Lake Onslow: $16 billion cloud hanging over energy system
Households and businesses should brace themselves for higher energy prices over the next decade following news that the Government will proceed with the next phase of the NZ Battery project, warns Energy Resources Aotearoa.
Energy Resources Aotearoa Chief Executive John Carnegie says:
“This decade we need to see historic levels of new investment in the energy sector – including large-scale electricity generation; natural gas generation and storage; renewable gas and biomass; and demand response. That investment is harder to justify while the prospect of Lake Onslow hangs over the sector.
“The idea of a Government-owned, taxpayer-funded behemoth dominating the market is bad for business and households.
“Proceeding with the next phase of the NZ Battery project creates at least another year of uncertainty, and possibly over a decade if Lake Onslow proceeds. Uncertainty means less energy and higher prices.”
Carnegie says that separate independent reports commissioned by electricity retailers and the natural gas sector have shown that there are more cost-efficient pathways to deliver reliable, affordable, and sustainable energy.
“The market is on track to deliver 98% renewable electricity by 2030. Rather than putting its eggs in one basket, we urge the Government to back the sector in delivering a portfolio of solutions by restoring investment confidence and cutting red tape up and down the energy sector.
“Our own analysis shows additional natural gas storage, in combination with demand response and new generation, will provide the seasonal and fast‑response backup we need at much lower cost. We also have future options to decarbonise thermal peaking generation, including carbon capture and storage, biomass, or using renewable gas.”
Carnegie says that the Government need only look over the Tasman for evidence that pumped hydro schemes face cost and timeframe blowouts. The Snowy 2.0 pumped hydro project has blown out from AU$2bn to AU$20bn, and delivery has been delayed from four years to at least 12 years.
“New Zealand should learn from our friends’ mistakes, which have left Australian taxpayers on the hook for billions of dollars.
“The worst part is that Snowy Hydro’s own modelling predicts that electricity prices will actually rise because of the project.
“The coming years are going to be bad for New Zealand’s energy affordability and security unless the Government shelves this project. The energy sector stands ready to collaborate with Government to deliver better outcomes for businesses, households, and taxpayers.”