Shifting surplus power north will be costly: Transpower

WELLINGTON: Transpower says it could cost up to $600 million to build its network to shift excess power at the bottom of the South Island further north.

The grid operator said it would ‘‘continue to work with its customers and the industry on projects that can expedite the delivery of surplus renewable electricity northward’’ after the decision by Rio Tinto to close its Tiwai Point aluminium smelter next year.

To efficiently move power to the North Island, where there is most demand, a fourth HVDC link would be required.

Transpower would need to upgrade its central North Island network and would now consult major users to assess what future demand could be.

The smelter uses about 13% of New Zealand’s power supply and could lead to lower energy costs, but a $500 million$600 million upgrade of the national grid would result in transmission charges increasing nationwide.

Contact Energy has also warned it may close a gas fuel power station in Taranaki. The Taranaki Combined Cycle Power Station produces 377MW of electricity.

Contact may also pause work on a smaller geothermal project which is ‘‘shovel ready’’.

Transpower already has committed to complete an upgrade of its grid in the South, the Clutha UpperWaitaki Lines Project, at a cost of about $100 million.

The stateowned enterprise has previously said this would improve electricity supply to Southland during dry periods, and allow any additional generation to be exported from Southland.