Contact Energy - CEN Chart

[RTM]

https://www.msn.com/en-nz/news/natio...14b67d88a9f1f9

FYI

[xafalcon]

Both Clyde and Roxburgh are run-of river stations and both have minimum flow requirements. For Clyde it is 120 cumecs from 1 hr after sunset to 1 hr before sunrise, measured at the Clyde Golf Course which is about 1 1/4 hours flow time down stream from Clyde. For Roxburgh it is 250 cumecs measured immediately below Roxburgh power station. Thus Contact has to release water from Clyde to supply Roxburgh whether prices are high or low, and Clyde cannot hold water back over the 250 cumecs needed at Roxburgh for more than a few hours or it will exceed the maximum operating level of Clyde dam. Total storage in Clyde is measured in hours, not days, and Roxburgh only has 6 hours storage. Also to put the flows in perspective, a single machine at Roxburgh uses 100 cumecs at full load. Depending on whether Onslow uses the 120 MW units as suggested by Majeed, or the 250 MW units suggested by MBIE, the flow of an Onslow unit on full load would be either 17 or 40 cumecs. So a very small flow to or from Onslow compared to Roxburgh's flow.

If the Onslow intake is above the Roxburgh dam, Contact loses a small amount of water when flows re high and prices are low, but gets it all back (with no losses) when flows are low and prices are high. If the intake is below Roxburgh, then a new dam would need to built across the Clutha River in order to give a lower reservoir and sufficient pumping head. This in turn would be detrimental to Contact as it would raise the Roxburgh tail water level and reduce the operating head, and efficiency, of the Roxburgh turbines.

When the Clutha River flows are low enough that water is being released from Hawea to meet those requirements power prices are high enough that Onslow would be generating, and thus assisting Roxburgh to meet its minimum flow and reducing the amount of water that has to be wasted from Hawea. This allows the Hawea water to used more efficiently at both Clyde and Roxburgh.

Pumping would only occur when prices are low, or when there is more water in the Clutha river than is needed for minimum flows in the Clutha.

Great summary. Thanks for taking the time to explain

[Snoopy]

I have been trying to keep my two comparative CEN vs MRP posts from an FY2022 perspective (post 2256) and an FY2021 perspective (post 2257) as 'fact based'. In this post I am throwing in some of my own opinions.

The NZ gentailers look to have been forgiven a lot, as interest rates fell as a result of the Covid-19 'interest rate reset', and there was a mad scramble for yield. That 'mad' became more than a euphemism when a Blackrock ESG fund put Meridian and Contact Energy in a concentrated ESG fund, using sustainability as a share selection criteria. That saw the Meridian share price peak at just shy of $10, while Contact was just shy of $11. With customer cash inflows, the Blackrock fund was forced to buy these two shares at 'whatever the cost' - true madness.

By contrast, Mercury Energy did not scale the same crazy heights, topping out at about $7.25, and Mercury is still within strike of this all time peak today. Mercury never made it into the Blackrock ESG fund, which is why it largely escaped the mania. Mercury also has a much better growth record than MEL and CEN, as evidenced by the fact that it has largely swallowed what was the old 'fifth player' Trustpower (hydro generation and industrial customers excepted).

Nevertheless the gentailers have not lost their 'darling status' with the brokers. At the end of the FY2022 annual result presentation one Jarden broker got very excited about the improved cashflow that was to come from Contact's new Tauhara generation plant. Jarden issued a buy upgrade the next day on the assumption that all of that improved cashflow would go straight through to the dividend. However CEO Mike Fuge specifically said that forecasting a dividend two or three years out was not company policy. The big 'Geofutures' Wairakei field redevelopment, coming on stream when the original 60 year Wairakei old generation plant is due to be retired, will no doubt require a lot of that 'spare' cash, as will cost inflation in construction. Plus we have a very competitive electricity market, which means that some of those forecast revenue efficiency gains will not all make their way to the bottom line as that Jarden analyst believes.

I don't wish to single out Jarden's here as, from what I have read, other brokers think along similar lines: Looking for that positive cashflow 'hit', even when the CEO of the company concerned warns that it may not eventuate. In turbulent times, people will always need power. So the Gentailers have become untouchable rocks in any income generating share portfolio. 'Minor' considerations, like the mechanics of operating in a capital intensive competitive market, no longer require any consideration from some analysts, or so it would seem.

For this reason I believe that Mercury, in particular, is underrated by many retail focussed brokers, simply because it has the lowest dividend yield of the gentailers, (albeit the only dividend fully imputed). Certainly compared with Contact Energy, that debt position at Mercury is a concern, with MDRT blowing out from a high 10.5years a year ago to an even higher 12 years now. The bidding war for Tilt Renewables meant that Mercury did overpay for their newly acquired NZ wind farm assets. But they are also the only bidder that could afford to overpay, because of the central North Island power generating synergies available to them. With Mercury, we furthermore also have to remember that the full burden of the debt required to buy the Trustpower retail customers is on the balance sheet. But the full earning capacity of those acquired customers is not yet in the income statement.

A factor that favours Contact relative to Mercury is the higher gross income yield on the dividend payments, despite dividends not being fully imputed at Contact. However, when you consider that the imputed income credits attached at Contact seem to regularly exceed the declared profit tax bill, I am puzzled. My best explanation is that there is a bank of imputation credits that falls outside declared income, and this has been used to 'super-impute' many Contact Energy dividends. This balance, if it exists, must be finite and I have had a go at explaining it in post 1819. This means we might expect to see the imputation percentage of dividends from Contact Energy to reduce in future years, lowering the gross dividend yield for Contact in the future accordingly (IOW the underlying gross yield for Contact Energy is overstated on the CEN vs MCY comparison chart).

Given that Mercury had a less that optimal hydrological inflows over FY2022 (and FY2021 in fact), I believe the current market valuations for CEN and MCY are focussed more on current earnings, than the big multi-year picture. For the record, I don't believe the complimentary nature of the central North Island wind and water assets - in more normal hydrological conditions- are reflected in that MCY share price today. So despite what the brokers think, I am going for Mercury Energy as the better buy at today's price levels, with Contact Energy a close but honorable second. Don't get the idea that either is a 'get rich quick scheme' though!

SNOOPY

[silu]

I've partly sold a large holding on the ASX in the renewable sector and was looking at Contact Energy as a suitable replacement but reading through Snoopy's well researched post it seems I'm better suited to hedge my bets and split between MEL and CEN.

[Snoopy]

Both Clyde and Roxburgh are run-of river stations and both have minimum flow requirements. Total storage in Clyde is measured in hours, not days.

I have to admit I was not 100% sure what the definition of a 'run of the river' hydropower station was. From Wikipedia:
https://en.wikipedia.org/wiki/Run-of...droelectricity

"The use of the term "run-of-the-river" for power projects varies around the world. Some may consider a project run-of-the-river if power is produced with no water storage, but limited storage is considered run-of-the-river by others. Developers may mislabel a project run-of-the-river to soothe public perception about its environmental or social effects. The European Network of Transmission System Operators for Electricity distinguishes run-of-the-river and pondage hydropower plants, which can hold enough water to allow generation for up to 24 hours (reservoir capacity / generating capacity ≤ 24 hours), from reservoir hydropower plants, which hold for more than 24 hours of generation without pumps."

I think what was confusing me is that, having seen the Clyde dam, which ended up being the most expensive and drawn out civil engineering constriction project in New Zealand up until that time (and likely since), I had trouble reconciling this with holding such a 'small' amount of water. Technically Lake Dunstan, according to the European Network of Transmission System Operators, would be classified as a 'pond'. I guess this classification truly highlights the tremendous volume of natural water flow that comes down the Clutha River.

For Clyde the minimum flow requirement is 120 cumecs from 1 hr after sunset to 1 hr before sunrise, measured at the Clyde Golf Course which is about 1 1/4 hours flow time down stream from Clyde. For Roxburgh it is 250 cumecs measured immediately below Roxburgh power station. Thus Contact has to release water from Clyde to supply Roxburgh whether prices are high or low, and Clyde cannot hold water back over the 250 cumecs needed at Roxburgh for more than a few hours, or it will exceed the maximum operating level of Clyde dam. Total storage in Clyde is measured in hours, not days, and Roxburgh only has 6 hours storage.

I take it from this that what you are saying Jantar is that if you were to 'siphon off' water from the Clutha for Onslow, this would have to be done based very much on current prevailing weather front patterms, while still factoring in the snow-melt inflows that should be more predictable. 'Planning' to top up Onslow during a certain season, and at that time only, would not be possible? The performance of the two Clutha hydro dam system is determined by what is happening with the dam with the largest minimum flow requirement (Roxburgh), which happens to have the smaller 'pond' supplying it as well (Lake Roxburgh).

From what you have told us, if I were managing the system, I would run the Clyde dam at the minimum allowable flow rate of 120cumecs over night to co-incide with minimum power demand (say for eight hours). Then I would open the turbine gates up at Clyde during the day to an 'accumulated energy total flow' of 'F' (for the remaining 16 hours in one day) to ensure that Roxburgh received its daily dose of 250cumecs over 24 hours.

Clyde daily flow = 16F + 8(120cumecs) = 24(250cumecs) = Roxburgh daily flow => F= [24x250-8x120]cumecs/16 = 5040cumecs

Calculate Flow Rate: 5040/16= 315 cumecs/hour at Clyde 'during the day' (minimum flow rate).

Also to put the flows in perspective, a single machine at Roxburgh uses 100 cumecs at full load. Depending on whether Onslow uses the 120 MW units as suggested by Majeed, or the 250 MW units suggested by MBIE, the flow of an Onslow unit on full load would be either 17 or 40 cumecs. So a very small flow to or from Onslow compared to Roxburgh's flow.

If the Onslow intake is above the Roxburgh dam, Contact loses a small amount of water when flows re high and prices are low, but gets it all back (with no losses) when flows are low and prices are high.

Let's unpack this first option first. If the flow is taken from above Roxburgh to feed Onslow, then surely the flow through Roxburgh doesn't come into consideration. The extra flow to supply Onslow must come upstream from Clyde, not Roxburgh! 40cumecs over and above the minimum 120cumecs Clyde night time minimum is a 33% increase in flow from Clyde, and represents 33% more power than required being produced overnight from Clyde (just when they don't want to produce it). Looked at another way, that hydro-energy, if kept in the Clyde dam overnight, could otherwise have been fed into the electricity grid when prices are higher during the next day. This option is 'bad news' for Contact Energy, the way I read it.

If the intake is below Roxburgh, then a new dam would need to built across the Clutha River in order to give a lower reservoir and sufficient pumping head. This in turn would be detrimental to Contact as it would raise the Roxburgh tail water level and reduce the operating head, and efficiency, of the Roxburgh turbines.

Yes, quite right. But how high would that new dam downstream of Roxburgh have to be? I guess it depends on the capacity of the pumping system, pumping the water uphill to Onslow. I am picking the capacity of that pump would be a lot less than the water flow rate flowing through a turbine downhill from from Onslow when the nationwide power supply is short. So you might need quite a substantial dam downstream of Roxburgh. That sounds like really bad news for Contact, because the discharge head level from Roxburgh would in effect be permanently raised. And that would effect power generation from Roxburgh 24/7.

In summary, neither of these two 'Onslow options' seem very palatable for Contact shareholders.

Pumping would only occur when prices are low, or when there is more water in the Clutha river than is needed for minimum flows in the Clutha.

But didn't you just tell us that Roxburgh and Clyde only have a storage capacity of a few hours? How can you then say that pumping will occur only when power prices are low (in fact four quoted paragraphs back, you said 'high or low', which I have highlighted in bold)?

SNOOPY

[Jantar]

I have to admit I was not 100% sure what the definition of a 'run of the river' hydropower station was. From Wikipedia:
https://en.wikipedia.org/wiki/Run-of...droelectricity

"The use of the term "run-of-the-river" for power projects varies around the world. Some may consider a project run-of-the-river if power is produced with no water storage, but limited storage is considered run-of-the-river by others. Developers may mislabel a project run-of-the-river to soothe public perception about its environmental or social effects. The European Network of Transmission System Operators for Electricity distinguishes run-of-the-river and pondage hydropower plants, which can hold enough water to allow generation for up to 24 hours (reservoir capacity / generating capacity ≤ 24 hours), from reservoir hydropower plants, which hold for more than 24 hours of generation without pumps."

I think what was confusing me is that, having seen the Clyde dam, which ended up being the most expensive and drawn out civil engineering constriction project in New Zealand up until that time (and likely since), I had trouble reconciling this with holding such a 'small' amount of water. Technically Lake Dunstan, according to the European Network of Transmission System Operators, would be classified as a 'pond'. I guess this classification truly highlights the tremendous volume of natural water flow that comes down the Clutha River.



I take it from this that what you are saying Jantar is that if you were to 'siphon off' water from the Clutha for Onslow, this would have to be done based very much on current prevailing weather front patterms, while still factoring in the snow-melt inflows that should be more predictable. 'Planning' to top up Onslow during a certain season, and at that time only, would not be possible? The performance of the two Clutha hydro dam system is determined by what is happening with the dam with the largest minimum flow requirement (Roxburgh), which happens to have the smaller 'pond' supplying it as well (Lake Roxburgh).

From what you have told us, if I were managing the system, I would run the Clyde dam at the minimum allowable flow rate of 120cumecs over night to co-incide with minimum power demand (say for eight hours). Then I would open the turbine gates up at Clyde during the day to an 'accumulated energy total flow' of 'F' (for the remaining 16 hours in one day) to ensure that Roxburgh received its daily dose of 250cumecs over 24 hours.

Clyde daily flow = 16F + 8(120cumecs) = 24(250cumecs) = Roxburgh daily flow => F= [24x250-8x120]cumecs/16 = 5040cumecs

Calculate Flow Rate: 5040/16= 315 cumecs/hour at Clyde 'during the day' (minimum flow rate).




Let's unpack this first option first. If the flow is taken from above Roxburgh to feed Onslow, then surely the flow through Roxburgh doesn't come into consideration. The extra flow to supply Onslow must come upstream from Clyde, not Roxburgh! 40cumecs over and above the minimum 120cumecs Clyde night time minimum is a 33% increase in flow from Clyde, and represents 33% more power than required being produced overnight from Clyde (just when they don't want to produce it). Looked at another way, that hydro-energy, if kept in the Clyde dam overnight, could otherwise have been fed into the electricity grid when prices are higher during the next day. This option is 'bad news' for Contact Energy, the way I read it.



Yes, quite right. But how high would that new dam downstream of Roxburgh have to be? I guess it depends on the capacity of the pumping system, pumping the water uphill to Onslow. I am picking the capacity of that pump would be a lot less than the water flow rate flowing through a turbine downhill from from Onslow when the nationwide power supply is short. So you might need quite a substantial dam downstream of Roxburgh. That sounds like really bad news for Contact, because the discharge head level from Roxburgh would in effect be permanently raised. And that would effect power generation from Roxburgh 24/7.

In summary, neither of these two 'Onslow options' seem very palatable for Contact shareholders.



But didn't you just tell us that Roxburgh and Clyde only have a storage capacity of a few hours? How can you then say that pumping will occur only when power prices are low (in fact four quoted paragraphs back, you said 'high or low', which I have highlighted in bold)?

SNOOPY

That is a long response, but I still don't believe you understand the situation.

First, Onslow would not pump, or generate, based on the season, but rather it would do so based on the wholesale price. It is likely that it would be pumping when prices are less than around $50 per MW, and generating when prices are above $100 per MW. Because it can bid (for pumping) and offer (for generation) there would be a number of price bands, not a single price in each direction. It is likely that it would do both: Pumping overnight when prices are low, and generating during the day when prices are high on many days.

Second: The minimum flows are just that, minimum, yet the actual flow through the machines is constantly varying according to dispatch and small variations in frequency. To ensure that the minimum flow is not breached Roxburgh would normally have a minimum offer of 120 MW which is the most efficient load on 3 machines, and gives an outflow of 286 cumecs. The 120 cumec minimum flow is less than can be dispatched on a single machine, but allows for the timing issue of the flow station being 1 1/4 hours flow time downstream while the offer and dispatch process is in half hour increments.

Third: Clutha is a run of River scheme as the storage available at Clyde and Roxburgh is less than can be held for a single day. The median natural inflow at Clyde is 515 cumecs plus any water released from Hawea. If there are median inflows, and minimum water being released from Hawea, and only releasing sufficient water from Clyde to meet the 286 cumecs from Roxburgh, and Lake Dustan level was in the lower 1/4 of its 1 m operating range prior to starting, Clyde would be spilling water within 18 to 22 hours. This is the main definition of Run-of -River: Water reaching the top dam must be passed through within 24 hours.

Fourth: All hydro generators have an efficiency curve, and a flow point per machine where they are most efficient. A single machine at Clyde at 108 MW uses only 1.83 cumecs per MW, but at its minimum load of 70 MW uses 2.03 cumecs per MW. At Roxbugh the range is from 2.43 cumecs per MW at the most efficient point to 2.81 cumecs per MW at the least efficient point. That water saving per MW is a huge incentive to always load machines in most efficient manner possible, and is another reason why minimum flows are seldom targeted.




Clyde is able to shut down for a few hours overnight when flows are low, and doesn't have to supply water to Roxburgh continuously as Roxburgh has around 6 hours of storage.

NZ's power prices are closely linked to inflows, not storage as many seem to believe. When flows are low, as per your calculations in your second paragraph, prices would be high, and Onslow would be generating, not pumping. Thus overnight pumping at Onslow would only occur when there was above median flows in the river. In your final paragraph I think you are confusing the release of water to ensure minimum flows are being maintained Irrespective of price, and pumping for Onslow which would only occur when natural flows are above median and prices are low. If Onslow is generating during times of higher price and lower flows then Clyde would not need to release as much water for Roxburgh as Onslow would be supplying some should the Onslow scheme be above Roxburgh.

If the site selected is blow Roxburgh then the water height for pumping needs to 2.5 times the diameter of the intake pipe.

[Snoopy]

To re-orientate where I am going with my posting, I am interested in what threat an Onslow pumped hydro scheme installed on the Clutha River will have on the profitability of Contact Energy.

Rather than re-quote Jantar's useful technical background posts, I have rearranged the information he has supplied us in the table below. The order of discharge from 'mountains to the sea' along the Clutha is: Hawea (Genesis Energy Owned), Clyde (Contact), Onslow (Goverment owned) and Roxburgh (Contact).

I don't think there is any doubt that an alternative siting of the feed and discharge of Onslow downstream of Roxburgh would be the worst of the two proposed plans outcome for Contact. That option would require the construction of a whole new dam, below Roxburgh. That in turn would lower the discharge head of Roxburgh - permanently. And that would mean a permanent reduction in the power generating capability of the Roxburgh dam station. Fortunately for Contact shareholders, with a whole extra dam required, this looks likely to be an expensive option. So I am going to concentrate on the cheaper option of installing the 'pumping up' and 'discharge down' capacity of Onslow, by plugging it into the Clutha water flow between Clyde and Roxburgh.

Onslow, Roxburgh and Clyde on the Clutha

Median Inflow	Power Station	Storage at Maximum Output	Desired Minimum Power Generated (for efficiency)	Water Discharge Minimum (for efficiency)	Lowest Power Generated	Lowest Water Discharge	Legal Minimum Discharge
515cumecs/s	Clyde dam (4x108MW=432MW)	10 hours	108MW	198cumecs/s	70MW	142cumecs/s	120cumecs/s
	Onslow (4x250MW=1000MW)	'A lot'	250MW	40cumecs/s
	Roxburgh dam (8x40MW=320MW)	6 hours	120MW	286cumecs/s	80MW	215cumecs/s	250cumecs/s

Notes

1/ Median inflow into system can be supplemented by opening the upstream gates at Lake Hawea.
2/ The higher head that the water falls through, releasing more potential energy per unit of water, is the reason for the more 'efficient' generation at Onslow (for a given amount of water through the turbines).
3/ Power station information for Onslow represents one option being considered and may not be the final option chosen, should Onslow go ahead.

NZ's power prices are closely linked to inflows, not storage as many seem to believe. When flows are low, prices would be high, and Onslow would be generating, not pumping. Thus overnight pumping at Onslow would only occur when there was above median flows in the river. I think you are confusing the release of water to ensure minimum flows are being maintained Irrespective of price, and pumping for Onslow which would only occur when natural flows are above median and prices are low.

My understanding of the rationale for Onslow is for it to be government controlled 'reserve generation' that puts a lid on the maximum price offered into the nationwide power system. Without Onslow, this maximum price would be controlled by the gentailers who have made big money from rogue power price peaks. Peaking Thermal generation in particular would not be competitive with Onslow. But if Onslow were used all the time to flatten any wholesale power price spike, then there would be a possibility of the Onslow water supply being used up. That would remove the threat of Onslow coming on stream to reduce high spot power prices, and so defeat the whole rationale for Onslow existing in the first place. This means the 'default state' of Onslow must be to remain idle.

A problem that I see is that pumping water into Onslow is going to take a lot longer than releasing that same water downhill to generate power. If water is pumped up the hill at 1cumec/s as an example, it would take 40 hours of pumping to supply a single hour of discharge from one Onslow turbine. I can't help thinking you are going to run out of time to pump all the water you need up there. And remember this pumping will only occur when flow rates into the system are above the median recorded flow rate (apparently). So we will be 'time limited' for pumping up hill.

Unlike Clyde and Roxburgh, Onslow is not a 'run of the river' system. So power can be stored in Lake Onslow for months if necessary. If we can use short sharp rainstorms as periods to pump water up to Onslow that would be great. But wouldn't such storms be more likely to occur in winter when demand for energy is high? This is where I disconnect from the idea of 'river flows above the median' correlating with 'lower power prices'.

If Onslow is generating during times of higher price and lower flows then Clyde would not need to release as much water for Roxburgh as Onslow would be supplying some should the Onslow scheme be above Roxburgh.

So government run Onslow is generating power when prices are high, which means that the Clyde dam is not generating power when prices are high (because both generating power together would overwhelm downstream Roxburgh). How is that good for Contact?

SNOOPY

[xafalcon]

That is a long response, but I still don't believe you understand the situation.

First, Onslow would not pump, or generate, based on the season, but rather it would do so based on the wholesale price. It is likely that it would be pumping when prices are less than around $50 per MW, and generating when prices are above $100 per MW. Because it can bid (for pumping) and offer (for generation) there would be a number of price bands, not a single price in each direction. It is likely that it would do both: Pumping overnight when prices are low, and generating during the day when prices are high on many days.

Second: The minimum flows are just that, minimum, yet the actual flow through the machines is constantly varying according to dispatch and small variations in frequency. To ensure that the minimum flow is not breached Roxburgh would normally have a minimum offer of 120 MW which is the most efficient load on 3 machines, and gives an outflow of 286 cumecs. The 120 cumec minimum flow is less than can be dispatched on a single machine, but allows for the timing issue of the flow station being 1 1/4 hours flow time downstream while the offer and dispatch process is in half hour increments.

Third: Clutha is a run of River scheme as the storage available at Clyde and Roxburgh is less than can be held for a single day. The median natural inflow at Clyde is 515 cumecs plus any water released from Hawea. If there are median inflows, and minimum water being released from Hawea, and only releasing sufficient water from Clyde to meet the 286 cumecs from Roxburgh, and Lake Dustan level was in the lower 1/4 of its 1 m operating range prior to starting, Clyde would be spilling water within 18 to 22 hours. This is the main definition of Run-of -River: Water reaching the top dam must be passed through within 24 hours.

Fourth: All hydro generators have an efficiency curve, and a flow point per machine where they are most efficient. A single machine at Clyde at 108 MW uses only 1.83 cumecs per MW, but at its minimum load of 70 MW uses 2.03 cumecs per MW. At Roxbugh the range is from 2.43 cumecs per MW at the most efficient point to 2.81 cumecs per MW at the least efficient point. That water saving per MW is a huge incentive to always load machines in most efficient manner possible, and is another reason why minimum flows are seldom targeted.




Clyde is able to shut down for a few hours overnight when flows are low, and doesn't have to supply water to Roxburgh continuously as Roxburgh has around 6 hours of storage.

NZ's power prices are closely linked to inflows, not storage as many seem to believe. When flows are low, as per your calculations in your second paragraph, prices would be high, and Onslow would be generating, not pumping. Thus overnight pumping at Onslow would only occur when there was above median flows in the river. In your final paragraph I think you are confusing the release of water to ensure minimum flows are being maintained Irrespective of price, and pumping for Onslow which would only occur when natural flows are above median and prices are low. If Onslow is generating during times of higher price and lower flows then Clyde would not need to release as much water for Roxburgh as Onslow would be supplying some should the Onslow scheme be above Roxburgh.

If the site selected is blow Roxburgh then the water height for pumping needs to 2.5 times the diameter of the intake pipe.

Thanks for this easy to understand explanation. You certainly have some great knowledge and experience

Drawing on that Knowledge and experience, do you believe Onslow will proceed? What ownership structure would you expect? Is it likely to be a profit driven entity or public good (with construction and operation cost recovery)

On a related note, has grid capacity in south island been/being upgraded to allow all manapouri electricity to be moved north if NZAS closes if a deal can't be made that satisfies EA new rules >150MW?

[xafalcon]

To re-orientate where I am going with my posting, I am interested in what threat an Onslow pumped hydro scheme installed on the Clutha River will have on the profitability of Contact Energy.

Rather than re-quote Jantar's useful technical background posts, I have rearranged the information he has supplied us in the table below. The order of discharge from 'mountains to the sea' along the Clutha is: Hawea (Genesis Energy Owned), Clyde (Contact), Onslow (Goverment owned) and Roxburgh (Contact)

I don't think there is any doubt that siting the feed and discharge of Onslow downstream of Roxburgh would be the worst outcome for Contact. That option would require the construction of a whole new dam. That in turn would lower the discharge head of Roxburgh. And that woudl be a permanent reduction in eh power generating ability of that station. Fortunately for Contact shareholders, with a whole extra dam required, this looks likely to be an expensive option. So I am going to concentrate on the cheaper option of installing the pumping up and discharge down capacity of Onslow plugging into the Clutha water flow between Clyde and Roxburgh.

Onslow, Roxburgh and Clyde on the Clutha

Median Inflow	Power Station	Desired Minimum Power Generated (for efficiency)	Water Discharge Minimum (for efficiency)	Lowest Power Generated	Lowest Water Discharge	Legal Minimum Discharge
515cumecs/s	Clyde dam (4x108MW=432MW)	108MW	198cumecs/s	70MW	142cumecs/s	120cumecs/s
	Onslow (250MW)		40cumecs/s
	Roxburgh dam (8x40MW=320MW)	120MW	286cumecs/s	80MW	215cumecs/s	250cumecs/s

Notes

1/ Median inflow into system can be supplemented by opening the gates at Lake Hawea.

From what I've read, Onslow is proposed to be 1000MW

[Snoopy]

From what I've read, Onslow is proposed to be 1000MW

I have corrected my post accordingly.

SNOOPY