Onslow cost

It was obvious from the start that Lake Onslow was a bad idea. 

Energy News reports on the latest:

A recent Infrastructure Commission technical paper concluded that the proposed Lake Onslow pumped hydro scheme can’t provide New Zealand with a cost advantage until 2037.

It also found that any advantage it does provide won’t be long-lasting “unless the cost to build it is substantially below $10 billion”.

That was before Energy and Resources Minister Megan Woods announced via a Cabinet paper that the P50 cost estimate – a mid-range probability – for Onslow would be $15.9 billion.

She concedes that neither Onslow nor the New Zealand Battery Project’s alternative portfolio option meet standard value-for-money criteria.

“Both have large capital costs early in their lives, with benefits realised over a long horizon,” she writes in a recent Cabinet paper.

“However, it is clear that the options could make a significant contribution to addressing New Zealand’s dry-year problem and providing a secure and decarbonised electricity system.”

I wish iPredict were still here so we could bet on whether this thing goes ahead. It clearly shouldn't. But government's spending a few hundred million on the darned feasibility study and governments have a hard time dealing with sunk cost issues.