BEFORE A SPECIAL TRIBUNAL AT NELSON

UNDER of the Resource Management Act 1991

IN THE MATTER an application for a water conservation order by Ngati Tama Ki Te Waipounamu Trust and Andrew Yuill in respect of Te Waikoropupū Springs and associated water bodies

STATEMENT OF EVIDENCE OF PETER BRYAN LILLEY ON BEHALF OF TRUSTPOWER LTD

5 APRIL 2018

Counsel Instructed B J Matheson Richmond Chambers PO Box 1008

Shortland Street Auckland 1140

2

Trustpower Ltd

1. EXECUTIVE SUMMARY

1.1 Hydro-generation facilities such as the Cobb Scheme are long-life assets operating and evolving over many decades. As such they need to be flexible to respond to changing drivers, including: changes in energy demand, potential alternative uses, and the impacts of climate change. All these drivers are external to the Scheme and are often challenging to quantify in to the future.

1.2 The Cobb Scheme influences flow in the Takaka River, and therefore the Te Waikoropupū Springs, through the way it uses storage to regulate flow for generation purposes. Overall this regulation increases the availability of flow that contributes to the recharge of the aquifer that feeds the Springs. The Scheme can reduce recharge into the aquifer if it operates at low output for extended periods. The physical presence of the Scheme does not directly influence aquifer recharge or flows at the Springs.

1.3 To effectively respond to future change, it is likely that the Cobb Scheme will need to be modified from time to time, both operationally and physically. The nature of many enhancements and upgrades required to meet these changes is that they are largely undertaken within the physical and operational footprint of the scheme. In turn these will generally have minimal influence on river flow downstream and hence the Springs.

1.4 More significant enhancements that may be necessary, particularly those that extend or are beyond the existing scheme footprint, would be expected to be progressed via a process of assessment, feasibility and the gaining of all necessary permissions. Even these are unlikely to measurably influence flows downstream, and, where they might induce adverse effects, can expect to have appropriate controls applied.

1.5 Climate change will induce modifications to how the Scheme operates within its existing configuration. Physical modifications to the Scheme may also be needed in response to climate change and these could induce changes in river flows. These changes in river flow however would be in direct reflection of the effect of climate change and so will occur one way or other irrespective of scheme modification.

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2. INTRODUCTION

Experience/qualifications

2.1 My name is Peter Bryan Lilley. I am an independent consultant providing services in water planning, management and optimisation

2.2 Prior to April 2017 I was Trustpower Limited’s (Trustpower) Acting Generation Manager, a position that had overall responsibility for the organisation’s generation assets, including their performance and safe operation. Prior to this position, I was employed as the Generation Strategy Manager, responsible for the optimisation and enhancement of Trustpower’s existing hydro-electric generation assets and the development of new schemes.

2.3 I hold the qualification of Bachelor of Engineering (Civil) from the University of Auckland (1989) specialising in the areas of catchment hydrology, river hydraulics and water resource engineering. I am a member of the International Water Resources Associate (IWRA) and New Zealand Society of Large Dams of which I am the immediate past Chair.

2.4 Prior to joining Trustpower in June 2000, I was an Associate of Riley Consultants Ltd, a firm comprising specialist Water Resources and Geotechnical engineering consultants. My experience over this time consisted of safety evaluations of dams and associated structures, hydrological analysis and scheme optimisation and enhancement investigations.

Prior involvement in process

2.5 I have not been involved in any aspect of this WCO process, prior to preparing this statement of evidence. I was, however, involved in the latter stages of the re-consenting of the Cobb hydroelectric power scheme (Cobb Scheme) as this process coincided with the purchase of the Scheme by Trustpower.

Code of Conduct

2.6 I have read the Environment Court's Code of Conduct and agree to comply with it. My qualifications as an expert are set out above. I confirm that the 4

issues addressed in this statement of evidence are within my area of expertise.

Scope of Evidence

2.7 I understand that Trustpower is seeking amendments to the wording of the proposed WCO, in order to provide for the long-term operation, maintenance, upgrade and potential new works/enhancements associated with the Cobb Scheme.

2.8 To respond to that request, my evidence is structured as follows:

(a) the brief history of the Scheme;

(b) Scheme operation within the river hydrology, including effects of the Scheme on Te Waikoropupū Springs (Springs);

(c) the requirement for flexibility to address future changes and needs;

(d) possible enhancements that the Scheme may require; and

(e) how these enhancements might be undertaken.

3. SCHEME HISTORY

3.1 The Cobb Scheme is located on the Cobb River, a tributary of the Takaka River, some 45km from the Takaka River mouth.

3.2 The Scheme was built between 1935 and 1944, initially as a run of river development without significant storage. The Cobb Dam, that forms the Cobb Reservoir, was constructed between 1949 and 1954 with the lake filled in 1955. The Cobb Reservoir is an “in stream” storage that is, apart from the dam structure at its downstream limit, retained by the natural valley walls.

3.3 The overall footprint of the Scheme has remained largely unchanged since this time, however numerous upgrades have been undertaken within the Scheme footprint.

3.4 The Scheme has an operating head (difference in elevation between the reservoir and power station) of some 600m. This is the highest head of any individual hydro station in New Zealand. This means it uses the least volume 5

of water for every unit of energy produced, producing 32MW of output, from a flow of only 7.5m3/s.

3.5 The Cobb Dam and reservoir are located within the Kahurangi National Park and provides the storage for the Scheme allowing it to regulate inflow to meet energy demand. The catchment that feeds the Scheme is a modest 70.7 sq km and is largely covered by forest & Scrub (52%) and Tussock (43%).

3.6 The Cobb Reservoir, when full, is approximately 6.5 km long, and has a relatively constant width of around 400m. It has a 14.6m operating range, defined by resource consent,1 but more typically operates within a range of 10m. It has a surface area at full operating level of 210Ha. The operating volume within the Cobb Reservoir is 26Mm3 which equates to 54 days of average inflow (5.5m3/s) or 15% of average annual catchment yield.

4. SCHEME OPERATION WITHIN THE RIVER HYDROLOGY

4.1 The Scheme produces on average 185 GWh (gigawatt hours) of energy per annum, equivalent to the energy use of 23,000 homes. Without the regulating (buffering) effect of the reservoir this would reduce to 135 GWh, a reduction in energy equivalent to the energy use of 6,200 homes.

4.2 Natural inflow exceeds the capacity of the station approximately 20% of the time. Without the reservoir, the station would spill water that exceeds the station capacity, resulting in less energy being produced. On average this would equate to between 30 and 35% of the annual volume yield from the catchment not being used for energy production. With the storage available within the Cobb Reservoir, only 10% of annual volume yield is not able to be utilised for energy production. The reservoir therefore greatly enhances the flow capture efficiency of the Scheme.

4.3 While the Scheme, and in particular the Cobb Reservoir, significantly regulates flow in the Cobb River, its effect on hydrology is diminished, but still evident, further down the river. This is due to the influence of un- modified flow in the main stem of the Takaka River and numerous tributaries that join downstream of the Cobb reservoir.

4.4 Flow in the Takaka River is recorded at the Harwood’s gauging site, some 11km downstream of the confluence between the Cobb and Takaka Rivers (approximately 31km from river mouth). At this site the River has a

1 Resource Consent, NN000445, To dam the Cobb River 6

catchment area of 260 sq km and mean flow of 14.3m3/s. This location is also where the Takaka River emerges from the steep sided gorge reach of the upper catchment out on to the wider valley with river terraces formed from aggradational river gravels.

4.5 A further flow site is located at Kotinga only 7 km upstream of the river mouth. This site represents a catchment area 713 sq km, 80% of the total catchment area, and has a mean flow of 31.4m3/s. Key features of the river catchment are provided on Figure Z taken from the application for resource consent for the Cobb Scheme (2002).

Figure 1 7

4.6 There are two main ways the Scheme modifies river hydrology. Firstly, the storage captures a portion of high flow for later release (via the station) when natural flows are moderate to low. This influence is demonstrated on Figure 2. This shows how a significant portion of the natural inflow to the reservoir (blue line), when above 7.5m3/s, is regulated and released at moderate flows ranging from 1.0 to 7.5m3/s (red line).

20 18 Inflow: Cobb Reservoir 16 Outflow: Cobb Reservoir 14 /s)

3 12 10 8 Flow Flow (m 6 4 2 0 0% 20% 40% 60% 80% 100% % Time Flow is Exceeded

Figure 2

4.7 The second influence on hydrology arises from the fluctuating discharge from the station as it responds to the energy market. Once a generation station is offered in to the market by the owner, it is then the market operator, not the owner, that determines when the station will operate. The market operator is in turn responding to demand for energy that is primarily driven by the end user.

4.8 An example of the variable output from the Scheme is provided in Figure 3. This period has been chosen as it shows: a period of only occasional generation (left third); variable generation (mid third); and predominantly high generation (right third). There is no minimum operating limit required in the resource consents. 8

35 Example: Cobb Generation 30 25 20 15 10 5 0

Figure 3

4.9 The Takaka River is one of the significant sources of recharge to the aquifer which in turn supplies Te Waikoropupū Springs. Other sources include tributaries and direct rainfall landing on the unconfined portions of the aquifer.

4.10 Flow in the Takaka River begins to be lost to groundwater from below Harwood’s (31km from river mouth), however the loss is greatest over a 10 km reach of the river, from Lindsay’s Bridge (23 km from river mouth) to the confluence with Spring Brook (13 km from river mouth). Over this 10km reach of river up to 9.6m3/s of river flow is lost to the aquifer with an estimated average annual loss of between 5.9 and 8.6m3/s.

4.11 The loss to groundwater is significant in terms of the portion of river flow. Losses frequently exceed river flow meaning all river flow drains in to the aquifer and sections of the riverbed are therefore commonly dry.

4.12 This phenomenon is particularly evident in summer months when river flow is naturally low. It occurs when river flow is typically less than 9.6m3/s at Lindsay’s Bridge, however it is also a function of aquifer level at the time. The drying reach will increase in length as flows drop further below 9.6m3/s.

4.13 Operation of the Scheme changes flow in the river and hence can change the rate of recharge to the aquifer, and the length of riverbed that dries out. Modelling undertaken as part of the resource consent process for the Cobb Power Station (2002) determined that operation of the Scheme increased the flow from the Springs by, on average, 2.0 m3/s with the gain ranging from 0.9 to 2.5m3/s for individual months. 9

4.14 This increase in flows from the Springs arises from the regulating influence of the reservoir whereby short periods of high flow (freshes and floods) are stored and released over longer periods at moderate flow. When flow in the river is less than 9.6m3/s at Lindsay’s Bridge, releases from the Scheme reduce the length of riverbed that will dry out.

4.15 The corollary is also true. Namely, if the Scheme is not operating for extended periods it can reduce flow in the Springs. The same modelling indicated that a period of 60 days of low Scheme output (operating at 1.0m3/s or 13% or capacity) would reduce spring flow by 0.35m3/s compared to natural conditions.

4.16 The influence the Scheme has on flow in the Springs is therefore limited to the way the Scheme regulates the flow in the river downstream. No direct impact on the Springs has been identified arising from the physical presence of the Scheme including from the existence of the reservoir or from any fluctuations in the level of the reservoir over time.

5. THE NEED FOR FLEXIBILITY

5.1 Electricity derived from hydro-generation, that has storage, is one of the most flexible forms of electricity. Historically hydro-generation in New Zealand provided the “on-demand” portion of energy to match supply with demand. It is impractical to store electricity except on a small scale. Water stored in reservoirs, for use when demand requires, is an efficient “battery” to both match supply with demand and to avoid additional energy conversion losses (eg losses to charge and then use energy from batteries).

5.2 Flexibility from hydro-generation is as, if not more, important today. This is evidenced by how frequently generation units (turbines) start and stop in response to changes in demand, being some 10 times more frequent today than 15 years ago.2 Mr Spearman provides in his statement of evidence details of how the Scheme directly benefits the area from an energy supply and security viewpoint.

2 Based on data from Coleridge Power Station. 10

5.3 While today there is increased diversification in electricity supply (eg geothermal, wind, gas) there are several factors that emphasise the need for flexibility in hydro-electric generation.

(a) Firstly, the use of energy is continually evolving. Increases in commercial and services-based industries, and at the same time less heavy industry, is shifting energy use from sources such as coal to electricity. Private air-conditioning, agricultural irrigation and tourism industries, are all increasing electricity use particularly during the historically low demand summer periods. In some regions of the country, peak demand now occurs in summer rather than winter.

(b) Secondly, the increase in generation from wind, and more recently solar, is introducing a significant portion of uncontrolled and often unpredictable supply to the market. The volatile nature of energy output from these renewable energy sources needs to be balanced through comparative changes from other sources. Of these other sources, hydro is typically the most flexible in providing this balance.

(c) At the same time as new uncontrolled sources are increasing, older “base load” thermal generation such as coal and oil are being phased out. These historically provided the “energy battery” for matching seasonal energy demand. With less contribution from such sources, hydro generation storage becomes increasingly important.

(d) Greater volatility of rainfall and river flow induced by climate change is expected, and in some situations is already evident. This will drive the need to modify operational as well as physical aspects of existing hydro schemes.

5.4 It is always challenging to predict how any scheme may operate in the future. It is however almost certain that the demand for flexible operation from hydroelectric stations, particular those with storage, will remain, if not increase, over at least the next 2 to 3 decades and probably beyond. Some important drivers for this need include: 11

(a) An ongoing increase in supply from uncontrolled renewable energy sources (ie, wind, solar).

(b) Ongoing increase in air-conditioning and refrigeration load as climate change induces higher temperatures and humidity.

(c) Ongoing migration to more efficient and targeted irrigation systems (less water use) that are both more energy intensive and variable in demand.

(d) Uptake of electric vehicles and transport systems which will increase the demand for electricity

(e) Migration of industry from non-renewable to renewable energy sources.

(f) Alternative uses of stored water

5.5 Because the supply of electricity, and in particular that derived from hydroelectricity, is responding to, rather than driving the need arising from these changes, modifications to how a scheme may operate in the future are difficult to predict. Changes may occur gradually over time or relatively quickly, and such changes may be for just a period of months or may persist for many years.

6. POSSIBLE ENHANCEMENTS THAT THE SCHEME MAY REQUIRE

6.1 The following section discusses the potential enhancements and changes that are, within reason, possible at the Scheme. These are advanced based on their potential need - from an energy supply perspective or alternate need, and are all physically possible. Except when these works are already provided for in the existing consents, no consideration has been given to the acceptability of these enhancements on environmental, social, cultural or economic grounds. It is presumed that any such modification would need to meet the appropriate legal and planning tests (eg RMA and any operative WCO), as well as being financially feasible.

6.2 The need for flexibility, driven by future changes in the supply of, and demand for, electricity will impact how the Scheme operates within its 12

current configuration. It may also induce the need for physical changes to the Scheme.

6.3 The normal maintenance and replacement cycle will also induce physical changes to the Scheme. These often arise from new or changing technology and component efficiency, or from improvements in industry practices such as dam safety management. Hydro-generation assets are very long lived with many examples (including in New Zealand) of schemes continually operating for over 100 years. Trustpower owns and operates for example, the Waipori Scheme (near Dunedin) and the Coleridge Scheme (near Christchurch) both of which are over 100 years old with ongoing operation expected for many more decades to come.

6.4 There may also be the changes arising from the need to operate the scheme for non-energy purposes to meet other economic, social, cultural or environmental aspirations. For example, the Coleridge Scheme operates for both hydro-electric and irrigation storage purposes. The additional use for irrigation was including in to the Scheme’s operation only 5 years ago.

Increased Capacity

6.5 One of the most likely enhancements to the Scheme is increasing its capacity (ie maximum generation output). This was recognised at the time of consenting with the maximum take from the reservoir being 10m3/s compared to the current physical capacity through the station of 7.5m3/s.3

6.6 For reasons discussed earlier, as more energy is derived from uncontrolled renewable sources there will be a need to increase the capacity derived from controlled sources such as hydro. This is more about ‘on demand’ supply capacity rather than energy volume (in other words, it is about supply being available at any point in time, rather than the total amount of electricity able to be generated). This could of course be achieved by building new reservoirs and associated generation facilities, however this will have a high relative cost. Firstly, the better sites have already been developed, and secondly, any such development will induce a full range of associated impacts and other

3 Resource Consent NN000446, To take and divert water at a maximum rate of 10 cumecs. 13

environmental effects. As a general rule, enhancing existing facilities will be less costly and have a lower relative impact/less adverse effects than new facilities.

6.7 It is also possible that increased capacity may be driven from a need to supply alternative or complementary uses (eg irrigation, recreation etc). Once again, development of new storage is costly and challenging. Re- utilisation and multi-use of existing storages can be a more effective, efficient and environmentally-acceptable approach.

6.8 Climate change may also drive a need to increase the Scheme’s capacity, both in terms of generation, but also flood management. If this is not undertaken the Scheme may not be able to actively regulate as much of the catchment yield and there will be implications for safe operation of dams and associated structures.

6.9 Increasing the Scheme capacity will increase the magnitude of short- term flow fluctuations downstream. It will also increase the regulating or buffering effect of the reservoir. The increase in capacity means that the storage can be emptied faster after being filled by high inflows, and hence be available to capture more of a subsequent high flow event. The combined impact of these two aspects are likely to have a slight positive impact of flow from the Te Waikoropupū Springs due to more flow being shifted from times of high flow, to times of low to moderate flow.

6.10 Modifications to the capacity of the Scheme that might arise in response to climate change may induce changes in flow downstream. These changes however will be a direct reflection of the effects induced by climate change and will occur in some form or other irrespective of the Scheme capacity and operation.

Increased Storage

6.11 Another potential enhancement at the Scheme is increasing the capacity of the reservoir storage. It is physically possible to raise the operating level of the lake. Depending on how much the level was raised would determine if physical alterations to the structures were; only modest (eg minor changes to the spillway gates) or significant (eg raising the 14

dam). Demand for increased storage could come from the need for more energy security or equally from an alternative use (eg irrigation).

6.12 Increasing the storage would in turn increase the regulation of flows within the Cobb River and further downstream. There would be an increased capacity to capture high flows and hence more flow released at low to moderate river flows that predominantly have a beneficial impact on flow in Te Waikoropupū Springs.

Additional Diversions in to the Cobb Reservoir

6.13 Inflow to the Scheme could be increased through diversion of adjacent catchments. For example, Diamond Lake Stream, a tributary of the Cobb River and located to the north of the Cobb Reservoir, could be diverted into the Scheme.

6.14 Additional diversions will increase the volume of energy produced by the scheme on an annual basis. It will also increase the area of catchment, and associated flow, regulated by the Scheme.

6.15 Diversion of flow does not modify downstream flow as much as an in- river storage such as the Cobb Reservoir. This is because they will have a limited design capacity above which excess flow will remain within the river. They will still however shift a portion of flow (ie up to their design limit) from higher flow events (freshes, floods) for release from the storage during low to moderate periods of flow. It is anticipated that overall any such development would increase the potential recharge in to the aquifer but this would be proportionally less than for the existing Scheme.

Mini Station

6.16 Potential exists to add additional generation capacity immediately downstream of the existing station discharge. This would be in the form of a mini-generation facility and would simply run in series with the main station. Such a development will not modify flow downstream beyond the immediate footprint of the development.

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Pumped Storage

6.17 Pumped storage schemes are a means by which energy produced at times of low demand is “consumed” by the scheme through pumping, for later “release” when demand is high. They are therefore a form of energy battery. Historically they have been primarily developed where there is a high level of base load thermal or nuclear energy that produces periods of over supply (eg night time). They have therefore not been actively pursued in New Zealand where flexible hydro dominates.

6.18 As already noted, in the future, with increased uncontrolled renewable energy (wind, solar) there is likely to be a need for more storage. One option for achieving this is pumped storage where a given amount of water is cycled through storage many more times than one time that would occur normally.

6.19 It is physically possible to undertake such a development at the Cobb Scheme. Any such development would not change the volume of water entering or leaving the Scheme as the pumped storage facility would be a closed-circuit development largely embedded within the existing footprint of the Scheme. As such, beyond any impacts arising from any associated increase capacity or storage as discussed above, it is unlikely that a pumped storage facility would induce any impacts on river flows downstream of the existing scheme.

Equipment Upgrade

6.20 Replacement of equipment, in particular turbines and generators will occur in the future, as it has in the past. Often replacement will come with an increase in efficiency. For example, upgrades to the existing turbines, undertaken by Trustpower in the last 10 years, has increased efficiency at the Scheme by 2-3%.

6.21 Increases in efficiency, derived from replacement of scheme components, are generally modest in scale. Hydro-electric generation stations typically have relatively high efficiency4 and as such incremental gains are usually relatively small. Therefore, they will have minimal impact of river flows downstream.

4 > 80% conversion of available energy to electrical energy. 16

7. HOW ENHANCEMENTS MIGHT BE UNDERTAKEN

7.1 Potential upgrades and enhancements fall in to two broad categories in terms of how they are considered, assessed and ultimately progressed or not.

7.2 Many can be undertaken predominantly within the existing footprint of the Scheme and will have little or no impact on river flows beyond that footprint (eg turbine upgrades, operational improvements). These will also largely be undertaken within the scope of the existing resource consents that control how the Scheme operates. Some short-term changes to how the Scheme operates may be associated the implementation of these types of enhancements. Such changes would still be within the existing operational envelope.

7.3 The exception would be an increase in scheme capacity which, as discussed, would induce some changes downstream. As also discussed above a small increase in capacity (2.5m3/s) is provided for in the existing resource consents for the Scheme.

7.4 Other enhancements would involve additional physical assets, including outside of the existing scheme footprint (eg increased or additional storage, pumped storage). These would be advanced though a process that includes as a minimum: determining feasibility, assessing effects and seeking all necessary approvals. While these types of enhancements will have direct impacts in and around where they are developed, it is unlikely that impacts would extend downstream of the existing scheme or if they did, could be managed by appropriate conditions of consent.

P B Lilley

5 April 2018