The Government’s goal of 100 per cent renewable electricity generation by 2035 was brought closer today as it was announced $30 million will be spent investigating greener energy storage solutions.

Megan Woods, includes looking at a pumped hydro scheme which uses water to manage peak demand.

A key location being explored is Lake Onslow near the Clutha River in Southland.

“If a business case stacks up pumped hydro would be a game changer for securing sustainable, cheaper, low-emissions electricity for the long term,” Ms Woods said.

“This would be transformative for our energy system, and we would no longer be reliant on fossil fuels for meeting our electricity demand.

“Pumped hydro moves water to an upper reservoir when there is surplus renewable energy generation and demand for electricity is low. It is released back down to a hydro power station to generate electricity when demand is high.

“It works like a battery because the stored energy in the water is released when it is used in the hydroelectric dam. This opens up huge possibilities for cheaper electricity and increased supply.”

Ms Woods says the project could “create thousands of jobs, make wholesale electricity cheaper in the long run, and it would decarbonise the grid as we wouldn’t have to rely on coal and gas to make electricity”.

She said it would be a “game changing” asset for future New Zealanders and would be the “single biggest infrastructure project since the 1980s”.

“That’s why it’s important to get certainty on the costs, logistics and any environmental impacts of what would be a game-changing, long-life asset for many New Zealand generations to come,” Megan Woods said.

Ms Woods also announced a further $70 million investment to increase electrification of industrial and process heat in the lower South Island, with transmission line upgrades, and direct support to industrial users to convert their coal boilers to electricity.

The potential closure of Tiwai Point’s aluminium smelter provides a near-term opportunity to use some of that electricity for switching out coal boilers to low emission options.