en.Wedoany.com Reported - New Zealand electricity transmission operator Transpower has received final regulatory approval to proceed with a NZ$1.1 billion (US$631 million) upgrade of the High Voltage Direct Current (HVDC) inter-island power link. The first phase of the project, signed off by the New Zealand Commerce Commission, involves replacing three existing Cook Strait cables and adding a fourth, along with constructing new terminal stations, thereby increasing the line capacity from 1.2 gigawatts (GW) to 1.4 GW.
The Cook Strait cables, known as the HVDC inter-island link, play a critical role in connecting the power grids of New Zealand's North and South Islands. The upgrade aims to address aging infrastructure that is expected to reach the end of its operational life by 2030. Nathan Strong, Deputy Chair of the New Zealand Commerce Commission, stated that the project is designed to reduce the risk of faults and outages, which could lead to higher electricity costs. Strong noted that infrastructure costs will be included in Transpower's regulatory asset base and recovered over the equipment's lifespan, with costs shared by electricity consumers and generators benefiting from the link under a revenue-based pricing method.
Strong mentioned that feedback received during stakeholder consultations broadly supported the Commission's draft position. He emphasized that installing the fourth cable during the initial upgrade would maximize benefits and avoid higher costs later, with analysis showing that delaying installation would reduce overall market benefits. The upgrade is also expected to enhance system resilience and security, including seismic upgrades to reduce the likelihood and impact of outages.
Transpower Chief Executive James Kilty welcomed the Commission's final decision. Kilty noted that the link is of national importance, citing reasons including: enabling New Zealanders to access the lowest-cost electricity in the country daily; playing a key role in maintaining power system stability, including helping manage more variable power flows from wind and solar; and enhancing energy resilience by connecting businesses and communities to diverse generation sources. Kilty added that timely approval would allow the company to secure manufacturing contracts for new cables before global supply tightens.
Construction is expected to be completed in the early 2030s. The project is the first phase of Transpower's broader HVDC link upgrade plan. Transpower stated that it will seek approval later this year for a new IT system to control the link's operation, while also considering future plans for the existing cables after replacement, with further assessments to be conducted before their decommissioning.
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