Grid Operator Engaged In Huge Upgrade Programme
July 22nd, 2009
National grid operator Transpower, moving into the building phase of a 10-year upgrading programme, has $2bn worth of projects now in various stages of development or construction as part of $3.8bn of capital expenditure planned for the next 5 years. Two projects, each costing over $600m, are of critical importance, the upgrading of the North Island grid by building a new line through Waikato to Auckland, and replacing Pole 1 of the high voltage direct current link across Cook Strait.
Other major works include upgrading the Otahuhu substation south of Auckland to receive the new line, improving the transmission grid to accommodate new geothermal generation being developed around Taupo and Wairakei, and reinforcing existing lines through Auckland to Northland. To bolster security of supply, $26m of transformers and other critical spares have been ordered for strategic placement around the country.
Transpower has told a Parliamentary Committee most of the investment will increase the capacity of existing lines by improving related technology or by hanging extra wires on existing poles rather than the more costly option of building new lines from scratch. The SOE says it supports measures to manage both peak and overall electricity demand. It suggests differential pricing to encourage people to programme appliances for off-peak use could help. It also believes ripple control technology as applied to water heating could be extended to refrigerators to assist in coping with peaks.
The growing use of heat pumps as air conditioners has reduced the gap between summer and winter peak loads, making it more difficult to take lines out of service during summer for maintenance. Transpower expects electricity demand, which typically tracks GDP growth, will decline in the next year. In the longer term demand is expected to continue to rise. The critical issue for a transmission company is to build enough capacity to meet demand peaks. The cost of under-investment, or investing too late, outweighs the cost of building extra capacity too soon.
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