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13/12/2022: How NZ's power grid can improve in the short term before the NZ Battery Project

I saw a TV interview with Australian engineer/entrepreneur Saul Griffith today on Three's The Project and generally agreed with what he was saying.

One thing struck me though. It's how he said that NZ is one of the easiest countries to decarbonise electricity in, due to our abundant hydro power. So why have we not done it already? Specifically, Saul said that we can use solar and use the hydro reservoirs "as a battery", amidst variable solar and wind. This is something I'd thought of a few months ago, but it took someone credible putting it out there - albeit briefly - for me to actually believe it might work. Let me try to explain.

NZ's energy is mostly renewable, but not completely, and we already have security of supply problems. We can't really build more hydro, there just aren't enough rivers to dam without causing environmental problems from the construction - and wind and solar are intermittent, thus are valued poorly, because we need security of supply.

In NZ the government has proposed the "NZ Battery Project": convert Lake Onslow to a massive pumped hydro scheme to store energy and release it on demand. This is in many ways the ultimate solution to the above problems, but it'll cost about $4 billion according to MBIE, and take 6 years to construct and commission - and hasn't started yet. And it won't generate any energy in itself - it'll just store and release it. So yes, this project is very much using hydro "as a battery" - but there's a way we can use our existing hydro dams more efficiently around greater solar and wind resources, which shouldn't take years or cost billions. I'm not totally sure if this was what Saul meant, but here are my thoughts anyway.

My point is:

We already have heaps of hydro dams - reservoirs - around the country. So instead of running hydro power stations continuously alongside other sources like wind and solar, we should prefer to use those intermittent solar and wind based sources as much as possible, when they're available - and use hydro ONLY to fill in the gaps when they're not. That way, if we increase the amount of solar and wind generation we have, we reduce our hydro power usage. To my knowledge, this is not what the system does at present.

Why we still need Lake Onslow

The Lake Onslow project exists to solve our dry year problem, which exists because our existing hydro reservoirs can run out if we don't get enough rain. Now if you're using less hydro because you're using solar and wind smartly, then that reduces that problem. Dry year? Probably a lot of sunshine, so you won't need so much hydro resources. But it doesn't eliminate the problem completely because conventional dams can't use power from solar/wind to pump water back uphill and "charge the battery". We also have a security of supply problem in terms of catering to peak demand, for example on a calm but cold winter evening when there is no sun or wind but everyone needs heating. So that's why we need Lake Onslow.

But what I'm talking about could actually happen now as far as the infrastructure is concerned.

The case

Hydro makes up about 60% of NZ's generation capacity: that means 60% of our generation can be turned off at a given time, so we can absorb a lot of power from those volatile renewable sources when they're available. Then there will be more water in the dams for later, when those sources aren't available. So this idea would allow us to install and utilise more solar and wind now, increase our renewable energy share, and reduce our dry year problem, before Lake Onslow is constructed.

So why not?

One possible reason is technical: perhaps it's hard to quickly adjust the power being produced by hydro dams, so it would be hard to keep the grid stable using this method. I don't think this is the case, and Lake Onslow would be using the same technology anyway (which MBIE say can provide fast response reserve). Even if this were the case, battery energy storage on a reduced scale could fill in the gaps.

The main reason, I think, is the way our energy market works. The hydro dams are owned by generation companies. They want to make money. That means selling power when it's available and also when it's needed (i.e. when the price is good). This puts hydro power on the same footing as wind and solar, so even when we have a surplus of power, hydro is mostly still generating, and wanting to be sold on the market. This makes little sense, because while hydro is always available - it's like water in a tank, so just turn on/off the tap - solar and wind aren't, so logically they should take priority when they are available. What we need is for the market to reflect this. This probably requires substantially changing the way the energy market works.

Markets are not my area of interest or expertise, but making changes to the market sounds a lot simpler - not to mention FASTER - than a multi-billion dollar construction project to me.

And when it comes to climate action, we have a need for speed, right?

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