Cook Strait cable upgrade approved

The Electricity Commission has given final approval for Transpower to spend up to $672 million to upgrade pole one of the electricity link between the South and North Islands.

The commission had announced its intention to approve the upgrade of the HDVC (high voltage direct current) cable in late July. It then held a public conference to provide a final opportunity for comment on the proposed upgrade.

It said after considering submissions, it had confirmed its decision.

The link is considered important for balancing the energy needs of both islands.

Pole 1 was 43 years-old and in poor condition. It was stood down a year ago.

Pole 2, fully commissioned in 1992, continued to operate reliably and had been able to carry additional load since Pole 1 was stood down.

The HVDC proposal is a two-stage project that will involve the construction of new converter station facilities at Haywards Hill in the Hutt Valley and Benmore in the Mackenzie Country and the decommissioning of the old equipment.

The two HVDC poles will have a capacity of 1200MW when stage two is completed in 2014.

The project does not include the replacement of the existing transmission line and submarine cables.

Transpower had initially asked for $728m but that was reduced to $672m following further analysis and discussion with the commission.

While the transmission pricing methodology, which allocates the costs of the HVDC equipment, was not under consideration, a number of electricity companies raised it in submissions.

Commission chairman David Caygill said that in due course, the commission would consider whether it was appropriate to re-examine the current transmission pricing methodology.