The leading proponent of the scheme at Lake Onslow, Earl Bardsley, of the University of Waikato’s science and engineering faculty, agrees.
Labour yesterday pledged an additional $70million into a potential dry year pumped hydro storage solution at Lake Onslow in the Teviot Valley.
The announcement came as Labour yesterday pledged to bring forward its goal of 100% renewable electricity generation by five years to 2030.
The spend is subject to the $30million business case the Government announced in July.
Central Otago Mayor Tim Cadogan said yesterday in addition to the Government’s business case, Labour’s commitment to inject more money should the case prove feasible suggested it was serious about giving Lake Onslow a "broader look".
"The Teviot Valley and Central Otago community need to take a look at what this would mean."
If the business case stacked up, the $4billion project would be New Zealand’s biggest infrastructure project since the Think Big projects of the 1980s.
Prof Bardsley, who first mooted the project in 2005, said the business case was sound.
He doubted the Government would have committed $30million to look at dry year options unless it had done preliminary work to check there was a good chance of proving a successful business case for the best option.
"It’s hard to see that could be anything other than Onslow, particularly since they have now committed to a 2030 deadline for 100% renewable power."
However, Lake Onslow was essentially energy-neutral, meaning it was not the key ingredient to reaching that goal.
"It would result only in a small indirect power gain through reduced spill loss in existing hydro stations.
"Even allowing for Manapouri power [to be fed back into the national grid following the closure of the Tiwai Point aluminium smelter], the 100% renewable requirement would most probably require all presently consented wind farms to be developed quickly, and certainly not have the consents lapse."
That might provide some incentive for rapid wind farm development, he said.
"At the other end of the price scale, the high electricity prices associated with dry years would be avoided when Onslow was operational, which would tend to lower prices overall to the advantage of all consumers."
Labour announced the $70million would be allocated upfront to accelerate the second stage of the potential project.
Labour energy and resources spokeswoman Megan Woods said projects such as pumped hydro at Lake Onslow would be joined by other smaller schemes to bring forward Labour’s target of 100% renewable electricity generation five years to 2030, with a review at the 2025 emissions budget.
The Onslow plan is one of a raft of energy measures Labour is pledging.
National Party energy spokesman Jonathan Young said Labour’s initial goal of 100% renewable energy by 2035 had been described by the party itself as "aspirational".
"To bring that forward five years ... no-one in the energy sector believes that won’t come without huge costs."
An interim climate change committee report had already labelled the policy as the "wrong goal" and the cost of the policy would ultimately be passed to consumers, he said.
Onslow was a $4billion-$6billion project and that money would have to be borrowed on top of "massive debt" as the country faced the worst economic crisis in 60 years, he said.
"It is out-of-step."
