Power shares

[horus1]

What a waste of money this Lake Onslow is . Can it not be done moire cheaply with batteries as is happening overseas . This is the past way of doing things. Think big all over again?

[Jantar]

…….

The combined hydro storage capacity of Meridian, Contact and Mercury would dwarf Onslow would it not? If we got to the situation of calling in Onslow, then the total hydro storage capacity of the country would still be in trouble. So overall, would the spot hydro price fall? And isn't Onslow an upstream part of the wider Clutha catchment? So couldn't Contact use the Onslow outflow as Clyde dam inflow and so make more money than the other hydro system players in dry years?......

SNOOPY

The size of Onslow, if full, would be 3 times the size of all of NZ's current storage lakes combined. Onslow would dwarf the others.

Lake Onslow is east of Roxburgh which is the lower of the two dams on the Clutha. The shortest route for tunnelling is from Onslow to midway Roxburgh township and Millars flat, but the civil works required at that point to get enough head over the pump intake would be massive. The cheaper, and less environmentally harmful solution, is to have a longer tunnel with the pump/hydro station on Lake Roxburgh, a short distance upstream of Roxburgh Power Station.

There is no proposal as yet as to which company would own and operate it. Indeed any company could do so. It would make sense for Contact to be the operator as they already have knowledge of the operation of Lake Roxburgh, and also have an operation and maintenance workforce locally.

[k14]

Doesn't Genesis already have the biggest mismatch between retail customers and owned generation? If they closed Huntly, wouldn't they be reliant on buying power supply contracts on market?

Yes that is correct. However if there is any upside benefit removed from their current portfolio make up, then they have the flexibility to write that asset off and invest elsewhere. Any hydro operators don't have that luxury, not going to see Meridian walk away from Benmore anytime soon are we?

The combined hydro storage capacity of Meridian, Contact and Mercury would dwarf Onslow would it not? If we got to the situation of calling in Onslow, then the total hydro storage capacity of the country would still be in trouble. So overall, would the spot hydro price fall? And isn't Onslow an upstream part of the wider Clutha catchment? So couldn't Contact use the Onslow outflow as Clyde dam inflow and so make more money than the other hydro system players in dry years?

That's the issue, Onslow would by itself dwarf the cumulative storage of the rest of NZ. I think there is roughly 4000GWh of hydro storage across all hydro lakes currently. At 5000GWh at one asset this would massively change the situation.

What company is it proposed would own and operate Onslow?SNOOPY

That's the $64,000 question. No idea how it would integrate. Most likely be operated by an existing player (with Contact being the logical choice due to proximity to existing assets), however ownership and the commercial rules around operation would be one for some PhD Economist to figure out.

[Jantar]

What a waste of money this Lake Onslow is . Can it not be done moire cheaply with batteries as is happening overseas . This is the past way of doing things. Think big all over again?

The Capex for large scale batteries is around $2000 per kWh. The Capex for Onslow is around 25c per kWh.

[k14]

What a waste of money this Lake Onslow is . Can it not be done moire cheaply with batteries as is happening overseas . This is the past way of doing things. Think big all over again?

To have the same capacity as Onslow in Tesla batteries would cost in the ballpark of $3-4 Trillion (yes with a T). Plus every 20 years you would have to replace them.

People need to understand that this is not short term peak transmission management (as the battery banks have a valid market for). This is long term storage to smooth the peaks and troughs of intermittent renewable generation (wind/droughts/floods/solar) and allow retirement of coal/gas thermal generations. Battery technology as it currently stands is cost prohibitive for anything more than intra-day/week smoothing.

[Snoopy]

Yes that is correct. However if there is any upside benefit removed from their current portfolio make up, then they have the flexibility to write that asset off and invest elsewhere. Any hydro operators don't have that luxury, not going to see Meridian walk away from Benmore anytime soon are we?

The problem is 'writing off your investment in Huntly' doesn't create any more capital to invest with elsewhere! In fact Genesis are so short of capital now that their latest large consented wind farm, is to be built by Tilt IIRC, and is set to be owned by Tilt with Genesis having a long term take or pay contract to take the output. IOW Genesis doesn't have the capital to invest in a new large power station to replace Huntly.

That's the issue, Onslow would by itself dwarf the cumulative storage of the rest of NZ. I think there is roughly 4000GWh of hydro storage across all hydro lakes currently. At 5000GWh at one asset this would massively change the situation.

Wow, I had no idea the proposed Onslow would have that kind of capacity (up to 5,000GWh). Notice I said up to 5,000GWh. There are two ways to increase the capacity of a hydro catchment.

1/ Create a feeder lake with a larger surface area.
2/ Create a feeder lake that is deeper.

I guess if you are going to the expense of all that tunnelling, it might make sense to make the capacity of Onslow as large as practicable 'up top'? But is there a 'cheaper' scenario where say a 2,000GWh Onslow might do the job, by not making the dam as high?

SNOOPY

[k14]

Wow, I had no idea the proposed Onslow would have that kind of capacity (up to 5,000GWh). Notice I said up to 5,000GWh. There are two ways to increase the capacity of a hydro catchment.

1/ Create a feeder lake with a larger surface area.
2/ Create a feeder lake that is deeper.

I guess if you are going to the expense of all that tunnelling, it might make sense to make the capacity of Onslow as large as practicable 'up top'? But is there a 'cheaper' scenario where say a 2,000GWh Onslow might do the job, by not making the dam as high?

SNOOPY

Yes, I believe there are size/storage options from as low as you want, right up to 12,000GWh. Some quite complex cost/benefit analysis to be done. Capacity of station (1200MW seems to be the most commonly used number) and height of dam seem to be the biggest variables. But diameter of tunnel is also another variable to consider. The geography allows for quite a few scenarios, however practicality is going to be the key stumbling block I fear.

[Jantar]

…..

1/ Create a feeder lake with a larger surface area.
2/ Create a feeder lake that is deeper.

I guess if you are going to the expense of all that tunnelling, it might make sense to make the capacity of Onslow as large as practicable 'up top'? But is there a 'cheaper' scenario where say a 2,000GWh Onslow might do the job, by not making the dam as high?

SNOOPY

One of the good things with Onslow is that the lake has both, a larger surface area, and much, much deeper. The current Onslow dam is in a very narrow gorge, and not much fill is required to raise it. The other good point is that it can be built in stages. As the dam is not where the tunnel portal is, the dam can be raised, in stages, even when Onslow is operating.

The 5000 GWh storage referred to by K14 is just the first stage, obtained by raising the dam 40 m. Stage 2 is obtained by raising the dam 60 m, and stage 3 raising it to its full potential at 80 m and giving over 12,000 GWh of storage.

There is even a 4th stage possible, but maybe not economical, by raising it a further 10 m and adding a tunnel to the upper Manorburn to give 14,000 GWh of storage. This was not included in the Majeed thesis as the extra storage did not warrant the extra cost.

[RTM]

One of the good things with Onslow is that the lake has both, a larger surface area, and much, much deeper. The current Onslow dam is in a very narrow gorge, and not much fill is required to raise it. The other good point is that it can be built in stages. As the dam is not where the tunnel portal is, the dam can be raised, in stages, even when Onslow is operating.

The 5000 GWh storage referred to by K14 is just the first stage, obtained by raising the dam 40 m. Stage 2 is obtained by raising the dam 60 m, and stage 3 raising it to its full potential at 80 m and giving over 12,000 GWh of storage.

There is even a 4th stage possible, but maybe not economical, by raising it a further 10 m and adding a tunnel to the upper Manorburn to give 14,000 GWh of storage. This was not included in the Majeed thesis as the extra storage did not warrant the extra cost.

Interesting posts. Thanks all.

[Beagle]

GNE - Net yield at $2.85 = 6%. Add in usual 80% imputation and I get 6 / 0.776 = 7.7% gross. Hmmm