National grid upgrade urgent

By CHRIS DANIELS energy writer

Six months into his new job as chief executive of state-owned Transpower, Ralph Craven is anxious to get moving on an urgent upgrade of the ageing national power grid.

"Most of the high-voltage stuff was built in the 50s and 60s. In Auckland particularly, the last 110kV line was built in 1983. The others were built in the 40s and 50s, there's an ageing infrastructure and so we have to maintain that.

"As it gets older it takes more to maintain it," he said.

One line of the HVDC (high voltage direct current) link, installed in the 1960s, was now the only one of its type in the world.

It was hard to get the skilled people needed to maintain this ageing system and the only factory in the world that made parts for it has closed.

"Our biggest concern is that we'd get an outage in a major component, you'd have to make it from scratch - you can't buy it off the shelf. It could take six months [while] you're relying on the other pole. We can't let that go on forever."

Craven is no Cassandra, crying that the national power grid is crumbling around our ears, but he implies that things need to start happening quickly.

"I don't want to give the impression that things are going to fall over the edge right now, but we actually need to do this work in a timely manner - starting next year."

As owner and operator of the national electricity grid, Transpower was a key opponent of the industry self-governance framework that was voted down earlier this year, prompting Energy Minister Pete Hodgson to step in, establishing the new Electricity Commission.

The self-governance ideal, one based on multilateral contracts between all the industry players, would not have helped promote much-needed investment in the grid, says Craven.

Transpower was now preparing its preferred list of upgrades to the grid and starting the time-consuming process of consultation and approvals.

The new commission, which will be charged with looking at the "national interest" among its other responsibilities, can allow Transpower to be paid what it hopes will be an adequate rate of return.

As all the new RMA applications and local consultations begin, Transpower will be seeking property easements for the first time as it has no rights to land over which its lines are built.

"It's a constant worry for us. It imposes significant restrictions on our ability to actually maintain our assets," he said.

The new easements should mean little practical change to the way things operated now, says Craven, but would make it easier to get access to lines and pylons when needed.

This week Transpower announced an after-tax profit of $23.25 million for the year to June 30, down from $144.5 million the previous year. It will pay its Government shareholder a dividend of $38.5 million, down from last year's $80.2 million payout.