Clyde dam needed, says Electricity Division

Press, 25 September 1982, Page 2

Clyde dam needed, says Electricity Division

Parliamentary reporter The Clyde high dam was needed to ' maintain target energy margins even if the second aluminium smelter was not built, said the report of the Electricity' Division of the Ministry of Energy to the select committee on the, Clyde dam. • The report, which was considered by the committee on Thursday . evening, commented on arguments put forward in submissions to the committee. ' The report said the submissions fell into three main categories: those which supported the dam because of •‘its benefits to the Otago region, those opposed to the legislation on constitutional grounds, and those opposed to the dam for technical or economic reasons. "Exaggerated” assertions about the amount of spillage over a high dam, which were made in some of the techni- ■ cal submissions, were not borne out when the assumptions were investigated, it said. The uncertainty in load forecasting, hydro inflow; and power station commissioning dates had to be taken into account. The construction of the Clyde power station, and the retention of a skilled labourforce, was essential to provide the power system with the ability to respond to changes in the future. This was particularly so when expected problems with coalmining were considered. “With pressure on New

Zealand's traditional farmbased exports, the ability of the country to provide energy for industrial activities is to the benefit of everyone,” the report said. Commenting on submissions which favoured a low dam instead of a high dam at . CJyde, the report said that it would take two years longer to commission a low dam. as no design work had been done. The estimated cost of producing electricity from a high dam was 4.33 c kWh in March, 1982 terms. For a low dam the cost would be 6.33 c. Taking the delays into account, the-cost would be 7.8 c. The report defended the Ministry of Energy’s ■methods of electricity forecasting, which were critic- ' ised in several submissions. “Like every utility throughout the world, the Electricity Division was caught out by the effects of the oil crisis in 1973. Until that time the annual growth in electricity demand was about 7 per cent per annum." it said. After this, demands slackened. This meant generating plant programmed in the early 1970 s showed an “apparent" over-capacity. Before 1973, demand forecasts were, reasonably accurate. Since then the growth had been extremely difficult to predict, so there had been a period of high forecasts. Because of the lack of long-term storage in the South Island, about 86 per cent of the water available

was used for electricity generation. This compared with 97' per cent in the North Island, because of the control of Lake Taupo with its huge storage capacity. Because, of the lack of control at the head lakes in the South Island, about. 3000 ' GWh of potential energy would be spilled to waste each year. Figures up to 1994, when a new Cook Strait cable had been proposed, showed that the dam would produce about 700 GWh of electricity that would be extra capacity. This margin could be taken up if inflows in a dry year were 96 per cent of the expected average or by the addition of a medium-sized industrial development in the South Island, said the report. Of the Planning Tribunal's decision to decline the waterright application, because there was not evidence of an end use for the power, the report said that that was an unsurmountable.problem because of the lead time needed for power projects compared with industrial projects. The investigations for development of the Upper Clutha began in the 1960 s and the first power station would be commissioned 20 years later. Even when all consents had been gained, it would take seven or eight years to commission a station from the time it was given Government approval. “Contrast this with the time taken to get a major industry into production, say

four or five years, and the impossibility of proving the need for a power station becomes obvious,” it said. Submissions which supported the dam - had commented on the benefits from irrigation and from the potential for industrial development The Clyde Fruitgrowers’ Association had suggestedthat a low dam at Clyde would have changed the micro-climate in the Cromwell Gorge. The higher water-table would cause root damage to the trees. The early-apricot market was under attack from apricots produced in Hawke's Bay and Blenheim.