Green light for plan to take extra water from Lake Pūkaki for 3 years

Aoraki/Mt Cook across Lake Pūkaki.

Photo: Susan Rebergen

A Meridian Energy proposal to temporarily take more water from Lake Pūkaki for hydro power has been given draft approval by a fast-track panel.

The controversial proposal will allow Meridian to draw down the lake level an extra five metres over a three-year period, without needing special approval from Transpower.

It was opposed by Transpower, Genesis and - at a late stage - Energy Minister Simeon Brown, who all argued it could create risks in a dry year if Meridian had already drawn down the additional water.

However, Meridian said being able to access its contingency storage more easily would lower wholesale electricity prices and allow it to plan generation more efficiently.

It has previously said it was unlikely to ever use the full contingency, but every extra metre of available water would ease the pressure on energy generation during dry winters.

Modelling in the fast-track referral documents showed the proposal could release enough energy to power 75,000 homes and reduce wholesale electricity prices by about seven percent, by removing uncertainty over when Meridian could tap into its backup water storage.

The draft decision comes despite Brown asking the panel last month to turn Meridian's proposal down, arguing that it would weaken, rather than strengthen, the country's dry-year energy security.

In a late comment provided to the panel, the minister said if Meridian was granted access to water currently held in reserve, "it would reduce the volume reserved for rare but critical periods of system stress".

The proposal attracted similar concerns from Genesis Energy, which told the panel the proposal would create "a nationally significant increase in system risk due to the loss of the contingent storage to the system".

Genesis was also concerned about knock-on effects on its Tekapō B power station, which is part of the wider Waitaki hydro system.

Transpower and the Electricity Authority were at odds, with Transpower opposing it for similar reasons to Genesis and Brown.

Lake Pūkaki

Photo: Supplied/Meridian

The Electricity Authority, however, said it would result in more competition and therefore, cheaper prices for consumers.

It believed the proposal would create more system reliability.

"Allowing Meridian the option to use Pūkaki contingent hydro more readily, means the system has more risk management options available."

Meridian chief executive Mike Roan

Photo: Meridian Energy

Meridian chief executive Mike Roan said the gentailer respected and appreciated the views of those concerned about the effect on contingent storage.

"Given the responses of other submitters, we've said we will only operationalise half of the contingent storage range [in 2026] so that some of it can remain there for security purposes."

The company planned to talk to other industry players about how that would work in subsequent years, Roan said.

However, Meridian wanted to provide "a win for consumers".

"In releasing a little more water to make electricity, it means we'll use a little less coal. Because coal's more expensive than water, the wholesale price for electricty will come down."

Retail prices were based on expected wholesale prices, so the savings would flow through to consumers, businesses and industrial users, he said.

"We thought [the savings] would be upwards of $400 million a year, so big numbers - that's what the motivation was for us."

The black stilt (kakī)

Photo: Supplied / Department of Conservation

A wide array of others invited to comment have raised environmental concerns about the proposal, including the Department of Conservation and Canterbury Regional Council.

Both organisations were particularly concerned about the effect on wetlands and the species they provide a habitat for if the lake levels were lowered.

The fringes of the lake are home to the black stilt (kakī), which is critically endangered in New Zealand.

The draft approval included a raft of environmental conditions that must be met, including building and maintaining a "lizard exclusion fence" to protect native lizard species from rock works that will be carried out as part fo the project.

Earl Bardsley, a hydrologist and associate professor at the University of Waikato, previously told RNZ the option to dip into the lake would cause up to a 20 percent reduction in the lake's size, exposing 35 square kilometres of lakebed.

The fast-track panel is required to release its final decision by 3 July.

Simeon Brown's office has been approached for comment.

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