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NZ Labour's Fake Energy Policy

Welcome to New Zealand's brave new world. 

First we have a fake-left Prime Minister with a fake Covid19 narrative. Now her fake Labour Party (they've just destroyed thousands of workers jobs) is pushing a fake energy policy.

The other day I put up a quick post about the NZ government's press release announcing its intention to use 'renewable' electricity to pump water to high reservoirs in order to create hydro 'batteries'. Here I'll expand on why I think this is a bad idea.

From the press release: 

"The Government is taking a significant step toward ... 100% renewable electricity generation in a move that could be a game changer for consumers and the creation of a low-emissions economy ... If a business case stacks up pumped hydro would be a game changer for securing sustainable, cheaper, low-emissions electricity for the long term ... It works like a battery because the stored energy in the water is released when it is used in the hydroelectric dam. This opens up huge possibilities for cheaper electricity and increased supply ..."

Renewable, sustainable, low emission electricity

The myth of 'sustainable, low emission, renewable' electricity has been thoroughly addressed by Jeff Gibbs and Michael Moore in their important film Planet of the Humans, and as the film shows, it's been the solar and wind industries' dirty secret for years (the POTH analysis of wind energy matches mine and was one of the reasons I decided to end my short stint in the wind energy industry over a decade ago).

The Second Law of Thermodynamics

One way of thinking about the Second Law of Thermodynamics is when energy is used to perform work, the resulting system will have less energy for further work (apologies to fellow engineers and scientists for this simplistic explanation). In other words, if energy is used to pump water into a high reservoir, the potential energy available from the now high-reservoir-stored water will be less than the energy used to pump it into the reservoir. This uncontroversial idea originated in the 19th century. 

Some (made-up) numbers might help. If 100 kWh of electricity is used to pump water into a reservoir, that same water now stored in the high-reservoir can only generate less than 100 kWh of electricity. So if the reservoir costs 100 kWh of electricity to fill, and gives 99 kWh back when run through a hydro-scheme, then it operates at a net loss (the numbers don't actually matter but the true return would be considerably less than 99 kWh). To argue otherwise is to argue in support of perpetual motion. I wonder if they've heard of net energy? This sort of project is scraping the bottom of the energy barrel, and we shouldn't ever consider them.

O&M Costs of Wind-Generated Power

Wind is expensive to run. Consider the cost of operation and maintenance. From www.wind-energy-the-facts.org 

Operation and maintenance (O&M) costs ... may easily make up 20-25 per cent of the total levelised cost per kWh produced over the lifetime of the turbine.

Compare this with hydro which has a levelised O&M cost with an order of magnitude lower (~2.5% for large hydro, ~5% for small).

Transmission and Distribution Losses

Most of New Zealand's fossil fuel electricity generation is in the North Island, which is also where most of the demand is, and accounts for about 25% of total generation. The plan is to replace this generation with so-called 'pumped-hydro' from the South Island. However, because of transmission and distribution (T&D) losses (at least 20%, probably much more given the distance) the amount of new generation required will be well in excess of the decommissioned (lost) electricity generation For every 100 kWh/year of fossil fuel generation decommissioned, this project would need to generate 125 kWh/year {1} just to account for the high T&D losses.

The Environment, Sound & Visual Pollution

I'll leave the ecological impact to ecologists. Here I want to look at a scenario where all the new 'renewable' generation is wind.

A figure of 5000 GWh/year of water storage has been discussed. Because of the second law of thermodynamics, let's assume a further 10% of electricity is needed to power the pumps which move the water to the high-reservoir. That's 5500 GWh/year.

Consider a Vestas 4MW turbine. Running at full capacity (which is impossible because of no- and low-wind conditions, high wind shutdown, maintenance etc.), a single turbine would have a theoretical production of 35 GWh/year {2}. This means in the order of 200 wind turbines would be needed {3}.

The Vestas 4MW turbine can have up to a 150m diameter rotor, so the tower it sits on will be anywhere above 100+ metres tall. Imagine 200 wind turbines with 150m rotors sitting on 100+ metre towers littering this pristine landscape  (perhaps someone skilled in the graphic arts could create a visual of this) all going

womp ... womp ... womp ... womp ...womp ...

for as long as the project is in operation. Ask our Palmerston North brothers and sisters what this is like. And they have smaller turbines on that site.

And if the 4MW turbine isn't suitable for the site, smaller turbines will be used and there will be more of them.

The costs, and is cheaper possible?

The numbers proposed include $30 million for the business case, and '$4B plus' for the project if it goes ahead. It may take $30 million to make the project appear feasible. What about the $4B-plus figure?

Let's assume a turbine/tower cost of $2 million each (l'll bet it's more). That's $400M just for the basic hardware. Then there's the transport to site, tower pads, erection costs, substations, an extensive new road network and existing road widening, the new dam, penstock and tunnel, power plant ... . The $4B-plus figure discussed for the complete project will easily blowout heavily on the 'plus' side. Double that number and you'll be getting closer.

So will this scheme produce cheaper electricity? No. It's impossible. If you add expensive 'renewable' generation onto the front end of hydro, that hydro must be more expensive. Will it be cheaper than the fossil fuel generation it's supposed to replace? When you consider the second law of thermodynamics effect and the T&D losses, only creative accounting will make this 'cheaper'.

Will it produce lower-priced electricity to the consumer? Only if it is heavily subsidised by the already over-stretched (and over stressed) New Zealand tax payer.

The Myth of Fossil Fuel Independence

Any talk of getting off fossil fuel dependence is pure hyperbole or ignorance, or both. For example, electric cars use large amounts of fossil fuels in their manufacture. About 50% of an electric vehicle is plastic (roughly 350kg) which, of course, is made from oil. And plastics have an embodied energy in the order of 100MJ per kg. I wonder how much of this plastic is manufactured using non-fossil fuel sources? The belief that this scheme will "get ourselves off fossil fuels" is simply delusional.

The Business Case - Decision Made?

The idea of a 'business case' is amorphous. Certainly the business case will stack up for the engineering consultancies, engineering behemoths, sub-contractors, and suppliers who will undertake the feasibility studies and construction. There are billions of dollars at stake. There are temporary jobs, of course, during construction and a few permanent ones afterwards. But a good business case for New Zealanders in general? No way.

From the press release it seems that the government is determined to press ahead: "The $30 million allocated will pay for the detailed development of a business case for a solution.The implication here is that a business case will be developed. 

I can create the business case for the government. I'll put some numbers into my black box software program and produce an electricity generation model which will make the project appear as a gift from the gods (see Confessions of an Economic Hitman for how to do this). I know that my client engineers, the politicians, and many people want it to go ahead. I know my numbers won't be too critically analysed. I know that once the true costs become apparent years later, I'll have been paid and long gone. Job done. Where do I send my invoice?

Dry Year Storage

The press release suggests that this cargo-cult will "address New Zealand’s dry year storage problem." Lake Onslow is situated in the driest area of New Zealand {4}. So we're going to "address New Zealand’s dry year storage problem" with the lake in the driest part of New Zealand, which of course is why they need to fill it using electricity.


The government is planning on expanding Lake Onslow for hydro-storage in the driest part of New Zealand, and then will use expensive electricity to fill the lake in order to generate a lower amount of electricity than was actually used to fill it! They'll need to generate an amount of 'renewable' electricity far in excess of the fossil fuel generation that will be mothballed because of the second law of thermodynamics and the various transmission and distribution losses. The pristine landscape will be scarred forever with the hardware and infrastructure of this colossally misconceived project.

The hubris is fantastic. 


{1} 100 / (1-0.2) = 125 (using the 20% loss figure).

{2} 4MW x 24 x 365 ~ 35,000 MWh = 35 GWh per turbine per year. 

{3} 5500/35 = 157. I'll guessimate 200 turbines for a more realistic estimate to generate 5500 GWh/year.

{4} The Climate and Weather of Otago - Niwa, Fig 9, pg 16.


Stories about renewables

17 August 2020: China is the biggest winner of the US renewables boom
"China supplies ~80 percent of the rare earths elements (REE) used by the United States to manufacture windmills, solar panels, electric car batteries, cellphones, computers, medical equipment, national defense systems, and even in oil and gas technologies."


See also:

DOWN WIND - Wind Farm documentary - FULL DOC in HD

27 July 2020: One News - Conservation group wary of Government proposal to build hydro-electric facility at Lake Onslow

28 July 2020: Stuff - Industry figures say Lake Onslow hydro project not worth it (though they're right, I'd take there rationale with a grain of salt. The existing players have a vested interest in the status quo because they get higher prices in a fluctuating electricity market).

18 Sept. 2019: OTD - Massive hydro storage plan to be reassessed