The 'idyllic' community being eaten away by the electricity market

Friday, 24 March 2023

A ‘living wall’ at Kuratau, meant to protect against erosion, lies in tatters.

Lake Taupō has already consumed millions of dollars of public land. It’s coming for a sewage line, a road and – inevitably – houses. Some locals say cutting off a state-owned power company may help save their homes before it’s too late, but the company says doing so would put the country’s energy security at risk. Charlie Mitchell reports.

On a stormy Wednesday last month, the waters of Taupō-nui-a-Tia roiled under a dark sky.

Waves crashed on to the soft shoreline, sending land tumbling into the lake. Dark water washed towards the houses lined up close to the water.

Two weeks later, another storm – the fringes of Cyclone Gabrielle – did the same. Pumice stones and sand were thrown inland; teetering trees keeled over into the water.

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One of many trees that has toppled into the lake due to erosion.

* Worries as Lake Taupo nears maximum capacity

For many years, Lake Taupō has been inching closer to the small community of Kuratau.

What started as a gradual, insidious process – around half a metre of land falling into the lake yearly – has escalated. In the last two years, those nibbles have become bites, and the community has lost large chunks of the foreshore.

It has changed not only the community's shape but also its spirit.

The Detail looks at our electricity market; why some say the current structure needs to go; and why there are big profits to be made in power (first published in October, 2021).

Angela Salmon and her family have had a house in Kuratau for 50 years. She said it was once “idyllic' – where neighbours would have barbecues on the reserve at Christmas and kids would kayak beneath the steep cliffs at the river mouth. Now, people are gloomy about its future.

That change has not happened over the whole 50 years; Much of it has happened in a year or two. After back-to-back storms, the foreshore resembles a war zone; toppled trees cover what used to be beaches, and dirty rocks and stones litter the grass.

While surveying the foreshore, Salmon comes across a large beech tree that has tumbled into the water. Its branches, she says, used to glow with light from sinking sunsets; Now it lies gnarled and broken under a grey sky.

“It sort of epitomises the problem,” she says.

An electric lake

Like most lakes, the water level in Lake Taupō is determined mainly by the weather.

When it rains, it fills up; when it’s dry, it drops.

Lake Taupō is natural – it was formed thousands of years ago in the caldera of a supervolcanic eruption that shrouded much of the country in ash – but it is managed more like an artificial lake. Much like a battery, it stores potential electricity, which is released to meet demand.

It means Taupō is responsive to the weather and another powerful force: The electricity market.

Mercury, the majority state-owned electricity company, has controlled Lake Taupō's water level for many decades. Since 2003, it has done so within a 1.4m range, granted under resource consent from Waikato Regional Council (WRC).

It does this for two reasons.

Pumice thrown ashore during a storm on February 1, which came near a sewage main.

One is to generate hydroelectricity through a chain of dams and power plants along Waikato River, a scheme that produces about 10% of New Zealand’s electricity. As one of the few such schemes in the North Island, it is important for the security of the electricity system.

The economic logic of the scheme is simple. When it gets cold, electricity demand increases (people come home from work and turn on their heat pumps). To meet that demand, water is released from the lake to generate electricity, collecting higher prices.

When demand is low (say, in summer), water is held in the lake for later.

The same area weeks later, after a rock wall was installed to protect the pipes.

The second reason to manage the lake level is to control Waikato River's flow. Several communities along the river are vulnerable to flooding, which can be mitigated by holding back water in the lake. Conversely, during dry periods, water can be released to increase the river’s flow for use in irrigation.

This makes the scheme not just central to the Waikato economy, but an essential part of the national electricity grid.

“We manage Lake Taupō’s storage to ensure that we can supply renewable electricity for Kiwis,” says Phil Gibson, Mercury’s general manager of portfolio.

“The other role the hydro system plays is to protect communities from the extreme effects of droughts and flooding.

“It’s a whole-of-catchment thing, and it is turning up – for residents in parts of Lake Taupō – with erosion effects.”

While the country has electricity, farmers have water and Waikato River communities are protected from floods, the scheme has an unfortunate downside.

On the western shore of Lake Taupō, residents of a small Pā risk losing some of their infrastructure. On the other side of the lake, at Waitahanui, the lake has claimed prime fishing spots. While much of the lake is unaffected, small pockets are battling an impossible problem.

Rivers bursting their banks, flash floods and more intense cyclones – how climate change is making floods more extreme.

Kuratau is where this battle has tallied the most losses.

The playground has been moved at least twice, as has a rock memorial to a deceased resident. Many trees – some of them decades old – are gone. The shoreline now sits close to a sewage main, and next in line are the tennis courts, then the houses beyond.

Attempts to fight back appear to be failing.

When the council dumped piles of sand meant to renourish the beaches, they disappeared within days. A ‘living wall’ – installed to try to slow the erosion, using a method that has worked internationally – now lies in tatters in the water. A large, temporary rock bund was recently extended to protect the sewage line but has seemingly pushed the erosion further along.

Some locals feel like the community is being sacrificed for the greater good.

“This is Lake Taupō,” says Sandra Greenslade, a Taupō District councillor representing the area that includes Kuratau.

“This is for all New Zealanders. It's part of who and what we are, and to think that it's sort of not being treated as well as it could be … I think that we can do better and have to do better.

The erosion is steadily eating away the foreshore.

“We can’t just allow ourselves to say that power generation is more important than anything else, and never mind that the lakefront is washing away.”

Lowering the stakes

These concerns raise an obvious question. What happens if the lake level is reduced?

The lake level is not the only cause of erosion, but it is a major one. A previous study identified dams in nearby rivers as contributors; they trap sediment that would otherwise replenish the shoreline.

Manmade structures such as ramps and groynes can push erosion to other parts of the lake. Vegetation removal in some areas hasn’t helped; nor has the ongoing tectonic activity.

The Kuratau foreshore photographed in September 2020.

Lowering the lake levels would require changing Mercury’s resource consent. The already small operating range would narrow further, reducing the lake’s ability to store potential electricity.

Doing so, the company says, would be unwise.

“If you had a regime where you were limiting the summer [lake] level, you’d be putting New Zealand’s energy security at risk,” says Phil Gibson, from Mercury.

It speaks to a tricky dynamic.

As the need for renewable electricity rises, so do the environmental and social consequences that come with generating that electricity. In this case, those consequences have happened alongside extreme weather, likely to be an enduring problem as the climate warms – a problem the scheme itself is trying to mitigate.

For its part, Mercury says this year has been extraordinary.

The same area now, during a storm last month. The position of the leaning tree shows how far the shoreline has eroded.

“We’ve had really high volumes of water flowing through all the time,” Gibson says.

“We haven’t had a break to see lake levels come down – we’ve been getting persistent rain all year until about a month ago.”

It was so bad that, for the first time in over a decade, the lake breached its upper limit – coinciding with the February storm that caused the erosion. The company had the floodgates wide open, but so much water was coming in there was nothing it could do.

Mercury acknowledges erosion can be “traumatic and concerning” for the residents, Gibson says. But the company is acting within the boundaries of its consent, and it has to think of the broader picture.

“While we acknowledge what’s going on for the Kuratau residents, we’re looking at that whole Waikato catchment,” he says.

The foreshore of Kuratau photographed in September 2020.

The problem is not unique to Lake Taupō.

Most hydro lakes in New Zealand are eroding. The rise and fall of water, synchronised with the national electricity demand, has also bespoiled Pukaki, Tekapo and Hawea.

But Taupō has a vital difference – while the scruffiness of the southern lakes may risk disappointing tourists, thousands of people live near Taupō’s shoreline and are experiencing its impact in their day-to-day lives.

“Lake Taupō is very unusual,” says Dr Earl Bardsley, a hydrologist and research associate at the University of Waikato.

“It’s not the same as the southern hydro lakes because it’s highly populated, and so there can be quite big shoreline impacts.”

The same area during last month's storm, showing the extent of land lost.

Bardsley has thought about what an optimal hydro scheme for Lake Taupō would look like.

In his view, Mercury is just doing what it should – it's a company operating in a marketplace, generating income.

What would be preferable in the longer term, he says, is a different market for Taupō. Instead of constantly generating electricity, it could be used as a reserve to tap during outages from the south.

“That means more or less keeping [the lake] at the middle level,” he says.

“You keep away from the high levels to avoid erosion, and you keep away from the low levels because that makes the North Island vulnerable to outages”.

This, he says, would have a range of benefits.

It would help ease erosion and prevent the negative impacts of low lake levels (such as access for boats). Rather than swinging between highs and lows, the lake would stay at a predictable level. It would, in a way, become even more artificial, but in a way that benefited the lake’s users.

Some lakeside residents have embraced his view – he was recently invited to give a talk and received a warm response – but it would have to clear a high bar.

When resource consent was given in 2003, it came with a condition. The consent could be reviewed every five years in case any unexpected consequences arose.

Erosion was considered a likely consequence, but whether this much erosion was expected is unclear.

A review would have to be initiated by WRC, which has previously declined to do so. However, this year marks another opportunity – it's been five years, meaning a review can happen.

For some residents, this is the time to push for change.

“At the moment, what the people in the district would like is for this to be a notifiable consent, so that they can go and speak to Waikato Regional Council and talk about the effects of high lake levels on the edges of the lake,' says Greenslade, the councillor. “I think that's the one thing that local people would like to see.'

WRC says it is currently considering its options.

“The review is not mandatory, but given the level of interest from the public, we are undertaking a non-statutory process to determine whether or not a review will be initiated,” says Amy Robinson, WRC’s general consents manager.

”As it is a non-statutory process, there is no opportunity for parties to be formally involved in it. We are, however, aware of various concerns regarding erosion around the lake and this is a matter that we are considering.”

It’s not just residents hoping for that outcome. The district council has long supported reviewing the consent, so there can be a public discussion.

“Members of the communities around the lake have a diverse range of views about lake levels, and TDC supports giving voice to the interests of all our communities,” says district parks manager Greg Hadley.

“A review mechanism is built into [Mercury’s] resource consent, and we support the use of this forum for the voicing of concerns from the community. In the past, TDC has supported a review being conducted and continues to do so.”

Consequences

For the first time in many months, calm has fallen on Kuratau.

The lake is slowly dropping, even though it remains higher than usual for this time of year. There are no major storms on the horizon.

The temporary rock wall protects the sewage line, which – if it was damaged – could have caused a different disaster. The playground, for now, is safe.

How long this will last is unclear. Another wet winter, followed by another volatile summer, would be disastrous. There is not much land left to lose.

Some parts of the country are talking about managed retreat as a response to coastal erosion, but no such discussions have been broached at Kuratau. For now, other options remain.

“Man has no control over the sea, but man has control over the lake,” Angela Salmon says.

“If the lake wasn’t kept so high, and we hadn’t got to the point where the erosion has done so much damage, it would not be an issue.’’

For the first time ever, all the parties involved in lake management – including a group of residents – are holding discussions about the way forward.

Any decision will have negative consequences. Lowering the lake’s operating range would curtail an important source of renewable electricity, one likely to become more important as the country pursues decarbonisation.

“If you were to limit the range of Lake Taupō, you'd bring a whole bunch of other risks to power security for the country – for supply of water for industry, agriculture, municipal water …” says Phil Gibson, from Mercury.

“It’s not just a Lake Taupō issue. We have to manage a 500-kilometre-long catchment.”

For the people in Kuratau, the status quo will compound a problem they have little power to fight – and they are running out of time for other solutions.

“It seems to me that people in the district have flagged this for many years, and they have been ignored. Now it has become impossible to ignore because it’s so blatant and terrible for so many people,” says Greenslade.

“Now it’s in our face, and it’s the old story – waiting until it was so late before we actually managed to get people to the table.”

Somewhere, in the confluence of these interests, lies an answer. But where?