Dipping into Lake Pūkaki: Locals and experts conflicted over Meridian Energy proposal

Meridian Energy is seeking new leeway over the country's largest hydro lake, in a proposal that has locals and experts conflicted.

The gentailer wants permission to draw Lake Pūkaki down to lower levels than usual - from 518 metres above sea level to 513 - for up to three winters in a row, without needing special approval from Transpower.

It secured referral to the fast-track process in August and said it would carry out a full socio-economic impact assessment as part of its full application.

It was also seeking to reinforce the Pūkaki Dam with rock armouring to handle lower water levels.

Meridian said it would 'rarely' need to access contingent storage, "and most likely only a fraction into the available amount".

However, modelling in the fast track referral documents showed the move 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, letting it plan generation more efficiently.

The company's general manager of development, Guy Waipara, said the change would reduce the impacts of future droughts by ensuring a steady supply of electricity for New Zealanders.

"Over the last couple of months, we've seen how healthy levels in the hydro storage lakes contribute to lower wholesale prices. We've calculated that freeing up access to contingent storage is likely to save wholesale purchasers of electricity approximately $500 million a year by reducing the need for the system to rely on expensive thermal fuels," he said.

For Mt Cook Lakeside Retreat co-owner Kaye Paardekooper, fluctuations in the lake level were nothing new.

However, she wanted to know what the proposed changes would mean for tourism and aquifers, and said Meridian needed to be frank with residents.

"We're in two camps. We realise how important the power is for New Zealand, and we're very much into sustainability so we recognise that hydro, it's actually a very clean energy that's being generated," she said.

"I would love to see a visual - to see 'this is what it looks like now, this is what it's going to look like'. It'd be good to have more information, even if it's fast-tracked. As a responsible neighbour - we see Meridian as our neighbours - it'd be nice for them to talk to us."

Experts caution lake could shrink by a fifth

Earl Bardsley, a hydrologist and associate professor at the University of Waikato, said the option to dip into the lake would give Meridian a buffer during dry years - especially with the country running out of gas "fairly unexpectedly".

However, he estimated that if Meridian dropped the lake to the minimum 513 metres, it would cause a 20 percent reduction in the lake's size compared with the existing permitted drawdown, exposing 35 square kilometres of lakebed in total.

He said he would not want to see the measure become long-term.

"There'll be a big visual impact, and that's not desirable by any means, but we're getting to somewhat desperate times," he said.

Earlier this year, the government declined Contact Energy's fast-track referral application to lower Lake Hāwea's operating range.

Bardsley said Meridian's application was different because Lake Pūkaki was in a relatively unpopulated area.

"Pūkaki is the major hydro storage lake in New Zealand, so it's really geared towards hydro storage. If you had to choose one lake to get something done quickly, you would probably choose Pūkaki. You wouldn't choose Hāwea, because there are all kinds of implications with the community."

Environmental questions

Meridian's experts believed the environmental effects could be kept minor - but in fast-track referral documents, government agencies and councils suggested more information was needed about the impacts on native lizards, black stilts and lakeshore plants.

Commenting on Meridian's referral application, Transpower said there was merit in the company having greater flexibility to access some of the contingent storage.

However, the national grid operator described it as a "complex" issue.

Transpower executive general manager of operations Chantelle Bramley told RNZ that if contingent hydro storage was used faster or earlier than necessary and it did not rain, New Zealand could run out of energy very quickly.

Contingent storage played a critical role as the country's fuel of last resort, she said, especially during extended dry periods such as last year's.

For Meridian's Guy Waipara, though, last year's dry period was a key example of why the company needed easier access to contingent storage.

"Meridian is already authorised to utilise Lake Pūkaki from 518m down to 513m, but currently this is controlled by Transpower. During the energy shortage of Winter 2024 we found that by the time approval came through we no longer needed to access that water," he said.

'Band-Aid' fix

Environmental Defence Society chair Gary Taylor argued Meridian's move to dip into contingent storage was underpinned by wider structural problems.

"The electricity market is not delivering a package of renewables that's workable quickly enough. And so we're having to do these Band-Aid fixes as we go along. I think the problem with the market is it was designed in a different era - climate change and pushing hard on renewables wasn't part of the objective and it's now out of date. It needs a fundamental reset so that we can build renewables faster," he said.

He said the fast-track process was too superficial and did not give serious thought to the implications of dropping the lake by up to five metres.

Meridian should offset any loss of biodiversity or landscape with "robust" compensation, he said.

"Meridian has got plenty of resource to do that. What it's proposing to do is to take what is essentially free water, to increase its profits. It needs to come up with a properly sized compensation package - and that might involve putting more effort into ridding the Mackenzie Basin of wilding pines, for instance, which are ecologically damaging. There are a number of things that they could do."

Company says lower lake levels 'highly unlikely'

In a statement, Waipara said Meridian had applied for a three-year timeframe while new electricity generation and battery storage were built "and more robust long-term security settings are developed".

"The sudden decline of gas as a firming fuel has put additional pressure on New Zealand's electricity industry, and like others we have had to increase the size of our investment over the coming years and think more broadly about how we produce electricity. We've invested more than $1 billion in the past five years, and we have a further $2 billion of investment planned over the next three years," he said.

Asked about the potential environmental implications, he reiterated that contingent storage would only be accessed "when the country really needs it and most likely only a fraction of the available amount".

"We care deeply about the wellbeing of native wildlife in the Waitaki Basin. Meridian is working closely with DOC and other partners in the Waitaki Valley through Project River Recovery, which preserves flora and fauna in braided river habitats in the Upper Waitaki Basin."

Waipara said the application was about "easier access, not access to new depths".

He said none of the company's modelling showed lake levels reaching the minimum level of 513 metres above sea level.

"While access to contingent storage may result in the lake being taken below 518 metres, it's more likely that over the three years of access, that storage will not be used."

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