shorelines of the scenic hydro lakes of the South island and, importantly, laying the basis for transition to a low-emissions economy as far as carbon dioxide is concerned.

It was noted in the Government Response (2) that the expense of pumped storage schemes would make it unlikely that they could be built without government input. This applies in particular to a scheme as large as Onslow. However, this also means that the government is not “crowding out” private investment opportunity. If pumped storage at Onslow were to be constructed it would presumably be some form of public / private partnership. The scheme could be built in stages with stage 1 being the tunnel, first 30 m of dam height, and first 4 generators installed. The next 30 m of dam height and next 3 generators would comprise stage 2. Stage 3 would be the last 20 m of dam height and last 3 generators. In this way, construction and cost could be spread over some 15 years.


This submission has been concerned with the possibility of Onslow pumped storage, essentially as seasonal and dry year buffer, and in support of wind power. However, some combination of small-scale pumped storage and battery technology might also replace gas peaker stations. Such initiatives would be concerned with a few hundred MW of power released over short time periods. For example, Lake Moawhango in the Tongariro Power Scheme could serve as a lower reservoir, with the upper reservoir being a new small lake in the upper Moawhango valley. This would be subject of course to all cultural and ecological considerations.


Onslow pumped storage has sometimes been dismissed in the past as potentially useful but unlikely in reality because of probable significant community and environmental opposition. In fact, it would be doubtful if development could proceed without significant support both from local communities and national environmental groups. The comments presented here are therefore not aimed to advocate pumped storage at Onslow as such, but hopefully to generate sufficient interest that a detailed study can be undertaken with full opportunity for community input as a proper gauge of public opinion.

One certainty is there can be no small Onslow scheme, because the investment of drilling a 24-kilometre rock tunnel would require significant energy storage at the other end to make the cost worthwhile. The New Zealand energy situation is therefore at a crossroads at present, because an energy future with Onslow pumped storage will be very different to one without.


(1) Interim Climate Change Committee (2019). Accelerated Electrification. Evidence, analysis and recommendations.

(2) Ministry of Business, Innovation & Employment (2019). Proposed response to Interim Climate Change Committee recommendations on accelerated electrification.

(3) Transpower (2018). Te Mauri Hiko Energy Futures. Transpower White Paper.

(4) Government Priorities (2019). https://www.energy.gov.au/government-priorities/energy-supply/pumped-hydro-and-snowy-20

(5) Government of South Australia (2019). http://www.energymining.sa.gov.au/clean_energy_transition/grid_scale_storage_fund

(6) Australian Water (2018). https://watersource.awa.asn.au/technology/innovation/pumped-hydro-research-bags-anuacademics-eureka-prize/

(7) Newsroom (2018). https://www.newsroom.co.nz/2018/11/22/332986/engineers-name-10-climate-priorities

(8) New Zealand Government (2019). A Vision for Hydrogen in New Zealand. Green Paper.

(9) Snowyhydro (2019). Snowy 2.0. https://www.snowyhydro.com.au/our-scheme/snowy20/

(10) Bardsley, W.E. (2005). Note on the pumped storage potential of the Onslow-Manorburn depression, New Zealand. Journal of Hydrology (NZ) 44, 131–135. https://researchcommons.waikato.ac.nz/handle/10289/2702 9

(11) Majeed, M.K. (2019). Evaluating the potential for a multi-use seasonal pumped storage scheme in New Zealand’s South Island. University of Waikato PhD thesis. https://www.dropbox.com/s/z2zaidfwa0482m1/Majeed%20thesis%20final%20version.pdf?dl=0

(12) LINZ. NZ topo map. http://www.topomap.co.nz/ (13) Stuff (2019). https://www.stuff.co.nz/business/112551375/moving-to-100pc-renewable-generation-could-wait-tothe-2040s-genesis-boss-suggests Earl Bardsley, Science & Engineering, University of Waikato March 2, 2020 Comment on Accelerating renewable energy and energy efficiency MBIE report, December 2019



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When cities erect barriers that make it harder to build houses, I think this is landowners lobbying lawmakers so they can earn without toil.