(Bloomberg) -- New Zealand power companies need to be investing in renewable generation plants now and can’t afford to wait for decisions on the government’s pumped-hydro project, according to Mercury NZ.

The government proposal, which would create Lake Onslow on the nation’s South Island to act as storage for hydro generation in dry years, would take too long to build, Mercury Chief Executive Officer Vince Hawksworth told a parliamentary committee Thursday in Wellington. The government estimates the project could take five years to build and two further years to fill the lake.

“Its time to build, conservatively, if it started tomorrow, would be the end of decade and possibly longer,” Hawksworth said. “But in the mean time we have to get on and do stuff because this next decade is the critical decade, and Onslow probably can’t deliver in this decade.”

The government wants New Zealand to get to 100% renewable power generation by 2030 and proposed the Onslow project as a way of securing supply if dry weather curbed output from the nation’s dams. Power companies have been critical of the proposal, saying it makes it difficult for them to fully commit with certainty to alternative wind, geothermal and solar projects.

“If a decision to go ahead occurred, I suspect that most investors in new renewables would have to re-visit their plans because it would create a different environment to build into,” Hawksworth said. 

Mercury is 51% owned by the government.

In isolation, Onslow is a feasible project but independent reports have highlighted that smaller generation plants located nearer to the nation’s largest cities on the North Island would make more sense, Hawksworth said.

“It happens to sit at the bottom of the wrong island from where most of the load growth is,” he said. “We would struggle to get the electrons north until the grid has been built out.”

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