Government scraps Lake Onslow hydro scheme

  • 03/12/2023
Energy Minister Simeon Brown said the scheme was a "hugely wasteful project".
Energy Minister Simeon Brown said the scheme was a "hugely wasteful project". Photo credit: Newshub

The new Government has announced it will scrap the $16 billion Lake Onslow pumped hydro scheme.   

The Lake Onslow project was designed to serve as a giant battery to help protect against hydroelectricity shortages and create more stability in the market. 

But Energy Minister Simeon Brown announced on Sunday the scheme, which he said was "championed by the previous government", will be scrapped and was identified as a priority of the Government's 100-day plan.   

Brown said the project is "hugely wasteful" and was "pouring money down the drain" at a time when "we need to be reining in spending and focusing on rebuilding the economy and improving the lives of New Zealanders".   

"After I instructed officials of my expectations, on Friday the Ministry of Business, Innovation and Employment confirmed all work on the scheme has ceased and decommissioning is set to begin," Brown said.   

"On top of its $16 billion price tag, the Lake Onslow scheme would run into likely issues with consenting and it wouldn't be delivered for at least another decade.  

"Industry experts warned that if the scheme went ahead it would have a chilling effect on the pipeline of renewable electricity generation New Zealand needs to reach our climate goals."  

The Energy Minister said the security of the country's electricity supply is critically important and added the Government is committed to cutting red tape to drive investment in renewable electricity generation.  

"Demand is forecast to increase by two-thirds by 2050 and we need to build enough generating capacity to meet that demand. To do this, we're going to need to significantly increase the amount of clean energy we generate from solar, wind and geothermal," Brown said.  

"Our decision to cancel Lake Onslow, and our commitment to make it easier to consent wind, solar and geothermal energy projects, will give industry certainty in the direction the Government is heading and greater confidence to invest in more energy production in New Zealand."  

It was revealed earlier this year that the cost of the project had ballooned out from $4b to $15.7b.