Transpower Gets Go-Ahead For South Island Upgrade
By Pattrick Smellie, on Tuesday 27 April 2010
Stuff.co.nz
Big new wind and hydro-electricity project proposals in the lower South Island got a shot in the arm today, with Transpower gaining approval from the Electricity Commission to proceed with a $170 million upgrade to the national grid between the Waitaki and Clutha river systems.
Transpower, the state-owned national grid operator, applied last November to undertake the upgrade, which the commission decided was necessary if some of the renewable projects planned in the deep south were to be built.
The project will see five sections of the grid between Roxburgh and Twizel (upgraded) and will allow Transpower to recover up to a total of $197 million from electricity generators and consumers, in 2015 dollars, for the project.
"There is the potential for very large wind farms to be constructed in the lower South Island region, which may be more economic than constructing generation elsewhere in New Zealand due to economies of scale," the commission decision said.
"The Clutha hydro schemes proposed by Contact Energy Limited, and North Bank Tunnel hydro scheme proposed by Meridian Energy, may be the most cost-effective generation options available for large hydro projects.
The commission's analysis showed that enabling such options "provided substantial benefit", even with higher costs.
"A key reason for the benefit is that new lower South Island hydro, backed by storage, would provide firm capacity which would contribute to meeting peak demand. Both hydro and wind can also provide bulk low-cost energy."
The commission also disagreed with Transpower's assumption that generators would build substantial new renewable plant in the lower South Island if the grid upgrade did not go ahead.
"Developers are understandably reluctant to construct new generation behind an export constraint," it concluded.
The commission asked Transpower to check whether the Rio Tinto-owned aluminium smelter at Bluff would consider voluntary load reductions when generation capacity was required elsewhere in the country.
It was not, and this provided further rationale for approving the upgrade.
The project is one of many now occurring to restore the capacity in the national grid after a long period of under-investment.
Most critical is restoration of full capacity on the Cook Strait cable.
Energy Minister Gerry Brownlee turned first earth on that upgrade, the so-called Pole 3 project, last week.
Tuesday, April 27, 2010
Transpower Gets Go-Ahead For Upgrade
Wednesday, September 23, 2009
Rio Tinto Recommends Asset Swaps
Rio Tinto Recommends Asset Swaps Among New Zealand Generators
By Gavin Evans, Tuesday 22 Sept 2009
bloomberg.com
Rio Tinto Alcan, New Zealand’s biggest power user, has recommended that the government consider swapping assets among state-owned generators to increase competition and provide more secure year-round supplies.
Swapping some of Meridian Energy Ltd.’s dams on the Waitaki River with Genesis Power Ltd.’s gas-fired plants would improve each company’s geographic spread and provide better incentives to manage the risk of low rainfall, Rio’s New Zealand unit said in a submission. Meridian’s contract to supply Rio’s Tiwai Point aluminum smelter would not have to be transferred, it said.
New Zealand’s government is considering measures to stem a 79 percent increase in household power costs since 2000. Wholesale prices reached a record in June last year, the third time in eight years that consumers were asked to reduce consumption because of low water levels in lakes that usually generate about 60 percent of the nation’s electricity.
Rio Tinto “is open to discussions with the government on a further asset split in the South Island,” New Zealand Director Paul Hemburrow said in the company’s submission.
The 350,000 metric ton-a-year Tiwai Point smelter is 79 percent-owned by Rio Tinto and uses almost 15 percent of the country’s electricity. It is supplied by Meridian Energy, with most of its power coming from the company’s 850 megawatt power station at Manapouri.
Energy Minister Gerry Brownlee last month dismissed two asset-swap proposals among state-owned generators recommended by a review panel and said the government would need to be convinced of the merits of a third.
Security of Supply
None of the three options considered by the government would increase competition on the South Island and may actually reduce security of supply, Rio said.
It advocated transferring Meridian’s Benmore, Aviemore and Waitaki power stations in exchange for two gas-fired generators Genesis runs at its Huntly site on the North Island.
Leaving Meridian with the Manapouri, Tekapo and Ohau power stations would give it sufficient capacity to retail energy on the South Island and still meet its obligations to the smelter contract, Rio said. Each of the companies would also have an incentive to contract or build new plants to meet peak demand.
The government’s diesel-fired emergency generator at Whirinaki should also be sold or transferred to one of the state-owned power companies, it said.
Wednesday, July 29, 2009
Contact To Get Lines Upgrade
Transpower planning to upgrade lines
By Lynda Van Kempen, Wednesday 29 July 2009
Transpower plans a $155 million upgrade of key transmission lines between the Clutha River and the Waitaki River to cater for approved and potential wind generation projects.
Transpower, which owns and operates the national grid network of high voltage electricity lines, wants to increase the capacity of lines between Roxburgh and Twizel, Roxburgh and Islington, Aviemore and Livingstone, and Benmore to Aviemore.
An information pack was sent to 250 landowners with existing lines on their properties this week.
Transpower's project communications manager Geoff Wishart said the lines transferred electricity north from Otago and Southland and also helped maintain security of supply to the area south of Roxburgh.
One of the main aims of the project was to help "unlock the potential" of renewable generation in Otago and Southland.
Several large wind farms were proposed in the lower South Island and eleven power generation projects, together comprising 1922MW of new generation capacity, were either consented or under investigation.
These included the Mahinerangi wind farm (consented), Project Hayes wind farm (Environment Court appeal result pending), Kaiwera Downs wind farm (consented), and up to four hydro dams on the Clutha river proposed by Contact Energy.
An Environment Court decision is also pending on Meridian Energy's 280MW North Bank Tunnel project, which was also a factor.
Most of the companies behind the new power schemes have given evidence at consent hearings or appeals highlighting the need for an upgrade of key transmission lines to cater for the projects.
"With the wind farms and hydro schemes in the pipeline, we need to reinforce the network to be able to shift more power," Mr Wishart said.
Some of the work might be delayed if any of the projects did not go ahead, but an upgrade was still needed, he said.
Transpower was seeking response from the communities within the Roxburgh and Waitaki Valley area. Submissions close on August 14.
It plans to submit a proposal to the Electricity Commission for approval by October.
The preferred option for the upgrade is to almost double capacity by adding wires to each conductor on three 220kV lines - between Roxburgh and Islington, Aviemore and Livingstone and Benmore and Aviemore.
Some towers or foundations might need to be strengthened to hold the additional wires.
On the 220kV Roxburgh to Twizel line, it was proposed to boost capacity by thermal uprating (increasing the maximum allowable operating temperature of the transmission line wires).
The earliest work was likely to begin was 2012 and it would take three years to complete, Mr Wishart said.
Thursday, July 17, 2008
New Projects Will Outpace Demand
Transpower chief: New projects will outpace electricity demand
NZPA | Thursday July 17 2008
Natinal Business Review
Dry winter power concerns may be less of a problem in future, with capacity from planned new power projects in the next decade likely to comfortably beat the expected growth in demand.
More than $7 billion is being spent on electricity generation and transmission in the next few years, investment in new electricity infrastructure of a scale not seen since the 1970s, said Transpower chief executive Patrick Strange.
Over the next seven to 10 years, Electricity Commission analysis showed the number of new generation projects was about four times the expected growth in demand.
Over the coming four years, more than 1300 megawatts (MW) of new generation projects are planned, totalling up to $4 billion of capital investment.
"Transpower is also advancing $3.5 billion of investment in electricity transmission projects, and we will be working hard to ensure that any new generation, much of which will be from renewable sources located some distance from major load centres, can reach consumers when it was needed," Dr Strange said.
New Zealand needed between 150MW and 200MW of new generation capacity a year to meet demand growth.
"With over 1300MW of new generation capacity over the next four years, the industry will be adding significantly to the country's energy security margins."
Dr Strange said he was cautiously confident the industry would meet the winter North Island demand peaks next year.
This year, adding to low hydro storage lake levels, there was the unexpected shutdowns of the 300MW New Plymouth generation plant, and the Cook Strait cable being down to one operational pole.
"The level of investment in new generation and transmission reflects that the electricity industry players are responding to the critical need for secure electricity supplies going forward," he said.
