• Transpower proposes a $1.4 billion spend to replace ageing Cook Strait electricity cables.
• The plan includes installing another fourth cable to enhance capacity and resilience.
• Feedback on the proposal is due by June 20, before it is submitted to the Commerce Commission.

Transpower is proposing a $1.4 billion spend on replacing the ageing electricity cables linking the North and South Islands across the Cook Strait.

The state-owned power transmission company released a consultation paper today setting out its proposals to replace key components of the High Voltage Direct Current (HVDC) link. The plan includes replacing three power cables.

Transpower also had a “strong case” for installing another, fourth cable while doing the work, chief executive James Kilty said.

The first HVDC cables went live in 1965 and were replaced in 1991. They will reach the end of their expected life in the early 2030s.

Underwater surveys have shown Transpower the cables have begun to deteriorate as expected, Kilty said.

Cable termination stations, the join between the undersea cables and overland parts of the link, will also need upgrading in the early-to-mid-2030s. Transpower wanted to deliver this work at the same time as the replacement cables, he said.

Transpower is seeking feedback on the HVDC investment proposal, due by Friday, June 20. After considering feedback, Transpower will submit a Major Capex Proposal, with any necessary adjustments made, to the Commerce Commission.

Transpower’s proposal will “seek approval to recover costs of the work programme through Transpower transmission charges, spread over the expected life of the assets”, the company said. Transmission charges currently make up 8% of consumers’ power bills.

Transpower will also contract an independent review of the proposal.

Transpower boss James Kilty said having a link between the North and South Islands "is critical for delivering the lowest cost source of electricity to New Zealanders now and into the future". Photo / Transpower

Kilty said having a link between the North and South Islands “is critical for delivering the lowest-cost source of electricity to New Zealanders now and into the future”.

“The HVDC link also adds resilience to our electricity system as the connection between the North and South Islands means the market can take greater advantage of the electricity generation available across both islands.”

Kilty said adding another cable during the upgrade work would mean Transpower could “transfer more electricity as well as providing more back-up in the case of an unplanned outage”.

“We believe this is a prudent and cost-effective investment to future-proof New Zealand’s electricity supply. We only get one shot at this every 40 years and we’re keen to hear from stakeholders before we proceed.

“It will set New Zealand up for an affordable and resilient electricity supply for the long term.”

Planning the upgrade, the new cable and upgrades to the termination stations together would minimise the impact on the electricity system and deliver cost efficiencies, Kilty said.

“The equipment we need, as well as the expertise to install it, is in high demand globally. A large part of this is driven by the world electrifying at pace and building more renewable electricity generation to meet that electrification demand.

“We’ve already moved early to secure New Zealand’s place in the queue for undersea cables, a cable-laying ship and the experts to install them. It’s critical we firm up our plans for the proposed investments so we can move ahead and lock in the necessary contracts.”

Construction would begin in 2030, with new equipment proposed to be running in 2031, he said.

Included in the proposal is an upgrade of the control system behind the HVDC, new equipment at the Benmore substation for maximising electricity transfer volume, upgrading two of the smaller convertor systems and securing a facility to store the spare cable.

Raphael Franks is an Auckland-based reporter who covers breaking news and business stories. He joined the Herald as a Te Rito cadet in 2022.