Pumped Hydroelectricity and Utility-Scale Batteries for Reserve Electricity Generation in New Zealand

Non-pumped hydroelectricity-based energy storage in New Zealand has only limited potential to expand to meet projected growth in electricity demand. Seasonal variations of hydro inflows have also led to several 'dry-year' events over the last decade and dedicated fast-start 'peaker' capacity may also be required to support wind power as it approaches a 20% generation share. In this research, the New Zealand electricity industry has been surveyed in regard to the feasibility of reducing CO2-e emissions through the introduction of pumped hydroelectricity and utility-scale batteries by 2025. A desk-based review of the economic costs of these technologies has also been performed and their drivers and barriers critically assessed. Most respondents to the survey projected that peak power demand will continue to increase and this will result in new-build centralised (~150 MW) thermal reserve power sources. In New Zealand, the costs of pumped hydro and batteries are seen to be prohibitive to their introduction, even though they are almost universally assumed to be technically capable of providing renewables support and peak power adequacy. The perception of the poor economic viability of pumped hydro may, in part, be due to the relatively high capital cost estimate associated with the Manorburn-Onslow proposal (~NZ$3 billion). This research has shown, however, that smaller, 'more-internationally-representative' pumped hydro schemes, if available in NZ with low associated environmental impact, are cost-competitive with thermal peakers, especially diesel peakers. Conversely, utility-scale batteries have very high storage costs per kWh and are most likely to be used only for very high value applications where there is a strong technical advantage, such as the six-second fast instantaneous reserve.