The resurrection of the Lake Onslow pumped hydro scheme

The Lake Onslow Pumped Hydro Scheme, once scrapped by the National government in 2023 due to its $16 billion price tag and perceived market uncertainty, is making a comeback—this time as a private initiative. A consortium led by former environment minister David Parker and energy veteran Keith Turner, along with originator Earl Bardsley, is pushing for fast-track consent under New Zealand’s new one-stop-shop system. The project aims to transform Lake Onslow in Central Otago into a massive hydro storage facility capable of holding up to five terawatt-hours of water—equivalent to about a third of New Zealand’s annual electricity use. It would function like a giant battery, pumping water uphill during low-demand periods and releasing it to generate power during peak demand, especially in dry years when hydro levels drop. While the government previously deemed it too costly and risky, the private group claims it could be built for $8–10 billion and operational by 2035. However, major hurdles remain: securing consents through the fast-track process, overcoming historical challenges with large infrastructure in New Zealand, and proving the commercial viability of such a project without public funding. Meanwhile, the government’s own LNG import terminal plans are under scrutiny due to volatile global gas prices, raising questions about whether alternative solutions like pumped hydro or renewables overbuild might be more sustainable. The episode explores the tension between ambition and feasibility in New Zealand’s energy future.