Transpower has released a discussion document on the future of the 60-year-old Cook Strait HVDC link.
National power grid operator Transpower has put the long-term future of its ageing Cook Strait power link up for discussion.
State-owned Transpower, with an eye on the likelihood that electricity is going to play a bigger role in New Zealand’s energy future, has released a paper on the HVDC (high-voltage direct current) link, raising the possibility that a fourth cable may be required.
The HVDC link which allows power to be transmitted between the North and South Islands is almost 60 years old.
Transpower says the expected cost of replacing the three existing undersea cables, and removing the old ones, would be $400-$500 million.
Much of this cost is in the specialist ship that will need to be brought to New Zealand to do the work.
If a fourth cable was added to improve capacity and resilience while the ship is in New Zealand, Transpower anticipates an incremental cost of another $40-$50m.
Transpower executive general manager grid development John Clarke said the cables that transport electricity across Cook Strait as part of the HVDC system will reach the end of their lives in the early 2030s.
“The need to replace the existing cables raises an opportunity to discuss with industry and other stakeholders the future role of the link in New Zealand’s power system and ensure it is fit for purpose,” Clarke said.
“We are planning infrastructure now for a future where electricity powers more of our transport and more of our industry in New Zealand.
“By 2050, we expect electricity use to have increased almost 70 per cent compared to 2020, and we need to consider what role the HVDC link will play in that future,” Clarke said.
Transpower expects electricity use to increase by at least two-thirds from now until 2050.
Clarke told the Herald Transpower is already spending around $393m to get more power up from the South Island to the centre of the North Island.
The work includes an upgrade of equipment at Haywards, near Wellington, which will help Transpower run the HVDC link closer to its 1200 gigawatts capacity.
Clarke said that, depending on how the electricity system evolves, it was possible that New Zealand could become less reliant on the link.
“Some of the feedback we get in the discussion might help to inform when we go out at the end of this year to more formally consult and get feedback on our case for replacing the cables across Cook Strait,” Clarke said.
Transpower’s discussion document comes at a time when billions of dollars are being spent on renewable electricity generation projects - mostly from wind but also from solar.
“If we ended up developing a lot of renewable energy generation in the North Island to feed North Island supply, it (the link) might still be required but we would become less reliant,” he said.
So is it conceivable that New Zealand will become less reliant on the link?
“We don’t know, which is why we want to ask that question.
“If there was a lot of hydro and wind development in the South Island for supply to the North Island, then we would rely more on the link than we do today,” he said.
“On the other hand, if the way our ability to generate electricity evolves to the point where the North Island becomes self-sufficient, and the HVDC link was just a way of accessing cheaper power in the South Island, then it would put a different light on how much duplication and resilence we would have to build in.
“It’s really important to have this long-term conversation so that even with some of the work we are thinking of doing like cable replacement that we are making the right considerations.”
As it stands, the link benefits North Island consumers by enabling access to lower-cost South Island hydro generation and South Island consumers by enabling access to North Island thermal generation required in the dry years, when the South Island hydroelectric storage lakes are low.
North-to-south power transfer happens regularly across a typical week, due to the natural variations in output from the increasing amount of North Island wind generation being “firmed” or balanced by changes to the amount of South Island hydro generation sent north, Transpower said.
There have been two major upgrades to the HVDC link over its almost 60-year life. The original cables were replaced in 1991, with some cable failures prior to replacement.
The current three cables have had only one failure, in 2004, but are nevertheless aging.
The lifetime of the original cables was about 25 years, and the existing cables, installed in 1991, were anticipated to have a useful life of 40 years.
“Our ongoing health assessment of the existing cables suggests that is correct and there will be an increased probability of needing replacement in the early 2030s,” Transpower said.
“Although our link was originally built to access lower-cost South Island hydroelectricity, its role is changing, and it will likely play a crucial part in delivering on our electrification ambitions,” Transpower said.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.