Power shares

[Jaa]

Probably not.
By 2030 all the Rankine units will be retired and unit 5 will be nearing the end of its economic life.

Replacing those will be the Castle Hill wind farm, but that only becomes fully economic if there is a method of storing that wind energy at times of high generation. This is where the Onslow scheme helps. It can store energy, and at the same time apply a floor to the price that wind farms get for their generation. This would be doubly effective if Genesis was to own and/or operate the Onslow scheme.

The question then is who would the coalition or a future Labour/Green government like to own Onslow?

1) 100% government ownership
e.g. The Crown, Transpower, Electricity Commission, Superfund, ACC

2) Government controlled Gentailers
e.g. MCY, MEL, GNE

3) Evenly between the big 5
e.g. MCY, MEL, GNE, CEN, TPW

4) The highest bidder
e.g. MCY, MEL, GNE, CEN, TPW, IFT, Superfund, ACC, Overseas bidders etc

My guess would be 1) and placed under Transpower as grid support with an operator like Meridian appointed to operate it.

[Jantar]

The question then is who would the coalition or a future Labour/Green government like to own Onslow?

1) 100% government ownership
e.g. The Crown, Transpower, Electricity Commission, Superfund, ACC

2) Government controlled Gentailers
e.g. MCY, MEL, GNE

3) Evenly between the big 5
e.g. MCY, MEL, GNE, CEN, TPW

4) The highest bidder
e.g. MCY, MEL, GNE, CEN, TPW, IFT, Superfund, ACC, Overseas bidders etc

My guess would be 1) and placed under Transpower as grid support with an operator like Meridian appointed to operate it.

I would agree with your guess. Government owned, but operated and maintained by one of the existing big 4.

The most logical choice to operate it would be Contact as they already have most of the staff and control systems in place. It would also fit in their block dispatch agreement with Transpower. Next most likely would be either MEL or GNE as they also have hydro operating experience, and both have wind farms so would be able to set the bid price to suit.

However, any gentailer could preempt the process and go it alone if they can afford the $4B upfront and no income from it for at least 5 years.

[turnip]

Could supercritical geothermal have a role in solving the dry year problem?

However much storage capacity Onslow or any other scheme could provide, it seems there would always tbe the risk that a dry period could last longer than the storage, leaving us back where we started and needing more dry weather generation.

[Jantar]

Could supercritical geothermal have a role in solving the dry year problem?

However much storage capacity Onslow or any other scheme could provide, it seems there would always tbe the risk that a dry period could last longer than the storage, leaving us back where we started and needing more dry weather generation.

Simple answer: No. Geothermal is base load and provides no storage. It actually compounds the situation.

Onslow would increase NZ's storage by almost 3 times, so to deplete all that would require 3 consecutive droughts each roughly equivalent to the 1991 - 92 drought.

[kiora]

Using Green Energy to produce more useful less Green Energy?

https://www.scoop.co.nz/stories/BU20...September+2020

[peat]

Onslow is crazy money looking for a home.

[horus1]

Onslow is probably economic in that it will reduce the need for a lot of transmission ,$1-2B, AND further more it will reduce spot prices and hence Electricity prices substantially . The Industry will be against it and I hope it is run by the Govt not an existing generator.
It is not silly.

[Jantar]

It will probably be price neutral. While it will cap the high spot prices, it will also put a floor on extremely low prices. Below is a graph I did looking at the effect on prices on a fairly volatile price day back in February.

Attachment 11934

[horus1]

Taking out the high prices will really affect returns.

[gains]

Taking out the high prices will really affect returns.

As Jantar's graph shows (and he stated), Lake Onslow will produce a ceiling but also a floor, making it more likely to be a neutral gain. The winner's will be wind farmers and geothermal operators.

For wind farm's, it optimises all potential generation as there is always someone to buy the power. Drastically reducing the potential for curtailment and therefore maximising output. Meaning, if the winds blowing, the operators are generating and likely making money.

For geothermal operators, they'll get better prices for all their extra power being generated at 3am that few people want. Generally during the night the HVDC is reversed to supply the south island because of geothermal over supplying the north island's power at that time of the day, slashing the spot price so a lot of other generators shut down. Rather than killing the spot price, Onslow could set the minimum price. Guaranteeing margins for gentailers.

It would also allow the base generation to be increased without the need for immediate demand. Of course there will be limitations but definitely doesn't directly mean returns will be affected in the way you'd initially think.

Onslow could limit the peak demand pricing but peaker plants are more expensive to run so furthermore, I think we will find that the effect is actually lesser than you'd think.